In a rut. (Wall Street)

Economist (US), The, August, 1988

WHILE economists chatter about full employment and a booming economy, Wall Street's stockmarket is stuck in a narrow trading range with low turnover. The Dow Jones industrial average has never pushed far beyond its post-crash high of 2028 reached two days after Black Monday.

This hardly suggests the new bull market that some Wall Streeters are already predicting. Nor does the post-October drop in trading volume reflect investor confidence. Activity (such as it is) is too often dominated by professional traders who invest for technical reasons-for instance, buying stocks when dividends are due-rather than because they think companies are sound long-term investments. Institutional investors are now holding large amounts of cash, and holding off buying stocks....

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