Barron's: Bulls talk of Dow at 11,000
By Ted Griffith, CBS.MarketWatch.com
Last Update: 11:33 AM ET May 4, 2002
NEW YORK (CBS.MW) -- A surprisingly large number of money managers believe the Dow Jones Industrial Average is poised to make a strong recovery, surging above 11,000 in coming months, according to a report Saturday in Barron's.
Nearly 50 percent of money managers surveyed believe the Dow ($INDU: news, chart, profile) will soon be headed sharply higher, driven by a pickup in earnings in the third and fourth quarters, the financial weekly reported. The findings were based on a poll of 178 U.S. money managers conducted by Beta Research for Barron's.
Among the bulls' top stock picks were the beaten-down shares of media giant AOL Time Warner (AOL: news, chart, profile) and drugmaker Bristol-Myers Squibb (BMY: news, chart, profile), according to the report. Stocks of both companies have suffered this year because of concerns about faltering earnings.
Some managers also like Dow components General Electric (GE: news, chart, profile) and Pfizer (PFE: news, chart, profile).
The report quotes Sheldon Lien, portfolio manager for Anchorage-based McKinley Capital Management, as saying the stocks of General Electric and Pfizer are attractively valued after falling to multi-year lows.
Insurance giant American International Group (AIG: news, chart, profile) ranks as the top pick of money managers, according to the report. There has been renewed interest in insurance in the wake of the Sept. 11 terrorist attacks.
To be sure, there are still plenty of pessimists about the outlook for stocks. Barron's reports that money managers are still wary of the ravaged technology sector.
The report quotes Scott Schermerhorn, a senior portfolio manager for Columbia Management Group, as predicting the economic recovery "will be a lot more muted than investors anticipate."
Schermerhorn believes disappointment with a tepid recovery could drive the Nasdaq as low as 1,200, almost 30 percent below its current level.
In addition, a significant number of money managers consider General Electric's stock overvalued, according to the report. Other stocks seen as overvalued include Krispy Kreme Doughnuts (KKD: news, chart, profile), Applied Materials (AMAT: news, chart, profile) and Cisco Systems (CSCO: news, chart, profile). |
