
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, February 24, 1995                   TAG: 9502240073
SECTION: BUSINESS                    PAGE: A7   EDITION: METRO 
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE:                                 LENGTH: Medium

DOW JONES RECORD A SYMBOLIC PLATEAU

Roanoke-area market watchers share a view that the Dow Jones reaching the 4,000 plateau was more symbolic than significant. The real news is the economy's good health, they said.

"We're not a numbers freak," said George Brammer, an investment broker with A.G. Edwards Inc. in Roanoke, echoing the position of the firm's home office in St. Louis. "What's important is the underlying strength of the economy.

"It will make headlines and is significant because it's a nice round number that hasn't been reached before," Brammer said.

What's more significant than the milestone number, he said, is that interest rates don't appear to be going up again soon. He was referring to indications from Federal Reserve Chairman Alan Greenspan this week that the Fed may be ready to ease up on its policy of periodically tightening rates to fight inflation.

"The market is responding to indications the economy is healthy and inflation is under control," Brammer said.

"Is it a bellwether? No, it's not," John M. Pinkerton, Crestar professor of banking at Virginia Tech said of the breakthrough. "I'm surprised the market is up as high as it is, given all the hits it's taken from the Fed."

Some will say that 4,000 points on the Dow industrials average represents some sort of resistance level through which the market has to push and there may be some truth to that, Pinkerton said.

However, there's nothing magical about 4,000 except what people want to make of it, he said. Underlying the market's movement, he said, is the strength of the economy.

"The economy is strong. It's very strong in fact."

Pinkerton said he was not surprised that the market had passed the mark and said he had predicted it two years ago. "Like every other investor, I'm happy," he said.

The new mark is significant psychologically as are other major thresholds in the market, said J. Tyler Pugh, manager of Wheat First Butcher Singer's Roanoke office.

The Federal Reserve has given stock buyers a great deal of encouragement, Pugh said. But Pugh said he "would caution against any euphoria" just because the market goes beyond 4,000."

"When things are looking best, it may be time to step back and reassess things a little," Pugh said, admitting to contrarian tendencies. The market might be in for a little correction in the short run, he said.

by CNB