Abreast of the market: Wall Street still has the jitters despite first half's surge
Another quarter filled with worry. Another batch of record-smashing performances.</br></br>For the past two quarters the stock market has blithely ignored nervous calls for some sort of correction. Instead, prices have risen without interruption since last December, and major averages hover close to recently established record levels.</br></br>The Dow Jones Industrial Average has surged an astonishing 864.99 points, or more than 23%, since dipping to 3691.11 on Dec. 9. But as the third quarter opens, the same nervousness remains on Wall Street.</br></br>"I'm pessimistic," says Thomas McManus, market strategist at Morgan Stanley. "I'd like to see a period where the stock market was going up in anticipation of an expanding economy, with consumer confidence low and the bulk of improvements in profits ahead of us. But that's not the case right now."</br></br>Indeed, earnings have been unquestionably strong in the past year and have become one source of worry as the economy slows. And many analysts argue that the tremendous surge in the bond market, which has pushed yields sharply lower, gives that market little more positive room to maneuver. Many economists worry that if the Federal Reserve doesn't lower rates this week at its Federal Open Market Committee meeting, interest rates could start to inch higher, and hopes for a reacceleration in economic growth could fade.