Dow Reaches & Retreats From 14,000
Tuesday, July 17, 2007SUSIE GHARIB: A milestone on Wall Street today as the Dow crossed the 14,000 level for the first time ever. A batch of solid earnings and an upgrade of American Express helped push the blue chip average as high as 14,021 before it pared those gains in late trading. The Dow ended up 20 points at a new closing high of 13,971. With the Dow now up 12 percent for the year, Suzanne Pratt takes a look a where stocks are likely to head from here.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: The Dow visiting 14,000 came so quickly that investors are already wondering about the next round number for the blue chip index. Whether it's more likely to be 15,000 or a correction to 13,000 should be up for some debate on Wall Street. But most stock market strategists are by the nature of their business optimistic. And, the current environment is no different. AG Edwards' Al Goldman believes the Dow will see 15,000 before 13,000. Although he says the path could be circuitous.
AL GOLDMAN, CHIEF MARKET STRATEGIST, A.G. EDWARDS: But after you get up to and surpass a big round popular number, you tend to go into a little pause to refresh. So I wouldn't be surprised to see the market do a little siesta for a couple or three days or something like that. But, the trend is up and I assume that the next important stopping point will be 15,000.
PRATT: Bank of America's Joe Quinlan is also in the bullish camp, predicting the Dow will tack on an additional 3 to 5 percent by year end and hit 15,000 in 2008.
JOSEPH QUINLAN, MARKET STRATEGIST, BANK OF AMERICA: I would put the odds at 15,000 on the assumption that U.S. economy continues to expand, the Fed is on hold, interest rates stay in that range bound, say 5.25. We don't think they are going to go much higher than that. I am concerned about oil prices though.
PRATT: Many believe U.S. corporate earnings will continue to fuel stocks higher this year. According to First Call, analysts expect to see profit growth of nearly 6 percent for the S&P 500 in the third quarter and more than double that in the fourth quarter. But there are concerns about the longer-term outlook for stocks. Some market pros are worried not so much about sub-prime mortgage issues or oil prices as they are about U.S. politics in 2008.
QUILAN: I think the big issue is U.S. protectionism. And, as we go even closer into the 2008 election, I think investors are going to take some profits and step to the sidelines to see what actually happens in the election, who emerges and on what policy planks.
PRATT: That may be the case for U.S. stocks next year. Historically, however, presidential election years are usually good years for the stock market. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York
