An Appraisal: Brokerage Houses Could Face Cuts as Summer Ends
NEW YORK -- Labor Day is past, effectively putting the summer behind Wall Street. Ahead lies uncertainty about the economy, the anniversary of the stock market crash and a presidential election. But just how much difference will the change of seasons make to the stock market?</br></br>Not much, to hear some analysts tell it.</br></br>"The passage of Labor Day is a non-event," proclaims Michael Metz, a portfolio analyst at Oppenheimer & Co. "What the market has been telling us is that most people have no conviction and plenty of cash. It's been a trader's market, and it's going to remain a trader's market until we get some internal or external stimulus."</br></br>The best news the market could get, Mr. Metz says, would be more evidence that the Federal Reserve's credit-tightening moves are beginning to slow the economy. Last week's declines in the index of leading economic indicators and in home sales were encouraging from this point of view, he says, as was Friday's announcement of a relatively modest rise in non-farm payrolls in August.</br></br>That news sent the Dow Jones Industrial Average on a giddy rise of more than 50 points. But investors may need to be shown more. Friday's volume, after subtracting a big dividend-capture trade, was only moderate at around 150 million shares.