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To: Wally Mastroly who wrote (9391)	10/18/1999 8:49:00 PM
From: E_K_S	Respond to of 15132

More opinions on Mr. Market-Monday October 18, 8:28 pm EST Two of Wall St's biggest bulls go separateways NEW YORK, Oct 18 (Reuters) - Two of the stock market's most bullish analysts took different directions on their stock forecasts on Monday in the wake of recent worries about the U.S. economy and higher interest rates. Abby Joseph Cohen, U.S. market strategist for Goldman said the recent skittishness in stocks was unfounded as she tried to soothe rattled stock market nerves after one of the market's worst weeks in recent memory. Her counterpart at Lehman Brothers, Jeffrey Applegate, meanwhile cut year-end stock forecasts, although he remains bullish over the long term. Applegate also came out swinging for Internet stocks. Overall, though, the two are still in the bull camp and are more alike than different. Concerns about a weak dollar, higher oil and gold prices and rising bond yields dogged blue chips in the late summer and early fall. The Dow industrials are off 10.7 percent from their August record and the Standard & Poor's 500 Index is down 11.6 percent from its July record close. Cohen told clients that concerns about economic deterioration are unwarranted and at current rates, the S&P 500 index is modestly undervalued. She blamed the surprise increase in wholesale prices, which helped rap financial markets on Friday, on''special and transitory factors'' and not a noteworthy upward shift in generalized inflation. On rates, she said bonds and stocks have priced in a 25 basis-point increase, which should limit the downside in the event of an actual tightening. Cohen identified and tried to defuse three concerns hurting stocks: earnings, money flows and Year 2000 jitters. She said U.S. companies are posting solid profit gains and repeated her upwardly revised view that S&P500 operating earnings will be $51 in 1999 and $55 in 2000. Cohen also said weak mutual fund inflows can be attributed to seasonal weakness. The bulk of inflows tend to come in the beginning of the year when people get large payments such as bonuses. Also, funds often sell weak stocks at this time for tax purposes as they get ready for the fiscal year-end on October 31. Over at Lehman, Applegate cut his stock market targets, citing worries about higher interest rates. His 1999 year-end forecast for the S&P500 has been marked down to 1400 from 1500 and in 2000, to 1550 from 1650. His corresponding equivalents for the Dow are now 12,250 in 1999 and 12,500 in 2000. The changes bring him closer to Cohen's 1999 targets. She expects the S&P500 to be at 1385 at the end of this year, with a corresponding Dow target of 11,500. For 2000, Cohen's 12-month forward target for the S&P500 is 1450. Applegate said the current weakness is an ''old-fashioned cyclical correction occasioned mainly by higher interest rates.'' He urged investors to look closely at Internet stocks, saying traditional price/earnings ratios may not be helpful when trying to find good opportunities. Applegate said investors should be thinking about ''click and mortar'' instead of ''bricks and mortar'' as they address the monumental changes due to the combination of globalism and the rise of the Internet. He pointed to big gains in Lehman indices with technology stocks, including even one, ''comprised of largely doggy pharmaceuticals and consumer staples''.

To: Wally Mastroly who wrote (9391)	10/18/1999 9:06:00 PM
From: Justa Werkenstiff	Read Replies (4) \| Respond to of 15132

Wally: I don't think Mr. Market will be focusing so much on the CPI. I don't think that number can cause a sustainable rally. Last month, the CPI and the PPI came in benign and the market didn't care. Now Mr. Market is focusing on earnings. Forget about Q3. It is history. Even if a company posts good numbers, it will fade within days. The pattern is undeniable -- sell the earnings. And now Mr. Market has some big questions going into Q4 after DELL warned tonight. That has quickly become the focus.