Poor Earnings Didn't Derail Market Bounce; Analysts of Three Minds On Indications for 2002
Since Sept. 21, the Nasdaq composite index has roared back 34 percent and the Dow Jones industrial average is up 20 percent, nearly to 10,000, where it had not been since August.</br></br>Is the market anticipating an economic rally next year? Is the country more confident because of military success in Afghanistan? Can this stock market recovery last?</br></br>The different answers come from three camps: bull, bear and a third group that wonders why the questions are being asked at all.</br></br>Since the Sept. 11 attacks made the whole world, including the stock market, riskier, some think that valuing stocks at their pre- attack levels is unjustified.</br></br>"For now, the market has moved too far, too fast," said Alan Ackerman, chief investment strategist at Fahnestock and Co. "A contraction in the market now would be neither unexpected nor unhealthy." "My hesitancy about this market is that absolute valuations are still absurdly high, whether you look at price-to-book ratios, price- to-earnings. . . . They're all off the chart," said Jim Paulsen, chief investment officer at Wells Capital Management.