Oil Could Slip Up Stock Gains
After breaking investors' hearts for years, oil stocks finally are leading the market. The question is whether they can recruit many followers.
Stocks of energy companies surged last year on rising oil prices. They have jumped more this year, as the rest of the market has stumbled. On Friday, reflecting the stocks' price gains, Exxon Mobil Corp. surpassed General Electric Co. as the world's largest stock, based on total market value. Since the start of 2004, Exxon's market value has risen more than $118 billion, to about $383 billion, compared with about $379 billion for GE.
But oil stocks' joy is based on something distinctly unjoyful for many other stocks: rising oil prices. The best-known period of strength for oil stocks came in the 1970s, when they became the single biggest sector in the Standard & Poor's 500-stock index. Yet high oil prices and inflation during that period were disastrous for other stocks. Indexes gyrated up and down without making lasting gains for more than a decade.
"This could be the start of a major secular move for oil stocks," says Brian Pears, head stock trader at Victory Capital Management, the money-management arm of KeyCorp in Cleveland. However, "in the transition period, stocks in general are likely to suffer."
That certainly has been the case lately. The stock market languished for much of last year, amid worries about soaring oil prices. Stocks didn't get going until October, around the time oil prices peaked and fell sharply.
Last week, with oil pushing back above $48 a barrel, the Dow Jones Industrial Average was slightly down. It fell 10.79 points, about 0.1%, to 10785.22, despite a gain of 30.96 points on Friday ahead of the holiday yesterday. (The Dow is barely in the black so far in 2005, up 2.21 points.)
Many investors think the oil-stock rally may be almost over. They think oil prices are due to sag back toward $35 this year as economic growth cools down -- good news for the rest of the market but bad for oil stocks.
The expectation can be seen in analysts' profit projections. Exxon's profit rose more than 50% during the past year. The consensus view among analysts, according to Thomson First Call, is for it to rise at about half that rate in the current quarter. Analysts then expect profit to soften and actually show a decline for the full year, which would be bad news both for Exxon's stock price and for its perch atop the list of the biggest stocks.
That means it may be a bit late to jump into oil stocks, says John Waterman, chief investment officer at Rittenhouse Asset Management in Radnor, Pa., an arm of financial-services group Nuveen Investments.
"If oil prices stay high, in the $45-$50 range, marginal sources will come on and alternative energy sources will kick in," he says. That would drive oil prices down. And because oil profits now are high, it becomes mathematically more difficult to turn in big gains in percentage terms.
If oil prices confound expectations and keep moving higher, Mr. Waterman adds, it very well could reflect inflationary strains on the system that hurt profits in other companies. Expecting a difficult market this year, Mr. Waterman is focusing on "defensive" stocks such as health-care and consumer concerns.
But some oil-stock fans, who suffered as the stocks languished in past years, think the good days could last longer than people think -- and for a wider variety of stocks than people expect.
The reason is that rising oil prices are being caused by different pressures than in the 1970s, says Henry Herrmann, chief investment officer at mutual-fund group Waddell & Reed in Overland Park, Kan.
At that time, the price gains came from sudden price boosts by producing countries, which hurt growth. Today, the stimulus is a vibrant world economy, driven by emerging economies such as China's. China uses oil, together with cheap labor, to produce inexpensive products that are used by Western economies. That means higher oil prices don't have to cause the same kind of inflation they caused in the 1970s, and might not stifle economic growth.
"This is different than the 1970s," Mr. Herrmann says. "We could have a situation where the price of oil could continue to move ahead at a moderate pace without doing substantial damage to the economy." In that scenario, a variety of stocks other than energy stocks also could prosper.
The ability of other stocks to join in the advance, he says, depends on the idea that gains in oil prices would continue to be moderate, not sudden and disruptive.
So far, despite their recent surge, oil stocks haven't done nearly as well as oil prices. Since late 1998, crude oil has more than quadrupled in price from just over $11 a barrel to $48.35 at Friday's close on the New York Mercantile Exchange. Exxon, the industry leader, actually saw its stock decline in price from late 1998 until late 2003. It was only last year that Exxon finally took off. It has risen 45% since 2004 began, including a 16% gain in less than two months this year. Overall, the stocks in the Dow Jones Oil & Gas index have risen by a similar amount.
If China and other developing countries manage to sustain their growth, Mr. Herrmann says, he sees growth not only in energy-related stocks, but also in industrial stocks, materials stocks and other stocks related to infrastructure creation.
"There was a lot of concern that China would have a serious slowdown, a hard landing," Mr. Herrmann says. "That created serious concern that the price of energy would contract. But there is no sign of a landing at all there," which means that China's need for oil keeps rising.
Right now, he says, oil companies represent something like 7% of the value of the S&P 500, almost double what they were before they started to rise, but only about one-quarter of what they were in the 1970s. If China keeps growing, he suggests, the share of oil stocks in the S&P 500 may continue to rise as well.
Friday's Market Activity
Merck rose $3.76, or 13%, to $32.61, a move that lifted the drug maker's market value by more than $8 billion to about $72 billion. A Food and Drug Administration panel narrowly recommended that Merck's withdrawn painkiller Vioxx be allowed to return to the U.S. market if the drug carries a stern "black box" warning of an increased risk of heart attacks and strokes.
Pfizer climbed 1.74, or 6.9%, to 26.80 in heavy trading, and added about $13 billion to its market value, which now stands at roughly $202 billion. The gains came after an FDA panel said Pfizer's Celebrex and Bextra painkiller drugs should stay on the market.
