Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: puborectalis who wrote (45088)	10/17/1999 4:13:00 PM
From: Ruffian	Respond to of 152472

Sunday October 17, 3:13 pm Eastern Time Bay Street Beat: Spooky now, but seductive soon By Sarah Edmonds TORONTO, Oct 17 (Reuters) - The correction in Canadian and U.S. stocks has many investors cowering, but a few reassuring voices are bidding them pay heed to the adage that it is darkest before the dawn. Canadian markets emerged bloodied but relatively unbowed from Friday's 266.90 drop in the Dow Jones Industrial Average following a jump in wholesale inflation. They may get theirs early this week, however, particularly if there is follow-through selling on Wall Street or if U.S. consumer price data beat expectations on Tuesday, said Doug Porter, economist at Nesbitt Burns Inc. in Toronto. But the dismal performance of stocks last week and their bleak near-term outlook may actually herald better times ahead, some strategists said. The markets in the United States and Canada are seen by some as close to finding bottom and this could usher in a long-term upward move. Courageous investors, therefore, are well-advised to start gathering their shattered wits and taking a logical look at the bargains about, they said. ''I think that we are approaching -- whether it's in the next few days or the next few weeks -- a major low in the market and a tremendous long-term entry point into equities,'' said Gerald Vincent, an economist with Davis-Rea Investment Counsel in Toronto. ''There could easily be follow-through (selling) but I think we're approaching the washout phase of the intermediate downtrend that started in the summer and I feel also we're very close to the cusp of a major long-term bull market.'' CIBC World Markets chief strategist Subodh Kumar is not quite as enthusiastic, but he, too, believes that those with a longer-term view should start snapping up stocks soon. ''Overall for the markets, I think below 6900 on the TSE (300) is an attractive level in the sense that my target for 12 months out is 8000,'' Kumar said. The Toronto Stock Exchange's benchmark 300 Composite Index sank 85.21 points, or 1.22 percent, to 6884.44. On the week, the TSE fell 3.25 percent or 232 points. Suffering its worst-ever weekly point drop of 630 points, Wall Street's Dow Jones index briefly fell through the key psychological barrier of 10,000 points on Friday, leaving many in a defeatist frame of mind. The U.S. index is now down nearly 12 percent -- a 10 percent decline is defined as a correction -- from its record 11,326.04-high of Aug. 25. Against a backdrop of rising bond yields, emerging inflation and a troubled U.S. dollar, volatility is unlikely to fade overnight. The Fed is seen as highly likely to boost interest rates at the next meeting of the policy-setting Federal Open Market Committee on Nov. 16. U.S. CPI data for September due out on Tuesday should have a major impact on the short-term mood of the market. ''It could actually do some repair work if it comes in close to expectations or even on the low side. If (like producer prices), it also comes in well above expectations, then I think the market is in for another round of trouble,'' said Porter. Kumar said that while a minefield of negatives remain in place, there is a solid underpinning to the market in the improving earnings picture. ''I don't think (a rate hike) would detract from the earnings recovery story -- it's more designed to cool down the U.S. consumer, which would be a good thing from the bond point of view and would be positive for stocks,'' he said. ''So I think the way investors should look at it is the markets both here and in the U.S. have moved to levels that look attractive on a 12-month basis,'' Kumar added. The markets are still in a perilous position in the near-term, however. Bellwether indexes have broken through some key support levels, a signal that technical analysts believe can often trigger more selling. ''One would expect some sort of follow-through but we are moving in the S&P (Standard & Poor's 500 index), for example, into an area of major support (around 1250 to 1245),'' Vincent said. On Friday, the Standard & Poor's 500 fell 36.01 points, or 2.81 percent, to 1,247.41. ''I think obviously we've broken through a few technical levels and there should be some follow-through in testing,'' Vincent added.