Fund managers were happy to ride this morning's rally, but most were cautious about predicting that it could last.
While today's better-than-expected
figures underpinned the rally, investors still have their eye on looming inflation figures -- the May
Consumer Price Index
will be released in mid-June -- and the question of whether the
Fed will continue to raise interest rates still hangs over the market, said John Jares, who manages the $700 million
Delaware Balanced Fund
"Certainly there's a big sigh of relief with today's unemployment numbers," he said. "Job growth was weaker than people were expecting." Unemployment was higher than most Wall Streeters had predicted, rising to 4.1%. Low unemployment tends to spook investors by raising the specter of inflation and, in turn, further interest-rate hikes to cool the economy.
"It's nice to have this rally, but it will take a while to undo the psychological damage that
Greenspan has caused," said Robert Loest, who manages about $500 million in assets in two funds, the
IPS Millennium Fund
IPS New Frontier Fund
, referring to recent interest-rate hikes by the Federal Reserve.
Jares, however, said, "I wouldn't contend that the Fed is done, but we are closer to the end than we thought." Jares is deep in tech and financials, mentioning
Bank of New York
as his favorites.
Loest, who said he ignores Fed actions since he is a buy-and-hold investor, said he is loading up on tech stocks, such as chipmakers
Skip Wells, a portfolio manager at
Adams Harkness & Hill
in Boston, declined to say what he was buying but did mention
as two favorites.
"You can buy them all," he said. "I think this
rally is for real. My opinion is that Greenspan and the bears will go into hibernation and we won't have to worry about interest rates."
Dow was up 129 to 10,781, while the
Nasdaq Composite was up 187 to 3769.