By Bernard Condon, AP Business Writer
NEW YORK (AP) — If you're confused about the outlook for the economy and stocks one year after the market hit bottom, then you've got good company — the Wall Street economists and strategists who are supposed to have this all figured out.
Rarely have the experts seemed so divided about the future.
We're either beginning the type of robust recovery that typically follows a deep recession, or we're on the cusp of another contraction, the dreaded double dip. Prices could climb fast as they did in the U.S. during the 1970s, or fall to devastating effect as they did in Japan during the 1990s.
Stocks? We're on the verge of a long bull market a la the 1980s. Then again, maybe not. To hear some tell it, the present is more like the 1930s, when stocks were viewed less as vehicles to riches and more as a boring source of dividends.
The collapse we feared last March 9 when the major stock indices fell to their lowest levels since 1997 never did come to pass. But what replaced it is still unnerving — bewilderment.The Dow Jones industrial average returned 61% during the past year, up 4,019 points to 10,566.20. The Standard & Poor's 500 returned 68%. The Nasdaq Stock Market did even better, surging 81%. Those gains were largely a payoff on a correct bet that corporate profits would surge from their recession lows.
This year the Dow and S&P 500 have lost momentum, rising 1% or less. And the Dow is still 25% off its all time high of 14,164.53 set in October 2007.
Part of the problem in predicting the future lately is that the economic signals that drive the market have been so mixed.
The nation's gross domestic product grew at a 5.9% annual rate in last year's final quarter, its best showing in six years. But it's expected to expand at a slower rate this year.