PERSONAL INVESTING(2): Can Stocks Withstand A Burst of Bad News? Kaufman Fears Impact
Stock prices have remained lofty throughout the recession on the hope that the economy would soon be getting better. It didnÛªt hurt, of course, that millions of Americans pinched by lowier yields on their savings were for<5ed to seek shelter in the stock market.</br></br>But. can the stock market survive another downturn in the economy? And what should investors be doing if they think the answer is no? tt's' first hear the view of two of StreetÛªs sawiest market observ-ers--economist Henry Kaufman and Paiil Guenther, president of Paine-Webberlnc.</br></br>Kfflfman is afraid of the stock market; and worried how it will affect AmericansÛª spending whenÛÓnot ifÛÓit falls, ÛÏt donÛªt think households fully appreciate what they are getting into," he said in a recent interview.</br></br>Guenther takes a more traditional Wail Street view. Where, he recently wondered, are small investors going to put; their money if not in the stock market? In other words, good economy) or not, Guenther is betting that stock prices can stay up.</br></br>The economy has slowed from last yearÛªs pace. It might technically be heading back into a recession, although even pessimists expect it to eke out annual growth of at least 1 percent this quarter. Some people think the recession never really ended.