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CONTACT: GEORGE McCRORY
100 Old Public Library
Iowa City IA 52242
(319) 384-0012; fax (319) 384-0024
e-mail: george-mccrory@uiowa.edu

Release: March 12, 1999

 

MEDIA ADVISORY

UI SOURCES:

DOW 10,000

Reporters and editors looking for commentary on the Dow Jones industrial average approaching 10,000 may contact the following University of Iowa experts:

Timothy Loughran, associate professor of finance and an expert on stock market trading, can be reached at (319) 335-0882.

"It's all psychological ­ Dow 10,000 is just a number. But we're in a strong economy with unemployment just slightly up, which means inflation is not going to be a big problem. Another factor is that companies such as Dell and Cisco are exceptionally profitable and are actually growing," he said.

John Solow, associate professor of economics, and expert in economics of natural resources, can be reached at (319) 335-0845. Although oil stocks have risen in the short term, Solow said OPEC's decision to cut oil production and increase oil prices might have a negative long-term impact on the markets.

"It's good for the Dow in the short run, but it could be bad for some companies in the long term. In general, the higher prices from the oil companies make the cost of operating other things higher," Solow said. However, he said some OPEC members also have incentives to cheat on production agreements because they need revenue, and that non-OPEC members such as Great Britain and Norway can also influence worldwide oil supplies.

Beth Ingram, associate professor of economics and director of the UI Institute for Economic Research, can be reached at (319) 335-0897. She says Dow 10,000 won't have much impact on the local economy. "What's going on in the farm sector doesn't indicate much slowdown in Iowa ­ we're just not showing it in the data. Economic activity may be shifting away from the ag sector," Ingram said. More data about the state of Iowa's economy will be in the Institute's Iowa Economic Forecast, which will be released later this month.