By Clyde Noel

Stock Report

Investors had a lot to worry about last week with a weakening economy, dismal corporate earnings and the beginning of military reversals in Afghanistan. But even with these worries, the stock market managed to post some healthy gains.

As a long term investor, there is more of a risk in being out of the market than being in the market. For the week, the Dow Jones industrial average added 240 points or 3.7 percent. The Nasdaq added 104 points for a 5.8 percent gain.

The Town Crier index had a good week adding 6.71 percent, but it still lost $13,430 on a $50,000 investment of 50 stocks Jan. 1. Daily volume for tech stocks is beginning to improve as 40 of the 50 in the Town Crier index increased value last week.

This week, investors may shed some tears over market volatility. The event driven market can turn on a dime.

October unemployment, manufacturing production and third-quarter economic growth stats will be released this week. Other U.S. economic data set to be released include reports on consumer confidence, first-time unemployment benefit claims, personal income, car sales and factory orders. Analysts warn the figures on these key reports will not be pretty.

With layoffs and unemployment, the most closely watched U.S. economic indicator will be the employment report. The report out Friday will reveal effects of the terrorist attack on the job market since Sept. 11.

Since Wall Street looks six months to a year ahead, many pros are buying now in anticipation of a recovery. They are buying defensive stocks such as health care, food, consumer staples and utilities. If there’s any disappointment in the economy, defensive stocks are where you want to be.

Bullish investors take the view this year’s earnings should be written off and look for an optimistic profit rebound in 2002 for battered sectors like tech and heavy industry.

Now is the time to be aggressive in the market if you believe an earnings revival is certain next year. Standard & Poor’s present asset allocation is 60 percent stocks, 25 percent bonds and 15 percent cash.

I still like Intel, the world’s premier semiconductor maker. Expect upgrades from various analysts because of Microsoft’s Windows XP and continued business use of Windows 2000. The demand for Intel’s Pentium 4 chip exceeded its most aggressive estimates in the third quarter.

Noel, a seasoned investor, covers the stock market for the Town Crier.