Today's Market Update with...

Harvey Katz, Value Line's Managing Editor

The Dow Jones Industrial Average ascended the 10,000 mark yesterday in a buying frenzy that carried that 30-stock index up 145 points. It was the first time in a year that the Dow had traded above 10,000.

We have been forecasting just such an event for weeks now, as somewhat better economic news and markedly improved earnings have combimed to push stocks strongly higher. The market has been in a furious ascent for seven months now and, to date, there appears no end to this upturn in sight.

That said, we again caution that stocks are rising rapidly and the market is getting richer by the day. P/E ratios are very frothy and may not now be supported by earnings. That is not a happy combination. As such, we believe that some serious profit taking, at the least, may be forthcoming at some point.

As for the economy, retail sales did better than expected in September, according to data issued yesterday. Tomorrow, meantime, we'll get a look at both industrial production and factory use in September. Flattish results are expected.

As for earnings, they have been positive for the most part, headlined by solid performances from Abbott Labs, Johnson & Johnson, JP Morgan Chase and Intel. Goldman Sachs will be a featured company reporting today.

Finally, after yesterday's fireworks, the equity market futures are indicating a lower opening for this morning when trading commences in a bit less than an hour from now. We note the bull's resilience, though, so we may get a mid-morning bounce as the market may try to climb still higher. Stay tuned.