Stocks And Bonds

AND YOU thought Alan Greenspan was helping the nation by keeping interest rates lower than they've been since 1961. Some economists are starting to worry that Greenspan's dose of puppy love contains poison as well as palliative. Low rates and huge injections of money into the economy in the 1990s are what got us into this trouble in the first place, these analysts point out. They're not sure the country needs much more of that medicine right now. They are concerned, to put a fine point on it, that Greenspan might be reinflating the bubble.

The Dow Jones average shaved 18 points yesterday from its && 64-point surge on Tuesday as the market declined yesterday in heavy trading. When Wall Street opened this morning, the Dow indicator stood at 2,926.73, still ahead 560 points from last October's 12-month low.LOOKING AHEAD: "I'm sweet on the market and see a 10-15 percent gain by year-end. Momentum is powerful, stocks don't topple in markets like this, the economy is recovering and our dollar is strong." (Martin Zweig) . . . "I'm upbeat.

Wall Street is hoping for a strong finish to a year that is turning out surprisingly well for financial markets. Despite rising interest rates, a plummeting dollar, a sharp jump in energy prices and slowing corporate profit growth, Americans are on track to make good money this year in the bread-and-butter investment categories of stocks and bonds. Things could always go wrong in December. But the calendar is on the side of the bulls: Investors typically have been an optimistic bunch in the last month of the year.

How would you invest $10,000 in the coming year? Each year I pose that question to a diverse group of investment pundits. This time around, responses vary a bit more than usual, although most experts remain generally bullish on stocks despite ongoing market, economic and political uncertainty.Here's the advice for that mythical 10 grand in 1993:Steven Einhorn, chief portfolio strategist for Goldman Sachs & Co.: "I'm bullish on stocks and bonds, so I'd put $6,500 in stocks and $3,500 in long-term U.S. government bonds.

NEW YORK -- U.S. stocks posted an across-the-board advance yesterday for the first time in eight days, powered by a late rally in technology companies and small advances in the dollar and Treasury bonds.Gains would probably have been larger if not for concern that today's initial estimate of the third-quarter gross domestic product will show rapid growth, prompting further rises in interest rates, traders said.Computer and semiconductor stocks "will look like an attractive group in the fourth quarter and into the first quarter of next year, whether you have higher interest rates or not," said David Butler, head of equity trading at Kemper Financial Services in Chicago.

BETWEEN Christmas and New Year's we look back and ahead. We also offer "this-week-only" money-savers.THE WAY WE WERE: "For stocks and bonds, 1995 rewrote the record books. Dow Jones average, which blasted through 5,000 for a 35 percent gain, closed at all-time highs more than 60 times."In 1995 bond prices surged over 25 percent, making this the best year ever for fixed-income markets." (U.S. News & World Report, Dec. 25)AND NOW WHERE? (In proportion received): "All bull markets must end, but this one is one tough steer.

NEW YORK -- Jarred at first by another sign of a strong economy, stock traders did something surprising yesterday: They bid up stock prices for the biggest rally in more than a month.By recent standards, yesterday's employment report ought to have been depressingly healthy, at least for stock and bond traders. The November unemployment rate hit a four-year low as 350,000 jobs were created, news that would normally have sent stocks and bonds falling out of fears of inflation and another move by the Federal Reserve to raise interest rates.

Last year, for the holidays, Anne finally got a computer. Shortly thereafter, she was reading a column online which talked about the historical returns of stocks and bonds, and she printed it to show her husband, Don. Don took the information to heart. Recognizing that a portfolio made up entirely of bonds and bank deposits is not likely to earn as much as a portfolio of stocks over time, he now wants to move all of the couple's liquid assets to stocks. Having reached her 70s without ever having purchased a stock mutual fund, Anne is skeptical.

After bond prices fell yesterday following June's strong durable goods report, stocks declined in moderate trading. The Dow Jones industrial average dipped 15.21 points, closing at 3,720.47. The 30-year government bond slipped 1/2 point to yield 7.60 percent, and the Treasury's 5-year note auction brought investors 6.95 percent, the note's highest return since 1991.AND NOW WHERE? August in Wall Street has historically been a moderately "up" month, rising an average 0.2 percent over the last 43 years . . . "I'm negative because interest rates will rise soon and stocks are basically overvalued.

LONDON -- The threat of war in North Korea and renewed concern that inflationary pressures are building in much of the industrialized world sparked significant declines in stock and bond prices across Europe yesterday.Government bond yields soared to their highest levels in 19 months in Germany and stocks plunged to new lows for the year in France as concerns about war and the threat of rising inflation rates led large investors to dump stocks and bonds in every European market."Korea's looking pretty dangerous," said Nick Edwards, securities salesman at Yamaichi International.