Nov. 29, 2006, 2:17 p.m. EST

T. Rowe Price pundits eye soft landing

Big cap, growth stocks could return

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    T Rowe Price Blue Chip Growth Fund (TRBCX)
  • X
    S&P 500 Index (SPX)
  • X
    T. Rowe Price Group Inc. (TROW)

or Cancel Already have a watchlist? Log In

By Steve Gelsi, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market heads into 2007 on sure footing with a possible return of the big-cap growth stocks in store for the year amid an overall soft landing in the economy, pundits at T. Rowe Price said Wednesday.

Larry Puglia, manager of the T. Rowe Price Blue Chip Growth Fund /zigman2/quotes/208533233/realtime TRBCX +1.31% said U.S. equities are inexpensive relative to bonds and that the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.06% is trading at a discount to historical valuations.

While value stocks have been outperforming growth stocks for years, he said the out-of-favor sector "could be an opportunity" in 2007.

Long-term themes favored at T. Rowe Price /zigman2/quotes/203200152/composite TROW -0.02% , which manages about $308 billion, include some tech investments, biotech firms, "globally dominant and acquisitive mega cap firm," financial asset managers and "world class" manufacturers, Puglia said.

Puglia praised Google /zigman2/quotes/205453964/composite GOOG +0.43% , Adobe /zigman2/quotes/200389143/composite ADBE -0.31% Apple /zigman2/quotes/202934861/composite AAPL +0.46% and Cisco /zigman2/quotes/209509471/composite CSCO -2.17% as well as Genentech , General Electric /zigman2/quotes/208495069/composite GE +1.29% .

He also eyed shares of Procter & Gamble /zigman2/quotes/202894679/composite PG -0.46% , State Street /zigman2/quotes/209758976/composite STT +1.17% , UBS /zigman2/quotes/206172872/composite UBS +0.84% , Danaher /zigman2/quotes/210555154/composite DHR -0.32% , Illinois Tool Works /zigman2/quotes/208031922/composite ITW +0.08% and General Dynamics /zigman2/quotes/208560027/composite GD +0.69% .

Alan Levenson, chief economist of T. Rowe Price, said the U.S. is in the midst of a soft landing that began in the middle of 2006.

Macro economic trends in the coming year include slower productivity, a tighter labor market, and increased caution by large companies to hire and invest in capital spending.

Unlike some on Wall Street who are hoping for an interest rate cut by the Federal Reserve, Levenson said the central bank could instead raise rates to keep the economy from overheating.

He said that while the housing correction still has a little further to go, but that consumer spending will not be greatly impacted by it.

Also appearing at the company's 2007 Investment and Economic Outlook were Kris Jenner, manager of T. Rowe Price Health Sciences Fund and vice presidents Raymond Mills and Mary Miller.

/zigman2/quotes/208533233/realtime
US : U.S.: Nasdaq
$ 132.64
+1.71 +1.31%
Volume: 0.00
May 29, 2020
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,042.51
-1.80 -0.06%
Volume: 228.64M
June 1, 2020 9:44a
loading...
/zigman2/quotes/203200152/composite
US : U.S.: Nasdaq
$ 120.88
-0.02 -0.02%
Volume: 26,331
June 1, 2020 9:43a
P/E Ratio
15.06
Dividend Yield
2.98%
Market Cap
$27.51 billion
Rev. per Employee
$765,110
loading...
/zigman2/quotes/205453964/composite
US : U.S.: Nasdaq
$ 1,435.04
+6.12 +0.43%
Volume: 54,278
June 1, 2020 9:44a
P/E Ratio
28.83
Dividend Yield
N/A
Market Cap
$769.02 billion
Rev. per Employee
$1.39M
loading...
/zigman2/quotes/200389143/composite
US : U.S.: Nasdaq
$ 385.41
-1.19 -0.31%
Volume: 100,633
June 1, 2020 9:44a
P/E Ratio
58.53
Dividend Yield
N/A
Market Cap
$186.26 billion
Rev. per Employee
$445,024
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 319.39
+1.45 +0.46%
Volume: 1.37M
June 1, 2020 9:44a
P/E Ratio
24.91
Dividend Yield
1.03%
Market Cap
$1378.06 billion
Rev. per Employee
$1.98M
loading...
/zigman2/quotes/209509471/composite
US : U.S.: Nasdaq
$ 46.78
-1.04 -2.17%
Volume: 1.22M
June 1, 2020 9:44a
P/E Ratio
18.98
Dividend Yield
3.01%
Market Cap
$202.80 billion
Rev. per Employee
$684,933
loading...
/zigman2/quotes/208495069/composite
US : U.S.: NYSE
$ 6.66
+0.09 +1.29%
Volume: 3.44M
June 1, 2020 9:44a
P/E Ratio
9.89
Dividend Yield
0.61%
Market Cap
$57.47 billion
Rev. per Employee
$429,735
loading...
/zigman2/quotes/202894679/composite
US : U.S.: NYSE
$ 115.39
-0.53 -0.46%
Volume: 63,391
June 1, 2020 9:44a
P/E Ratio
65.51
Dividend Yield
2.73%
Market Cap
$286.98 billion
Rev. per Employee
$727,304
loading...
/zigman2/quotes/209758976/composite
US : U.S.: NYSE
$ 61.68
+0.71 +1.17%
Volume: 47,824
June 1, 2020 9:44a
P/E Ratio
10.49
Dividend Yield
3.41%
Market Cap
$21.46 billion
Rev. per Employee
$305,416
loading...
/zigman2/quotes/206172872/composite
US : U.S.: NYSE
$ 10.79
+0.09 +0.84%
Volume: 34,869
June 1, 2020 9:44a
P/E Ratio
8.44
Dividend Yield
1.70%
Market Cap
$38.35 billion
Rev. per Employee
$703,264
loading...
/zigman2/quotes/210555154/composite
US : U.S.: NYSE
$ 166.08
-0.53 -0.32%
Volume: 38,583
June 1, 2020 9:44a
P/E Ratio
44.07
Dividend Yield
0.43%
Market Cap
$117.80 billion
Rev. per Employee
$280,183
loading...
/zigman2/quotes/208031922/composite
US : U.S.: NYSE
$ 172.59
+0.13 +0.08%
Volume: 14,480
June 1, 2020 9:44a
P/E Ratio
22.40
Dividend Yield
2.48%
Market Cap
$54.49 billion
Rev. per Employee
$307,667
loading...
/zigman2/quotes/208560027/composite
US : U.S.: NYSE
$ 147.84
+1.01 +0.69%
Volume: 13,410
June 1, 2020 9:44a
P/E Ratio
12.39
Dividend Yield
3.00%
Market Cap
$42.12 billion
Rev. per Employee
$342,737
loading...

Steve Gelsi is a reporter for MarketWatch in New York.

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.