WP: S&P, Nasdaq Hit 4-Year High ("bandwagon effect building")

[DeepModem Mom]

S&P, Nasdaq Hit 4-Year High
By Jerry Knight
Washington Post Staff Writer
Thursday, July 28, 2005; 5:41 PM


Strong corporate profits kept the stock market climbing today, boosting the Nasdaq Stock Market composite index and the Standard & Poor's 500 stock index to new four-year highs....

***

About 350 of the stocks in the S&P 500 index have reported quarterly earnings so far and 70 percent of them delivered bigger profits than expected, according to Bloomberg News calculations. Large numbers of companies have also boosted their projections of profits for the rest of the years, including Starbucks and Bristol-Myers Squibb.

Earnings -- and projected earnings -- are the most important factor in stock prices, but the market is also benefiting from increasing confidence in the strength of the economy.

Comments from Wall Street strategists and analysts suggest a bandwagon effect is building, as investors look at the steadily rising market and decide they don't want to be left behind.

The buying trend is so strong that the market today was not deterred by the rising price of crude oil, which climbed back toward $60 a barrel, closing up 83 cents at $59.94. Crude prices, which a few weeks ago were pushing stocks down whenever they went up, have been inching up recently with little impact on the market....


http://www.washingtonpost.com/wp-dyn/content/article/2005/07/28/AR2005072801395.html

[Skittles]

1. four year high, big deal

tell me when the stock market goes higher than when Clinton was in office please

[The_Casual_Observer]

2. That's today, wait until they do a "profit taking" and "correcting"

The standard price for oil is now about $57, China has all the money, this fraud can't last forever.

[hatrack]

3. Bigger Idiot Effect Building

This, too, shall pass away.

[wli]

4. 1929 redux as usual

It's all intangible garbage, and will fall when they run out of investors to con (which they will, since the investors have finite amounts of money to tie up). Pure Ponzi.

[still_one]

5. let me give you some perspective

Nasdaq at its high under Clinton was 5000, today it is 2198

The S&P 500 at its high under Clinton was around 1550, today it is 1243

The Dow is an extremely inaccurate index because they constant pull out losers are readjust the average. In fact they do that with all the indexes, but more frequently with the dow

Several trends are extremely troubling:

1. The deficiet is huge
2. Consumer debt is huge
3. Inflation has never been worse, and high energy is hurting people
4. Unemployment is misleading. Once people fall off the rolls they are never counted again. In addition, temporary or part time jobs from students are counted in the regular job pool.
5. The Fed is increasing interest rates, and this is never good for the market. What is happening here is Greenspan is a day late and a dollar short. He is concerned about some of the high risk loans for houses, and is worried about a real estate bubble, and is trying to contain it. This is the second mistake he has made. When the stock market was booming due to the internet boom, he could have stepping in and increased the margin requirement, and discourage the speculation, but instead he forced the crash by increasing the prime, until the stock market bubble burst. People's retirements and accounts were wipped out. He then decreased interest rates to record lows. Now he is trying to undo that mistake, and at the same time cool-off the real estate market, where their has been a lot of speculation. If he screws up on this one, the last stock market crash will be childs play.

Business news is distorted, and the analysts are notoriously wrong, and have a conflict of interest. Please remember very few predicted the crash in 2001

[CAG]

10. And yet, despite Bush obviously destroying the economy, the voters

decided that making sure gays can't marry and rewarding the administration over taking an Iraq detour in the war on terror was much more important than the fact that all of our investments and retirement accounts will go nowhere over several years.

[bemildred]

6. Yes! A new bubble! Yes! Bring it on! nt

[Roland99]

7. Prepare for the crash within the next 18 months

[DBoon]

8. Investors are hiding their money in stocks

anticipating a collapse in real estate.

[still_one]

9. if a collapse in real estate occurs the only safe place

will be treasuries, and if you were luckey enough to buy a house at least 10 years ago

everything else will be a disaster

[teryang]

11. Interest rates have to be kept low to finance war

The interest rate increases will begin in earnest when a substantial attempt to reign in Pentagon spending begins. Right now the pie in the sky economy is growing mantra will be continued until defeat of objectives in Iraq and elsewhere in Asia is recognized.

[jwcomer]

12. Purely inflationary

The increase in the markets is entirely explained by the debasing of dollar currency. In other words, this is nothing but good old fashioned inflation. This is apallingly clear if you reprice the markets in baskets of foreign currencies. However, since all currencies are debsing that only works so well. Unfortunately, our inflation indices are not trustworthy, so foreign currency baskets really are probably the best proxy for dollar devalation.

[54anickel]

13. Have you noticed the Commerce Depts GDP revisions haven't gotten

a lot of press? If the market is "benefiting from increasing confidence in the strength of the economy", they'd best take a closer looksie.


US growth weaker, inflation stronger in 2002-2004
http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-29T123254Z_01_N27284242_RTRIDST_0_ECONOMY-GDP-REVISION.XML

WASHINGTON, July 29 (Reuters) - The U.S. recovery from the 2001 recession was the weakest in more than 50 years, while inflation last year was stronger than first thought, new government data show.

Annual revisions to U.S. gross domestic product released on Friday by the Commerce Department suggest the Federal Reserve has been right to worry about rising inflation despite previous data showing fairly tame price pressures.

At the same time, the new figures, which reflect more complete source data, confirm what many analysts had suspected: the U.S. economy struggled to climb out of the 2001 recession, posting the slowest recovery on records dating back to 1949.

From the cyclical trough of GDP in the third quarter of 2001 to the fourth quarter of 2004, the revised data show real GDP increased at an average annual rate of just 3.1 percent, slower than the 3.4 percent previously reported.

snip>

In the fourth quarter alone, the core PCE price index climbed at an annual 2.3 percent rate, well above the previously reported 1.7 percent increase.

more...

[Moxygirl]

14. I'm glad they waited to tell us inflation was actually

higher than previously thought so all those bogus cost of living increases we all got the last few years have put us farther in the hole than we expected. SARCASM!