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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: S. maltophilia who wrote (90522)	4/3/2001 10:12:06 AM
From: LowtherAcademy	Read Replies (2) \| Respond to of 132070

Salomon Advises Clients to Buy Stocks Apr 3 9:24am ET By Nick Olivari NEW YORK (Reuters) - Salomon Smith Barney investment strategists advised clients to buy more stocks on Tuesday, saying financial sector shares will be the next market leaders, even as they cut year-end targets for the major indices. Tobias Levkovich and John Manley increased the weighting in the firm's model portfolio to 70 percent equities from 65 percent, cut bonds to 25 percent from 30 percent, and left cash unchanged at 5 percent. They cut the year-end price target on the Standard & Poor's 500 index to 1400 from 1450, and on the Dow Jones Industrial Average to 11,400 from 11,750. Levkovich and Manley said though they are more bullish on stocks "we would still warn investors that we do not anticipate any major recovery in the technology sector" because of excess capacity. "Much of tech wreck seems behind us, but we are unlikely to see more than a near term trading rally in the tech sector," Tobias said in a note to clients. Levkovich and Manley suggested economic growth will be stoked by central banks around the world cutting interest rates, alongside governments cutting taxes. They see finance stocks as being the next market leaders driven in part, by lower interest rates. "While we believe that many investors are still longing for the technology sector to recover and lead the overall equity market higher, we would point out that yesterday's leaders typically do not come back and re-establish leadership," Tobias said. "In fact, we think that the money center names should begin to strengthen in the next couple of months." Salomon added Wells Fargo to the Salomon Smith Barney Recommended List, and told investors to overweight the financial sector. Salomon's recommended list now includes Wells Fargo, Bank of New York , Chubb Corp , Freddie Mac , Merrill Lynch , and John Hancock . Other names they like include Morgan Stanley , Goldman Sachs , and JP Morgan Chase . They also recommend investors overweight the transportation sector, mainly railroads, and capital goods sector, such as General Electric and Emerson Electric , and utilities. Salomon advises a market weight for the technology and health care names, but an underweight view for the basic materials, telecom, consumer staples and energy sectors. Salomon cut price targets on the S&P 500 and Dow average to reflect the firm's 2001 earnings-per-share estimate of $53 for the S&P 500. While, Salamon's targets reflect a 20 percent jump from the current levels for the S&P 500 and the Dow average, the year-over-year gain would be only a 6 percent advance in 2001, Tobias said. , "We would argue that the go-go days of the market are unlikely to return in the near term and that investors need to readjust their expectations to more reasonable returns," Levkovich and Manley said. "Nonetheless, from current levels, we would highlight that attractive returns are attainable." Salomon was the latest Wall Street firm to cut year-end targets for the major indices. Lehman Bros investment strategist Jeffrey Applegate cut forecasts for the S&P 500 index to 1,400 from 1,600 last week. and the Dow to 11,000 from 12,500. J.P. Morgan Securities chief equity strategist Douglas Cliggott cut his year-end forecast for the S&P 500 to 1,300 from 1,400 last week because of lower-than-expected corporate earnings