Newspaper article THE JOURNAL RECORD

Analysts Fear Investors May Become Impatient Waiting for Recovery

Newspaper article THE JOURNAL RECORD

Analysts Fear Investors May Become Impatient Waiting for Recovery

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As the recession grows longer, some analysts worry that patience is getting shorter among investors in the financial markets.

Most observers still believe a business recovery is in prospect to fulfill the high hopes that have carried stock prices sharply higher in recent months.

But if Wall Streeters are going to get what they want, it looks more and more as though they will have to wait longer than expected.

Should the suspense drag on too much further, analysts say, the large crowd of optimists in stocks could start suffering some defections.

``There are signs that where we're going is good,'' said Hugh Johnson, an analyst at First Albany Corp. in Albany, N.Y. ``But there's also a risk that there's going to be a delay before we get those good things.

``We're at the point where investors think it's about time to start seeing some results. If they don't, you might see a correction in the stock market, and it could knock your socks off.''

The Federal Reserve Board evidently came to much the same conclusion in the past week, lowering its discount rate from 6 percent to 5.5 percent, for the third reduction over the last five months in the charge it sets on loans to private financial institutions.

Within a day, several large banks lowered their prime lending rates from 9 percent to 8.5 percent.

The response in the stock market was positive, but not ebullient, suggesting that traders were in no great rush to double up their bets on economic recovery in the immediate future.

``The confidence in the economic outlook that Americans expressed after the dramatic conclusion of the Persian Gulf War has yielded to confusion,'' said David A. Levy and S. …

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