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To: Bill J. Duke who wrote (7857)	8/2/1999 1:32:00 PM
From: Spytrdr	Respond to of 13953

Goldman's Cohen Predicts 'More Moderate' Gains in Stocks, No Bear Market Top Financial News Mon, 02 Aug 1999, 1:27pm EDT By Nick Olivari Goldman's Cohen Sees Gradual Rise in Stocks (Update1) (Adds viewpoint of rival strategist in graph 6 and Cohen's targets from 7th graph.) New York, Aug. 2 (Bloomberg) -- Goldman, Sachs & Co. investment strategist Abby Joseph Cohen forecast ``more moderate' gains for stocks in coming months, and said she doesn't expect a bear market. Previous bear markets were generally preceded by overvaluation and ``catalyzed by deterioration in economic performance, such as a significant rise in inflation or weakness in corporate results,' Cohen wrote in a report to clients. ``We don't believe that either condition is in place.' Cohen, one of Wall Street's most optimistic and accurate strategists, said the Standard & Poor's 500 Index has reached ``fair value territory, suggesting that future price gains likely occur in a more moderate fashion.' Corporate profits will drive further gains, said Cohen. Companies in the S&P 500 should ``easily' meet her projection of 7-8 percent growth in operating earnings per share, she said. Cohen said she will review her full-year profit forecast when more complete data are available in coming weeks. ``Our valuation approaches suggest that the S&P 500 has ranged between 5 percent undervalued and 5 percent overvalued since March,' Cohen said in a report to clients. ``In previous cycles, overvaluation reached notably higher readings, typically 15 to 25 percent.' Cohen's optimism contrasts with that of Barton Biggs, chief global strategist for Morgan Stanley Dean Witter & Co. who said last week the stock market could have `` a correction at least and perhaps a cyclical bear market' over the next two months. Cohen's current year-end target for Standard & Poor's 500 is 1325. The index gained 13.26 to 1341.99 in midday trading. The index returned more than 20 percent annually for the past four years, and is up 9 percent in 1999.