NEW YORK, March 30 (Reuters) - How now, Dow?
The Dow Jones industrial average, which closed above 10,000 for the first time on Monday, could open off its record peak on some worrisome earnings news and caution as Federal Reserve policy-makers meet to discuss interest rates.
''We said ole yesterday, but with Dow at 10,000, what do you do for an encore?'' said Bryan Piskorowski, market analyst at Prudential Securities. ''We are going to start a back-and-fill motion.''
Analysts said Dow component Coca-Cola Co. (NYSE:KO - news) could take some of the fizz out of the market. The soft-drink giant said after the Monday close that it expects case volume to slip in the first quarter.
General Motors (NYSE:GM - news) could also drive the blue chips lower. The world's largest automaker has seen union negotiations slow.
''Coke and General Motors may put a little pressure on our 30-stock friend. If we had had the Coke news yesterday we might not have made it to 10,000,'' said Piskorowski.
Analysts said a breather would be natural with the world's most-widely watched market index at record levels. A move downward would not be cause for alarm, they said.
''A little pause but certainly nothing to worry about. The long-term investors who have stayed in this market have been correct,'' said Arthur Hogan, chief market analyst at Jefferies & Co.
Wall Street could begin some nail-biting as Fed policy-makers meet at 0900 EST/1400 GMT. Most observers believe the Fed will keep interest rates unchanged amid continued evidence that inflation is under control.
The results of the meeting are expected at around 1400 EST/1900 GMT.
Market players will also be waiting for the March consumer confidence report, due at 1000 EST/1500 GMT.
This week's economic calendar is heavy. The March unemployment report is due Friday. The National Association of Purchasing Management February report and March personal income and spending data are due Thursday.
The Dow industrials rose 184.54 points, or 1.88 percent, to a record close at 10,006.78 on Monday as Wall Street shrugged off the conflict in Yugoslavia and focused on corporate news.
The Dow has been explosive this decade, more than doubling since it breached 5,000 in late 1995, thanks to a robust U.S. economy and the lowest inflation in decades.
On three different days this month the Dow edged above 10,000 but failed to hold there.
Long-term, the heated bull market could get even warmer, according to the Wall Street Journal's ''Heard on the Street'' column. |
