Tags: Dow | S&P | Birinyi | Adams

Experts: Stock Market Has Fuel to Fly Higher

By Dan Weil   |   Wednesday, 08 May 2013 12:16 PM

Both the Standard & Poor's 500 Index and Dow Jones Industrial Average closed at record highs Tuesday, and many experts see room for further gains.

The Dow Jones Industrial Average closed at 15,056.20, its first finish above 15,000.

"From the perspective that every round number we hit has people coming into stocks, it probably drags people sitting on the sidelines to consider the equity market as an investment," Gina Martin Adams, an institutional equity strategist at Wells Fargo Securities, told CNBC.

Editor's Note:
See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

"But as for fundamental analysis, it's meaningless. It's psychological."

The S&P 500 closed the day at 1,625.96.

"The things that we look at still look good. We think [the Dow rising above 15,000] is just another step," Laszlo Birinyi, president of money manager Birinyi Associates, told CNBC.

"The more critical step was [1,600] on the S&P. I raised my target. I can see the market going to 1,900, but I think it's in a series of steps. The next step is 1,700."

So what about the old adage "Sell in May and go away?"

"Those things work until they don't work," Birinyi said. "I still don't see those things that would really trouble me. It's orderly. It's somewhat rational, and it is still muted."

Adams noted that this is the week in May when the negative forces usually take over.

"It's a fascinating start to the month of May. At least so far, it's included a cyclical rotation into riskier asset classes. In a lot of ways, it's a reverse of March and April, but I don't want to get too carried away," she said.

Given that earnings are sluggish, the long-term outlook for stocks isn't as strong, but that sluggishness is being ignored for now, Adams explained.

"You can argue there's any number of reasons [buyers are] getting dragged in. It's not earnings growth," she added.

"We've been in this market where even the slightest bit of decline is met with a bounce right back up. That just shows there are still people waiting to get into equities," Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, N.Y., told Reuters.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

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