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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Mark who wrote (374)	12/30/1998 6:00:00 PM
From: Roy F	Read Replies (2) \| Respond to of 41369

Perspective on tomorrow's action: moneycentral.msn.com <snip> But some analysts are warning that Thursday's ride may be considerably more bumpy, as index-fund managers rush in the last hour of trading to make adjustments to their portfolios to accommodate the inclusion of America Online in the S&P 500. Richard Scarlata, director of research at Sutton Financial Services, says he fully expects the market to be buffeted by massive index fund selling in a volatile last hour of trading. "I believe we'll see least $5 billion sold in the final minutes of trading in order to make room for AOL," he said. While AOL shares should climb, he believes other S&P components will fall. The market's already anemic trading conditions will only add to the volatility, Mr. Scarlata says: "For this to be happening at the end of the year when no one is around is incredible to me. It's going to cause a huge one-day dislocation." As proof, he cites Microsoft's (MSFT) inclusion in the index in June 1994. "The Dow closed at its low for the day and most indicators posted losses of between 2% and 3%," he said. Steven Goldman, market strategist at Weeden & Co., also thinks Thursday's session may end the year on a weak note, but he discounts the AOL effect. "If we look back at the last six years, five have been down at the end of the year, so traditionally there's been some cross currents," he said. But he said the fact that AOL is being added into the S&P 500 shouldn't have that great an impact on the session's outcome. "[Amoco (AN)], which is the 49th biggest stock on the S&P, will be leaving the index tomorrow, so that should go a long way in helping to offset the AOL effect." Amoco's merger with British Petroleum (BP) will close Thursday. <snip> Regards, Roy