Some Pros See Rally Continuing
The bulls are starting to run again--at least among Wall Street’s best-known investment strategists.
With stocks staging sharp gains for two straight weeks, more Wall Street pros are giving clients the green light to pour new money into the market.
A sampling of strategists’ actions on Monday:
* Morgan Stanley Dean Witter chief U.S. stock strategist Byron Wien raised the stocks portion of his recommended U.S. portfolio to 85% from 80%, and cut the cash portion to 15% from 20%.
Morgan Stanley specifically suggests that buyers look to rallying financial services stocks for more gains ahead--in particular, Bank of New York (ticker symbol: BK; Monday close: $40.50); American International Group (AIG, $100.25) and Fannie Mae (FNM; $68.75).
Peter Canelo, a co-strategist with Wien, said the market should be supported by productivity gains and a stabilizing U.S. dollar. He said that even if the Federal Reserve raises interest rates at its Nov. 16 meeting, that is largely factored into the market.
* Joseph Battipaglia, investment policy chief at Gruntal & Co. in New York, on Monday raised his year-end price target for the Nasdaq composite index to 3,100 from 2,900.
The index closed Monday at a record 2,967.65. A rise to 3,100 would be a 4.5% gain from here.
“I believe the market will continue to rally through the end of the year on strong earnings, an absence of Federal Reserve action, and the passing of any lingering Y2K concerns,” Battipaglia told clients.
* Christine Callies, market strategist at Credit Suisse First Boston, on Monday raised her earnings estimates for the Standard & Poor’s 500 companies for 1999 and 2000, citing in part the strong results many companies have posted for the third quarter.
She boosted her 1999 estimate by 3.7%, to $49.09 per S&P; index “share,” and her 2000 estimate by 5.6%, to $54.27. Those figures reflect operating earnings, or results before one-time items.
