Magazine article American Banker

Enthusiasts of Roaring Market See 10,000-Point Dow for 1999

Magazine article American Banker

Enthusiasts of Roaring Market See 10,000-Point Dow for 1999

Article excerpt

Despite last week's wild ride in stocks, including bank shares, Wall Street's leading bulls are refusing to pull in their horns.

Ralph J. Acampora, director of technical research at Prudential Securities Inc., said he continues to expect a 10,000-point milestone for the Dow Jones industrial average, but next year rather than this month as previously predicted.

Similarly, Craig Callahan, president and chief investment officer of Meridian Investment, Englewood, Colo., says the Dow will probably reach the 10,000 mark by early 1999 and top 15,000 by 2002.

Mr. Callahan said he remains unfazed by last week's gyrations. In fact, he recently moved up his prediction of a 10,000 Dow to 1999, from 2000.

Strategist Elaine M. Garzaralli, who gained fame for predicting the 1987 stock market crash, also remains a steadfast bull.

Ms. Garzarelli said she continues to see prospects for a substantial upside in the market-and is still bullish on regional banks, according to her assistant, Alida Melkonian.

The bulls continue to see a benign economic climate, enhancing growth prospects for equities.

The stock market, and bank stocks, will continue to climb because inflation and interest rates are likely to remain low, Ms. Garzarelli wrote in a recent report.

"We are not convinced that the Fed will raise interest rates again in this cycle," Ms. Garzarelli wrote. "The dampening effect of the Asian economic problems will likely provide the moderating influence required to cool the economy."

Reinforcing the prospect of low inflation, traditional indicators such as gold and lumber prices continue to be extraordinarily tame, while the dollar remains strong.

"Some margin squeeze for corporations is likely," Ms. Garzarelli wrote. "Not price increases."

Nor do the bulls see the stocks as overvalued and ripe for a significant correction. …

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