Stock Analysts Discount Jitters: Analysts Discount Jitters
NEW YORKÛÓDespite the stock marketÛªs broad retreat, analysts see considerable underlying -strength remaining in the market, with the potential for further advancesÛÓprovided inflation stabilizes at a moderate level.</br></br>Many analysts feel that after the marketÛªs 40 per cent spurt in the first half, it needs to consolidate gains, and may therefore continue to go through a downward ÛÏcorrectionÛ in coming months. But they say it will probably stage another major advance later this year.</br></br>ÛÏThe market has some digesting to do after the initial rush up and enthusiasm,Û says Robert Farrell, research chief at Merrill Lynch, Pierce, Fenner & Smith.</br></br>ÛÏOn an interim basis, the market seems extended and a little ahead of the economy at this stage,Û he notes, anticipating an upturn even more than in case of past recoveries. He therefore predicts the market ÛÏmight drop 10 to 15 per cent through fall or early winter.Û</br></br>But sometime in the fourth quarter, Farrell sees ÛÏanother strong rise tied to the strength of the economy.Û ÛÏI think weÛªre still in a bull market, but the bull market is going ÐÊ to slow down considerably for the next six months,Û says the dean of Wall Street analysts, Lucien 0. Hooper, a vice president with Thomson & McKinnon Auchincloss Kohlmeyer.