Wall Street has been jittery for two years - ever since the major indexes hit all-time highs in early 2000. But Toledo-investors and brokers believe the worst has past.
A poll of area brokers found optimism - with the average forecast at 11,500 for the yearend Dow, and some predicting it could hit 12,000 to set a record. The brokers see the Standard & Poor's 500-stock average rising 15 percent to the 1,320 range, and they envision the battered Nasdaq index getting back well over the benchmark 2,000 level this year.
“There is still a fascination with technology in the marketplace,” said Benjamin Padilla, a vice president with Salomon Smith Barney.
Many brokers believe the economy will rebound enough to give the market a boost. “I think the economy will be very strong, particularly in the second half,” said Mike Pizza, a broker with A.G. Edwards & Sons. “[Interest] rates will be very competitive. There'll be a lot of refinancing.”
After two bearish years, the market could use a lift. All major indexes are off their record highs, and 2000-2001 ended up as the worst two-year stretch since the brutal bear market of 1973-74. By the end of 2001, the Dow stood at 10,021.64, 14 percent below its 2000 peak of 11,722.98; the S&P 500 was at 1,148.09, 25 percent under its high of 1,527.46; and the Nasdaq was at 1,950.48, a stunning 61 percent off its peak of 5,048.62. And the averages continued to fall in the early weeks of 2002.
Robb Thomas, second vice president at Smith Barney, pointed out that since the early years of the Great Depression seven decades ago, “the history of the market says that there have never been three years in a row of a down stock market.”
Despite a generally nasty stock market, Toledo-area companies did very well for their shareholders. The marketbasket of 19 northwest Ohio and southeast Michigan public companies had returns (including dividends) averaging 68 percent in 2001 - compared to a negative 13 percent average in 2000 and a negative 18 percent in 1999, the first time in years the local marketbasket outperformed national indexes.
Leading the pack was Ohio Art Co. of Bryan, maker of such toys as Etch A Sketch and the Betty Spaghetty doll. Ohio Art's stock soared from $3.38 a share to $29 by year's end - for a remarkable gain of 758 percent.
Among other area stocks doing well last year were Owens Corning, up 135 percent despite the fact that it likely will not emerge from Chapter 11 bankruptcy until next year; Owens-Illinois, Inc., up 76 percent; and Health Care REIT and Cooper Tire & Rubber, both up 50 percent.