Stock Smarts: No Saddam, No Usama, No Bull?
On Tuesday, July 22, stocks were headed for a down day. Then news of the killings of Saddam Hussein’s sons Uday (search) and Qusay (search) hit the market and stocks responded with a rally. But the two big fish – Saddam himself and Usama bin Laden – are still out there.
Can we expect the Dow to go to 10,000 and beyond without Saddam and Usama in the bag?
Hilary Kramer of A&G Capital says we have to get both Saddam and Usama to get confidence back into the market, and when we do catch them she says we’ll see the “bull stampede like never before.”
Dagen McDowell of FOX Business News agrees with Hilary. She says more and more investors are starting to worry about American casualties in Iraq, and the amount of money it is costing us to keep soldiers there, and catching Saddam and Usama would be a sign we were making progress.
Gary Kaltbaum of Kaltbaum & Associates says he thinks investors have to be careful about anticipating a rally on the deaths of either Hussein or bin Laden. While he believes the market will rally if we capture either of them, he says that will be an event-driven rally that is not likely to last very long.
Wayne Rogers of Wayne Rogers & Co says he doesn’t think the market needs to see those two captured or killed to rally. He says the market is going to react to earnings and economic news, and it won’t make a difference whether we have Saddam and Usama. If earnings are positive and the economic news is good, the Dow will rally.
Jonathan Hoenig of Capitalistpig Asset Management says he began shorting the Dow last week (betting it will fall). He’s getting nervous about stocks, and he doesn’t think capturing or killing Saddam and Usama will make a difference. He says rising bond yields and the fact that gold and silver stocks are heating up again are making him wary of stocks.
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Jonathan's Dow Winner: International Paper (IP)
52-week high: $40.82
52-week low: $31.35
Friday's close: $38.20
Gary K. says IP needs to break out of the trading range it has been in for some time before he’d be interested. Wayne says he’s neutral on the stock. He says the chart looks dead to him.
Wayne's Dow Winner: Intel (INTC)
52-week high: $25.50
52-week low: $12.95
Friday's close: $24.91
Hilary is very bullish on Intel. She says Intel’s wireless chip will help boost profits. Jonathan does not like Intel. He says if he had to buy a semi-conductor stock, he would buy KLA-Tencor (KLAC) or Applied Materials (AMAT).
Hilary's Dow Winner: Microsoft (MSFT)
52-week high: $29.48
52-week low: $20.71
Friday's close: $26.89