Ready Cash Could Reward Wall Street Bulls


By Kenneth Barry NEW YORK (Reuters) - Stocks have gained little headway this year but could get a lift over the next couple months from an infusion of cash poised to come into the market from corporations and individuals, Wall Street experts say. This year the Dow Jones industrial average has risen less than 1 percent. The Standard & Poor's 500 and Nasdaq Composite indexes have fared slightly better, advancing about 6 percent and 5 percent, respectively. That's quite a comedown from last year's pulse-quickening rises of 25 percent for the Dow, 26 percent for the S&P 500 and 50 percent for the Nasdaq. Much of the gains have come late in the year and if conditions are right, the indexes could add another 3, 4 or 5 percentage points before Dec. 31, said Philip Dow, director of equity strategy at RBC Dain Rauscher. "I wouldn't be surprised to see more strength this year," Dow said. MONEY COULD SHIFT INTO STOCKS Some of the nearly $2 trillion in money market funds could be shifted into stocks if October's pattern is followed, the experts say. Stock mutual funds added a net $15.4 billion, up about $5 billion from September, according to fund research firm Lipper Inc. Much of it came from money market funds that have low returns tied to extraordinarily low short-term interest rates, Other treasure chests that could lift stocks include companies rewarding their shareholders, corporations paying cash to acquire other companies and fatter paychecks for American workers who invest in stocks. The potential for a pool of cash to enrich the stock market is likely to extend into January when many individual workers top up their 401(k) retirement accounts, experts say. Beginning a week before the presidential election, stocks rallied, and experts credited a pause in the rise of oil prices and approaching end to doubts about the presidential election, followed by President Bush's victory at the polls. EXCHANGE VOLUME RISES     Continued ...
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