THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, October 15, 1996 TAG: 9610150240
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: 43 lines
It hasn't brought a flood of new orders yet, but the 6,000-point milestone reached by the Dow Jones industrial average is fueling greater optimism among local investors, stock brokers in Hampton Roads said.
``There's a healthy flow of orders and a fair amount of conversation'' about the Dow surpassing 6,000, said Furman G. Wall Jr., senior vice president of Scott & Stringfellow Inc. and manager of the firm's eastern region. However, he said, ``today isn't much different than other days.''
One reason for the subdued reaction is that many investors have put money into the market for longer-term goals such as retirement, said Ron Dilks, manager of the Legg Mason Wood Walker office in Norfolk.
These investors, he said, tend to be less concerned about one-day events in the market than investors of past years.
At the Norfolk office of discount broker Charles Schwab & Co., the volume of inquiries from investors didn't change significantly as the Dow approached 6,000, manager Carlos Williams said. ``Clients have been taking it in stride,'' he said.
But Scott & Stringfellow's Wall expressed concern that some investors have gotten too enthusiastic about the sustained surge in stock prices. The Dow broke through the 5,000 mark less than a year ago, and other measures of stock prices, including the Standard & Poor's 500 and the Nasdaq composite index, have routinely hit new records.
For Wall, one troublesome sign has been thenumber of clients willing to lower their investment standards and buy lower quality stocks without doing sufficient research.
``People feel pretty good about what's happening, and their expectations are very high,'' he said. ``We have a new group of people in the market who only think that the market goes in one direction.''
The market's average annual return has been 9 percent to 11 percent, and the 20 percent to 30 percent gains of recent years can't continue indefinitely, he cautioned.
Wall said he remained optimistic about the market's long-term prospects. But investors, he said, will have to contend with an eventual downturn in stock prices:
``Let's face it, nobody knows when the next correction will come.'' by CNB