SLM, commonly known as Sallie Mae, a student-loan financing company, shed 1.76, or 3.5%, to 47.92. The decline came in the wake of J.P. Morgan Chase's announcement that it has asked a Delaware court to dissolve a student-loan joint venture.
Exxon Mobil rose 1.28, or 2.2%, to 59.41.
Fannie Mae fell 1.71, or 2.8%, to 58.90, and Freddie Mac lost 2.17, or 3.4%, to 61.73. Federal Reserve Chairman Alan Greenspan on Thursday called for severe reductions in the mortgage holdings of the companies, which are the nation's two biggest providers of funds for home loans.
May Department Stores rose 1.93, or 6.1%, to 33.45, and Federated Department Stores fell 65 cents, or 1.1%, to 56.72. Federated has resumed takeover talks with rival May and the discussions are reaching a more-serious stage, The Wall Street Journal reported Friday.
New York Times lost 1.05, or 2.8%, to 37.20. The newspaper publisher said it is buying community portal About.com from magazine conglomerate Primedia for $410 million.
表面风平浪静 实则暗流汹涌
上周收平的股市给人以一种平静的感觉，但就如同海洋的卫星照片一样，平静的表面之下往往隐藏著轩然大波。
总的来说，上周市场走势平稳，主要股指基本收平。但与这种平静形成鲜明对比的是几个重要的分类指数呈现出剧烈的波动。
上周，道琼斯工业平均价格指数下跌仅10点，至10,785点，跌幅0.1%；标准普尔500指数下跌接近4点，至1201点，跌幅0.3%；那斯达克综合指数跌18点，收于2058点，跌幅0.9%。
没错，走势相当沉闷。但如果你持有大量银行或经纪公司的股票，那情况就截然不同了。由于债券市场掀起了抛售的狂潮，银行和经纪类股的跌幅均超过了3%。
联邦储备委员会主席格林斯潘(Alan Greenspan)暗示短期利率将继续攀升，并直言不讳地表示他对长期利率仍在低位徘徊感到不解。这番讲话导致10年期美国国债的收益率从4.09%陡然升至4.26%。上周五公布的核心生产者价格指数飙升使得债券市场上的抛售风潮愈演愈烈。就国债市场而言，上周的走势确实是相当动荡。
此外，如果你持有大量石油及制药类股也会有心跳的感觉。这两类股票上周均大幅攀升。石油股票分类指数上周上涨了3.9%，头号功臣当属埃克森美孚(ExxonMobil)。该股大涨了6%，不但创下历史新高，而且还以3,830亿美元的市值压倒了通用电气(General Electric)，成为市值最大的股票。
大型石油类股的飙升表明它们正受到资金不断膨胀的机构投资者的青睐，专业投资者持有的石油类股权重普遍不足，他们往往持有的是少数几只超大型石油股票。技术派分析师会提醒说，短线来看能源类股正处于超买状态，但他们同时还会补上一句：真正的牛市行情有时候不能以常态而论之。
受益于良好的消息面，制药类股上周五同样飙升。这表明制药类股的监管及诉讼前景令投资者稍感宽心。美国食品和药物管理局(Food and Drug Administration, 简称FDA)的专家小组建议批准默克已撤出市场的止痛药万络(Vioxx)在加注警告后重返美国市场，并允许辉瑞(Pfizer)的同种药物西乐葆(Celebrex)继续销售。
对于那些希望听到制药类股再次成为避风港湾的投资者来说这显然是一条宽慰人心的消息。过去一年来，在经历了连续几轮的飙升行情之后，制药类股的走势比标准普尔500指数的表现强出15个百分点。的确，如果今后有关大型制药公司的消息仍不像预料的那样糟糕，那么投资者对稳定表现的渴望以及丰厚的派息率很有可能对他们的股价形成支撑。
如果这一幕真的上演，那么其他医疗保健类股就有可能受到这种资金流向转变的冲击。从安泰保险公司(Aetna)和Wellpoint两只股票急剧上涨的行情来看，为了规避制药类股的风险，基金经理人一直是把医疗保健投资组合的主要资金都分配给了医疗保健组织(HMO)类股。
当然，个股和类股的走势与指数总是有些出入，但上周资金流向转变的势头却是触目惊心的。
问题是这种资金流向的转变意味著什么。
无须对过去几天的走势作过多的推论就可以看出金融类股的回调──如果这种趋势持续下去的话──以及科技股走势的持续疲软很有可能给主要股指带来打击。原因在于这两类股票在各主要股指中起著重要作用，例如，他们在标准普尔500指数市值中的比重超过35%。
而能源类股的比重只有8%，而原材料、公用事业等近期走势强劲的其他类股所占之比重仅为6%。他们不会对大盘的走势产生举足轻重的影响。
这就印证了这样一个观点：我们目前正处于一个趋于成熟、上涨空间不断缩小的牛市行情中，在本轮牛市行情中各个行业的股票不一定还会像前两年的牛市行情一样呈现出普遍上扬的景象。
此外，上周债市大跌并未给股市造成重大伤害这个事实预计将令看涨人士下周更加勇往直前。本周三公布的消费者价格指数如果走势温和也将缓解股市交易员的心头大患──由Fed引发的担心。
毕竟，市场距离新高只有2%的差距，而且看起来看涨交易员在近期之内还会将大市进一步推高。
