Capital Gazette wins special Pulitzer Prize citation for coverage of newsroom shooting that killed five

Indexes' success in January might be barometer for year


With the S&P; 500 stock index up 4.1 percent last month -- and the Dow Jones industrial average ahead 1.9 percent and the Nasdaq composite up a hefty 14.2 percent -- the "January Barometer" offers an optimistic outlook for the year.

The 1999 Stock Trader's Almanac says, "Since 1950 the January Barometer predicted the annual market direction with amazing accuracy. Whether the S&P; 500 index was up or down in January, 43 out of 48 times the entire year followed suit -- a 90 percent batting average!"

"Utility stocks now look better than ever," says Mutual Fund News Service. "Until recently utilities' rates of return were limited, so utility managers didn't build stockholders' value. But since deregulation now spurs competition, utilities look for ways to cut costs, consolidate to become more efficient and specialize in areas of their greatest strength."

Tempted to buy high-flying Internet stocks? Not so fast. "U.S. Internet shares will fall sharply," says the Economist. "Today's pioneering Internet companies are unlikely ever to earn the vast profits needed to justify current prices.

"This freefall could happen with brutal rapidity. Thin Internet markets exaggerate declines as well as advances. On-line brokerages may not handle large volumes. Suddenly, hedge funds could start selling. As losses mount and buyers disappear, inexperienced investors might panic. Their screams could frighten investors everywhere."

Pub Date: 2/05/99

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