Elusive recovery keeps stock indexes on hold

摘要

From go-go to so-so years, it's been a rough transition for U.S. stock indexes. Although history indicates a third straight down year is unlikely, it also suggests gains could be limited for several years to come. Much will depend on the timing and extent of economic recovery and investor confidence. If history is any guide, 2002 should be a positive year for stock indexes. But that same history makes it quite unlikely that the stock market will return to the boom years of the late 1990s or exceed the early 2000 highs any time soon (see "Historical tidbits," right). In fact, reversion to the mean theory suggests that investors may be in for a few years of relatively dull, mundane performance, a view that seems to match the consensus of many analysts who are looking for the bellwether S&P 500 index to stay well within the boundaries formed by the January 2000 all-time high at 1553 and the September 2001 low at 945 (see "Riding the range," right). Some even narrow that range to the May 2001 high at 1316 and the March 2001 low at 1081, although the lower end of that range has already been penetrated this year.