|
|
|
|
|
|
|
mentum initiated by year-end purchases over the last 2-weeks, (3) a resumption of the euphoria for Internet issues, (4) recent indications that individual investors are putting money back into the stock market after several weeks of withdrawals. |
|
|
|
|
|
|
|
|
Bearish factors included (1) profit taking in the large-cap issues, (2) a decline in telephone shares as Bell Atlantic was reported in talks to purchase AirTouch, (3) valuation concerns with the S&P 500's P/E ratio touching an all-time high of 31.9 on Dec 23rd (more than twice its long-term historical average), and (4) a narrowing of the market's breadth in December as the majority of the gains were confined to a number of high-tech stocks. |
|
|
|
|
|
|
|
|
At the top of the most active list on a whopping 101.31 million shares was Amoco (+9.4%). The oil company dropped sharply last Wednesday as the approval of the $61.7 bln purchase by British Petroleum will result in the company falling out of the S&P 500 index. However, global investors realized that the merger puts Amoco into the FTSE-100 and money managers tracking the UK index must acquire the shares. America Online (+5.2%) was the second most active issue on 39.82 million shares as the hoopla surrounding its inclusion in the S&P 500 index last Thursday proved strongly positive. Compuware (+1.6%) rose on 20.40 million shares and posted a fresh 52-week high. Last Wednesday, Fortune named Compuware one of the 100 best companies to work for in America. |
|
|
|
|
|
|
|
|
Of the S&P 500's 89 sub-indexes, 47 closed higher last Thursday while 41 closed lower. Market breadth was bullish with 301 of the S&P 500 stocks closing lower while 183 rose. On a capitalization weighted basis, the financial sub-index (2.05%) was the worst performing group in the S&P 500 index as Citigroup (1-1/16), Fannie Mae (1-9/16), and Morgan Stanley Dean Witter (2-3/16) all fell. Although financial companies expect another busy year in 1999, investors are cautious about the ability of the US securities industry to place more than the record of $1.82 trillion in securities set in 1998. The money center bank sub-index (2.55%) was the second poorest performing group followed by the telephone sub-index (1.01%) in the third slot. |
|
|
|
|
|