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To: Alex who wrote (23900)	12/6/1998 7:22:00 PM
From: goldsnow	Respond to of 116764

Bulls Dreaming of Dow 10,000 Sunday, 6 December 1998 N E W Y O R K (AP) APPROACHING THE end of a wild year of ups and downs in the stock market, Wall Street's bulls still have their sights set on a target of Dow 10,000. That bull-market milestone is only a few hundred points beyond the record highs of 9,300-plus set by Dow Jones's average of 30 blue chip industrials in July and November. Even with its recent step back below the 9,000 level, the average would need a gain of only 12 percent to 13 percent in 1999 to take it into five-digit territory. The Dow has done that well or better in each of the past four years. Indeed, analysts such as Thomas Galvin at Donaldson, Lufkin & Jenrette Securities and Yale Hirsch, publisher of the annual Stock Trader's Almanac, talk up 11,000 as a possibility by the end of next year. This kind of optimism is by no means unanimous, however. Many professional investors, including people who run some of the big stock mutual funds, say it's very dangerous to project the future as a straight line running out of the recent past. To their way of thinking, the market's dramatic comeback this fall from its late-summer selloff looked like too much too soon, putting stocks back on the same overvalued perch from which they fell in July and August. Along with misgivings about valuation, many observers worry that corporate earnings growth will be a lot weaker in the foreseeable future than the torrid pace - about 13 percent a year, by some measures - set over the past five years. "This has been the best period of profit growth in this century," said John Ballen, chief investment officer at MFS Investment Management in Boston. But Galvin at DLJ says he believes annual earnings growth can continue at 10 percent to 12 percent over the next three years, bolstered by such influences as technological progress and opportunities to make new foreign investments at attractive costs. He also suggests that the so-called Y2K problem, involving the need to reconfigure many computers by the time the year 2,000 arrives, may have the beneficial side effect of increasing efficiency and productivity as it forces a general upgrade of computer systems. "We believe that as the consensus begins to ponder these factors, the bleak outlook currently shared by most will slowly dissipate," Galvin concludes. Hirsch, in the 1999 edition of his annual almanac, argues that the market is moving into the most bullish part of the four-year political cycle, the year before a presidential election. "No pre-presidential election year has lost ground in 60 years," he says. His explanation for this pattern: "Electing a president every four years has set in motion a political stock market cycle. Most bear markets take place in the first or second years after elections. Then the market improves. "What happens is that each administration usually does everything in its power to juice up the economy so that voters are in a positive mood at election time." Most important of all for the bullish case, say many analysts, is the recent series of three credit-easing moves by the Federal Reserve aimed at steering the economy clear of recession. Late last week, 11 European central banks also took steps to lower key interest rates. "Life is good when central bankers are on our side," says Greg Smith, investment strategist at Prudential Securities. "When central banks decide to provide more liquidity, they exert a powerful positive force. "There's every reason to believe that swift and significant action can prevent some of the economic problems that worried the world this summer from actually coming to pass."