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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (5132)	6/5/2001 1:33:44 PM
From: upanddown	Respond to of 23153

getting this on E-mail now, FWIW Standard & Poor's The Outlook Market Insight for June 4, 2001 ~~~~~~~ Patience Will Be Rewarded ~~~~~~~~ By Arnie Kaufman, Editor, The Outlook Stocks may struggle in the near term. The market had come a long way to the recent recovery highs, largely on faith that Fed monetary easing would bear fruit. That faith is currently being tested by still-sluggish economic news and continuing profit warnings. S&P analysts are now looking for 2001 operating earnings on the S&P 500 of 52.02, down from more than 65.00 estimated for 2001 a year ago and 7% below the 56.16 earned in 2000. The angle of descent in estimates (illustrated in the logarithmic chart in this week's The Outlook) remains steep. We expect it will start moderating soon. Nevertheless, S&P research director Ken Shea sees earnings of less than 50.00 for the current year. Technical indicators aren't painting a pretty picture, either. Overhead supply, particularly among the big-cap tech stocks, is heavy and will continue to be a restraint. Also, sentiment readings quickly became too enthusiastic during the recent rally, according to S&P technical analyst Mark Arbeter. However, this is not a time to turn bearish. We continue to recommend that equities account for a sizable 65% of the average portfolio. S&P chief economist David Wyss has lowered his GDP growth forecast for the current quarter to essentially zero, after the first quarter's 1.3% rise. But Wyss has raised his sights for the second half to approximately 3 1/2%-4% growth. He feels the tax cuts will give GDP about a 1% (annual rate) boost. Earnings comparisons should turn positive in the fourth quarter, after four straight quarters of year-to-year declines. We expect S&P 500 profits to reach an all-time high in 2002. The recent pattern of rising peaks and troughs in the major stock indexes, which provides an incentive to buy on dips, was narrowly preserved by improvement in last week's final two sessions. Although stocks may continue consolidating for a while, we believe they will gain ground in the second half. Our yearend target for the "500" is 1350, or 7% above the current level.