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Bear Market Longest In 60 Years
By Nick Olivari
9-28-2


NEW YORK (Reuters) - The current bear market in stocks is already the longest in 60 years, and with few investors willing to step up and buy, the likelihood is it will go a little longer, market analysts say, Worse news for some investors, the Standard & Poor's 500 index <http://www.reuters.com/quote.jhtml?ticker=.GSPC&qtype=sym&qcat=news>.GSPC is flirting with its most recent low, which makes it perilously close to making this the deepest bear market since 1938. "It's not fundamentals causing this, but an overdose of uncertainty with" the Iraq situation, said Anthony Chan, chief economist at Banc One Advisors which oversees $150 billion in assets.
 
 
With the Bush White House reviewing military options against Iraq, investors are on tenterhooks as to the timing of any action against the regime of Saddam Hussein. Any war could be costly and derail the U.S. economic recovery as oil prices rise and resources are diverted toward defeating Iraq.
 
Most investors do say that things are going to get worse before they get better. Irrespective of any U.S. campaign against Iraq, concerns about both the quantity and quality of earnings are another drag on the market.
 
 
Low stock prices "are a reflection of how negative people have become," said Lester Rich, a portfolio manager with StoneRidge Investment Partners LLC. Base in Malvern, Pa, $600 million in assets. "Corporate governance issues are still hanging over the market, and its difficult not to pick up a newspaper and read an Enron story" a year after the problems first became apparent. The energy company filed the largest bankruptcy filing to date in December, having failed as its stock plummeted amid investor unease over its opaque accounting and murky "off-balance sheet" transactions. It was the first of string of companies to announce accounting problems, prompting investors to question the accuracy of results and a backlash which finally saw company executives attest to their corporater and then get an oversold rally."
 
Also remaining optimistic despite the doom and gloom pervading the majority of shareholders, Chan said investors should be looking at the low prices on stocks as opportunities to buy given the long-term outlook for the economy and company profits are improving. Though he admitted that "investors are getting tired of the 'opportunity story'." But with little good news coming through, and more risk than reward on the horizon, investors are merely hoping that the bottom is close, if it's not already in.





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