Compaq Message Board - Msg: 8490443

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Technology Stocks : Compaq

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To: rupert1 who wrote (54669)	3/24/1999 8:05:00 AM
From: rupert1	of 97611

Mary Farrell believes that we may have started a 5-15% correction. Vince Farrel and Mike Holland disagreed. They thought a few more percentages points down but that the next 2,000 is up rather than down. Here is Mary's interview. M Aired March 23, 1999 - 6:34 p.m. ET LOU DOBBS, CNN ANCHOR: Joining me now to take a look at what did happen and tell us what is likely ahead for Wall Street is Mary Farrell of Painewebber. Mary this was a tough day. Is this the beginning of the correction? MARY FARRELL, INVESTMENT STRATEGIST, PAINEWEBBER: I think it well may be Lou. The problem out there as Rhonda pointed out is disappointing earnings; we're looking at the economy slowing; and the market frankly was valued for near perfect conditions. It can't absorb any disappoint without a correction to respond. DOBBS: What has been so significant? What has shifted that would cause a correction at this point? FARRELL: What we have started to see is -- just even beginning a few weeks ago is some of the technology companies reporting some slowing in orders; that they were going to be squeezed because of pricing issues on their margins. And we've had many of them, even following up with IBM just recently. But now it's spreading to some of the other industries as well. We had some analysts cutting estimates in some of the consumer product companies. So I think there is a feeling now that we have to be a little careful on the earning side and that makes people sell stocks. DOBBS: Careful on the earning side; the possibility of a correction, what's your forecast? FARRELL: I think that there's nothing wrong with the fundamentals of this market. Interest rates remain very conducive to an upward market. Inflation is under control; earnings look good. The problem was one of valuation. We had extraordinary gains off that October low; nearly 35 percent gain. I think the market got ahead of its self, so I think the best case here is we stay in a trading range for the rest of this year. Worst case: we see one of those painful five to 15 percent corrections. DOBBS: Your counsel to investors tonight? FARRELL: Don't panic. Remember we just went through this; a 19- 1/2 percent correction late last summer and early Fall. If you own good quality companies then you can have the confidence that even if they correct they will come back.

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