Stock Smarts: Stocks Battle Back!
Usama bin Laden may be alive, but a bunch of his high-ranking Al Qaeda members have been captured or killed. And Saddam Hussein may still be in charge, but that may not last much longer with the world lining up to disarm him.
Battle by battle, we are winning the war on terror – and the market likes what it sees. Stocks are on a spectacular run since hitting one-year lows in October:
Dow -- Up 22 percent
Nasdaq -- Up 33 percent
S&P 500 -- Up 21 percent
Since October 9, 2002
Can we keep going higher from here?
Joe Battipaglia of Ryan, Beck & Co. says President Bush is not only winning the war on terror internationally, he’s winning big here at home with homeland security, terror insurance and a republican majority which suggests to him that tax relief can’t be far behind. Joe says the market is gearing up for that. He thinks healthcare and financial services should provide strong leadership.
Dagen McDowell of FOX Business News says the market is reacting to better economic news and better earnings, and she says if holiday sales look good the market could keep on running. She says it wouldn’t hurt to have positions in some big name tech stocks right now like Microsoft (MSFT) because PC sales could pick up.
Gary Kaltbaum of Tradingmarkets.com says President Bush has been underrated and is doing a great job in the war on terror. In addition, he says the economic numbers have gotten much better and all of these things have played into the current market rally. That said, he still thinks that this rally is just a breather in a longer-term secular bear market. He says he sees too much speculation in some stocks for the rally to be sustainable, particularly in shares that are trading for pennies, and in distressed stocks like Enron. He’s being very cautious right now. He says he’s watching the semi-conductor index for leadership, and if that index continues to do well he thinks the market can continue to do well.
Jonathan Hoenig of Capitalistpig Asset Management still says he’s still avoiding the major indexes and looking for selective trades among Internet stocks and emerging markets and some corporate and high yield bonds.
Hilary Kramer of Montgomery Asset Management says fast money is coming and going so quickly into stocks like Intel (INTC), Biogen (BGEN), and Merck (MRK) right now that the only way for individual investors to play these is “to go in, and go in for the long term.”
Which stocks does our group think will go up even if the market goes down?
Hilary's "Win-Win" Stock: Johnson & Johnson (JNJ)
52-week high: $65.89
52-week low: $41.40
Friday's close: $57.02
Jonathan calls this is “a weak stock in a weak area.” Joe likes the stock.
Jon's "Win-Win" Stock: Matav ADR (MTA)
52-week high: $19.98
52-week low: $13.71
Friday's close: $18.85