NEW YORK (Reuters) - Stocks look ready to rally when the market opens on Monday after the capture of former Iraqi President Saddam Hussein (news - web sites).
In fact, analysts believe Saddam's capture will give a general boost to equities around the globe, as well as to the U.S. dollar and U.S. Treasuries.
"Initially, there's little doubt that it's a boost for the market," said Milton Ezrati, senior economic strategist at fund manager Lord Abbett & Co. "A major uncertainty has been removed, and it also gives hope that this situation, on a fundamental basis, will improve.
"In the end, the market is going to look at the financial situation, and that will depend on the United States' ability to transfer power and withdraw and relieve the financial strain of this whole exercise."
John Davidson, president of PartnerRe Asset Management, believes Saddam's capture probably will give the blue-chip Dow Jones industrial average(^DJI - news) a reason to rally above last week's climb over the psychologically sensitive 10,000 mark.
But he questioned how long this lift may last.
"We might see a pop," Davidson told Reuters. "Stocks are pretty fully valued, so whether this results in a sustainable rally from here is in question.
"It might put a temporary pause on the rise of the euro," he said, noting that capture of the former Iraqi leader should lower the risk of attacks against the United States, which had been weighing heavily on the dollar. |
