On Wall Street, Memorial Day Often Marks Beginning of Lackluster Trading Season
DEBORAH WANG, CNN ANCHOR: Markets are closed in the United States for Memorial Day. For many, it's a holiday that marks the beginning of summer. Maggie Lake joins us now for a look at what that might mean to investors -- Maggie.</s>MAGGIE LAKE, CNN CORRESPONDENT: Hi there, Deborah. When the stock market reopens tomorrow, the Dow will stand at 11,005. The Dow lost about 2 1/2 percent last week. The Nasdaq rose more than 2 percent. It's now at 2,251. Both the Nasdaq and the Dow have risen substantially since their lows hit early this spring. And analysts are starting to be more optimistic about the coming months.</s>MAGGIE LAKE, CNN FINANCIAL NEWS CORRESPONDENT: Traditionally, Memorial Day ushers in the lazy days of summer, but on Wall Street, it often marks the beginning of a lackluster trading season. With investors escaping for summer vacations, low trading volume and an absence of buyers has created a well-known saying on Wall Street: Sell in May, and go away. But this year may be different.</s>UNIDENTIFIED MALE: I think the summer's going to show a considerable amount of strength. The Fed rate cuts that took place in the beginning of the year are just beginning to kick in, and the market is a discounting mechanism. It prices in today what it expects to happen six months from now, economically.</s>LAKE: That doesn't mean it will be smooth sailing. Last summer, the Nasdaq also started off with a powerful push higher, only to see those gains evaporate. But analysts say this year investors should view any pullback as a chance to buy.</s>ALAN SKRAINKA, EDWARD JONES: Our advice, investors, really is to stay the course, look for opportunities. Don't be discouraged by the volatility in the markets. I think, looking ahead, the market and the economy will be in much better shape.</s>LAKE: That's what the bulls on Wall Street are betting on. They say there's a lot of money sitting in bonds or cash that will move back into stocks.</s>UNIDENTIFIED MALE: There's two terms in the market: don't fight the Fed, and don't fight the tape. And as we go higher, they're going to come more to fruition.</s>LAKE: Strategists predict this summer's rally will be a steady climb, rather than a runaway bull charge, but one that will present ample opportunity for investors.</s>LAKE: Among those opportunities, some strategists recommend cyclical stocks, like financials and retailers, which benefit from lower interest rates. Others say investors with a long-term perspective should look to pick up technology names while there are still bargains to be had. Well, that's the outlook for this summer. If we take a look at what we're expecting this week, on Tuesday, we are going to be keeping a close eye on Lucent's stock. Published reports say we could have an announcement as early as Tuesday, that France's Alcatel will acquire Lucent for 42 billion in stock. Alcatel has no comment on the report. We will keep a close eye on it however. And in terms of economic data, we have some consumer confidence readings from May on Tuesday. Also personal income and spending from April to give us an idea how the consumer is faring, but the big event for the week, we're going to have to wait until Friday. We've got a May employment report, and we also have a report on manufacturing from the National Association of Purchasing Managers, the NAPN. Both of those should give us an idea just how the U.S. economy is doing, especially that employment report. That will be a big one for the market. You remember last month, it was much than weaker, so people will be keeping a close eye on that one. That's how it looks. Deborah, back to you.</s>WANG: Thanks, Maggie Lake, in New York. END TO ORDER VIDEOTAPES AND TRANSCRIPTS OF CNN INTERNATIONAL PROGRAMMING, PLEASE CALL 800-CNN-NEWS OR USE THE SECURE ONLINE ORDER FROM LOCATED AT www.fdch.com