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Strategies & Market Trends : Position Trading Forum -- Ignore unavailable to you. Want to Upgrade?

To: Starduster who wrote (5677)	11/8/1998 7:20:00 PM
From: Tim Luke	Respond to of 7247

Sunday November 8, 6:35 pm Eastern Time U.S. stock market seen shrugging off Gingrich move By Dan Burns NEW YORK, Nov 8 (Reuters) - U.S. Rep. Newt Gingrich's stunning announcement that he would quit his post as speaker of the House of Representatives should not have a major effect on U.S. stock prices, market strategists said Sunday. ''My guess is that it will not have much impact. If it does, it will be somewhat favorable,'' said Peter Canelo, U.S. equity strategist for Morgan Stanley Dean Witter. His view was echoed by Hugh Johnson, chief investment officer for First Albany. ''I'm hard pressed to figure out how it might have any impact at all,'' Johnson said. ''There are so many other issues facing the market that are far more important that I have a hard time seeing this one getting on the radar screen.'' Gingrich, the Georgia Republican widely credited with engineering ''the Republican revolution'' that brought his party majority status in 1994, shocked supporters and naysayers alike on Friday when he said he would relinquish the speaker's post. Gingrich also said he would leave Congress entirely when his current term expires in January, declining to serve the two-year term he won by a wide margin on Tuesday to represent his suburban Atlanta district. He had come under fire from GOP colleagues seeking to blame him for the party's setback in Tuesday's mid-term elections. Republicans lost five seats in the House and managed only to break even in the Senate, during a year in which they were expected to add significantly to their majorities in both chambers. Canelo and Johnson said that in the longer view, the stock market would welcome a more moderate leadership in the House, reasoning that a less divisive approach to governing would mean more pro-business legislation would be passed. ''There would be a little less outlook for gridlock with a more moderate leadership,'' Canelo said. Johnson also said Gingrich's departure would be particularly welcome if it means a shorter, less disruptive impeachment inquiry into the Clinton-Lewinsky affair. ''There is less chance of a long interruption in leadership at a crucial time in our financial history,'' he said. ''On balance it's probably a positive development,'' Johnson said. ''It carves out a hostile component. He's been a very confrontational speaker, very often.'' Both analysts agreed that on the immediate scene the Gingrich news could have a firming effect on the U.S. dollar as international investors interpret the news as a harbinger of stability. Over the weekend, the dollar gained against both the Japanese yen and the German mark. On Friday, the Dow Jones Industrial Average closed up 59.99 points at 8975.46, capping a week in which the blue chips rose 4.4 percent. The Nasdaq closed up 19.46 points at 1856.56, bringing the week's rise to 4.8 percent. --------------------------------------------------------------------------------