Transcripts

Wall Street Experiences The Luck of the Irish

SUSIE GHARIB: There was plenty of green on Wall Street today and not just because it's Saint Patrick's Day. The Dow has surged 850 points or about 13 percent since last Monday. The big question for investors now is whether this rally is a sign that the markets have turned around for real. As Suzanne Pratt reports, the experts are divided. SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: The iconic bull statue is alive and well in lower Manhattan. Many investors, however, worry it may be years before they see an actual bull market again. That's not to say there won't be bear market rallies. In fact, many market pros believe that's what we're experiencing now. Equity strategist Tony Dwyer expects the bear market to continue as long as credit markets are sickly.

ANTHONY DWYER, EQUITY MARKET STRATEGIST, FTN MIDWEST SECURITIES: Ultimately, I don't think the selling of stocks is over, because there's still a problem in the financial sector and the ability of banks to lend or investors to give companies money to fund growth.

PRATT: But other market pros say the 17-month-old bear is looking tired and gray, particularly when you consider that recent bear markets have an average life span of about 13 months. Market veteran John Manley thinks this rally has legs.

JOHN MANLEY, SR. EQUITY STRATEGIST, CITI SMITH BARNEY: The money seems to be headed in the right direction, both here and overseas. And I think at some point in time, it turns. So, if it isn't this time, it's going to look an awful lot like it does this time.

PRATT: Manley says one sign the bear market could be nearing an end is the excessively negative investor sentiment that was palpable a few weeks ago. On top of that, he believes the president's stimulus plan will soon start to help spending. And while he predicts the rest of this year will be choppy for equity investors, he expects the major averages to gain as much as 20 percent from their lows.

MANLEY: I think we end the year higher than we are now and perhaps substantially higher. It's a very tough call. Obviously, it's always a tough call. But this hangs on the economy and what the economy does and our perception of the economy.

PRATT: The unfortunate thing for investors, many who've already lost half of their portfolios, is that we won't know the bear market is over until many months pass. That means investors are likely to miss out on the early gains of the next bull market. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.