Check out the record setting conference board numbers.....
Bollinger says the market has been so weak that its oversold and time
for new highs...... Tony Dwyer will a very technical explanation of why the market rallied monday ...-G-
and one confused and lonely little bear cub rears her head with a silly notion that the market does not always go straight up...-G-
The CONFERENCE BOARD reports its consumer confidence index rose from 128.9 in January to 132.1 in February, highest in the 32-year history of the index.
WHAT'S AHEAD WEDNESDAY:
FEDERAL RESERVE BOARD CHAIRMAN ALAN GREENSPAN repeats his semi-annual Humphrey-Hawkins testimony for the HOUSE BANKING COMMITTEE.
FROM THE BULLS:
"During this consolidation the market has become quite oversold by a number of measures," says JOHN BOLLINGER, president of EQUITYTRADER.COM. "One of those is called the high-low index." He's looking for a "breakout to new highs by the big averages." He's not too worried about lack of breadth, saying "it's simply a fact of this market" that investors are choosing from among a fairly narrow group of large stocks. (CNBC "Street Signs", 2/23)
"I think we're in the early stages of a transition point where lower interest rates guided the market higher last year [and] earnings are going to have to take it higher this year," says THOMAS GALVIN of DONALDSON, LUFKIN & JENRETTE. "But investors are still going to need to see more data points before they feel convinced of that and until that time, market breadth will remain narrow, favoring only a few predicable growers. But we think in the second half earnings growth will rebound and that will help to broaden the market advances." He still sees the Dow hitting 11,000 this year. (CNBC "Market Wrap", 2/23)
"I'm fairly optimistic for the first half [of the year]," says BYRON WIEN of MORGAN STANLEY DEAN WITTER. "I don't know if it will be strong for the entire half, but I think the rally we are currently in is going to continue. At the beginning of the year, I thought 10,000 would be an easy shot. At the end of the first week, I thought we'd make it at the end of January. It's taking a little longer than that, but apparently won't take a lot longer than that. The market is going to go to 10,000. ... I have more worries about the second half, but for the moment I think the market is headed higher." (CNN
"Moneyline", 2/22)
"There had been a concern that when the air came out of a high-flying sector like tech it would bring down everything else," says MICHAEL CLARK at CREDIT SUISSE FIRST BOSTON. ""Well, the Nasdaq corrected and it didn't bring the rest of the market down. If you start to see breadth improve, then you could see the market move toward 10,000." He continues: "Just when you're thinking the market's overvalued, here are people in the merger-and-acquisition arena disagreeing with that. And they're willing to take strategic bets that the market will go up." (NYT and "The Washington Post", 2/23)
FROM THE BEARS:
"Whenever I see a market up as strongly as this one has been ... you can't just can't expect we're going to see those very strong gains in the near term, so I'd expect with these interest rates moving up here a little backtracking maybe," says MARY FARRELL of PAINEWEBBER. (CNBC "Market Wrap", 2/23)
STOCK MARKET:
"Alan [Greenspan] certainly has a way of putting a stop to [Monday's] rally, there's no doubt," says JOSEPH CANGEMI of FRANCIS P. MAGLIO. "He added a little emphasis to his statements [Tuesday] morning. The market turned around almost a 100-point swing to the downside. ... I think it kind of scared the institutional investors out of the market for the day." (CNBC "Street Signs", 2/23)
"I think there's a Darwinian sense going on in corporate America where the big are getting bigger and the best are getting better and you want to want to be with the market leaders," says KEN CORBA, who is taking over as portfolio manager of the PIMCO GROWTH FUND in about 10 days. (CNBC
"Street Signs", 2/23)
"I've been asked five times today [Monday] why the market is going up so high," says MITCHELL HELD at SALOMON SMITH BARNEY. "I've been searching and it's been tough to come up with a good reason -- other than there are more buyers than sellers. I don't know. I don't know." ("The Washington Post", 2/23)
"In some ways, the market seemed to have floated up, rather than been driven up," says JOHN LAUER of SCHWAB 500. (WSJ, 2/23)
"People wanted to take advantage of the weakness of the past few weeks," says TONY DWYER of LADENBURG THALMANN. ("USA Today", 2/23)
"This [strength] defies imagination," says RICHARD STEINBERG of STEINBERG GLOBAL ASSET MANAGEMENT. He says loosened program trading rules may be one explanation.
"Program traders have more flexibility to throw money
around," says Steinberg. "It's going to affect the market." ("The Washington Post", 2/23)
ALAN SKRAINKA at EDWARD JONES says Fed Chairman Alan Greenspan "will have nothing but good news to deliver" for the stock market in his Humphrey-Hawkins testimony. ("USA Today", 2/23)
"I would think if Greenspan comes out and reaffirms a neutral bias it would be good for bonds and I think it would be good for stocks," says ROBERT WALTON at NOMURA SECURITIES INTERNATIONAL. (WSJ, 2/23)
"The bigger the turnover, the more likely it is that a stock is being held by traders and the more dangerous it becomes for investors," says PHIL ROTH of MORGAN STANLEY DEAN WITTER. "The more trading they do, the more decisions they'll have to make and the worse they'll perform." ("USA Today", 2/23))
"The Fed is concerned where the market is going," says LYLE GRAMLEY, the former Fed governor now with the MORTGAGE BANKERS ASSOCIATION. "It's not going to target the market, but if the market keeps driving the economy as strong as it has been, then eventually the Fed will have to raise interest rates." (PBS "Nightly Business Report", 2/22)
"The Fed is really a prisoner of the stock market this year, in that it really limits the Fed's ability to act preemptively," says PAUL KAZRIEL of NORTHERN TRUST. (PBS
"Nightly Business Report", 2/22)
PETER COOLIDGE of BREAN MURRAY & CO. says Monday's gains helped establish "quite an impressive rally" and that
"there was much more broad-based participation" than had been seen in some time. (WSJ, 2/23)
"In a long bull market, everyone is a genius," says TERRANCE ODEAN of the UNIVERSITY OF CALIFORNIA AT DAVIS.
"If you get people with a short-term perspective, they are not going to hang around if something goes wrong." ("USA Today", 2/23)
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