A Gilt-Edged Year for the Stock Market

THE first definitive year-end report card on the economy--the stock market average on the final day of trading --was cause for solid optimism on the part of investors. Last week the Dow Jones Industrial Average closed at 1020 --up 130 points for the year, a remarkable gain of 15%.

Most Wall Street analysts are convinced that the market will continue to climb smartly in 1973. Brokers looking for a marked increase in trading volume see signs that small investors are beginning to overcome fears instilled by the Wall Street slide of 1970 and return to the market. Investment from abroad is also on the rise. Economist Alan Greenspan estimates that foreigners put $1.6 billion into American securities last year and will buy $3 billion worth in 1973.

The biggest gainers are expected to be cyclical issues, the stocks that react most directly to swings in the economy. For example, the projected spending burst for capital improvements should burnish the allure of heavy equipment and machine-tool issues. Business inventory accumulation, which is just now beginning in earnest, should brighten prospects for copper, aluminum, steel, chemical and paper stocks. Among the categories expected to lag in 1973 are food stocks, which analysts believe are already fully valued, still-limping aerospace stocks and many speculative issues. For a broad range of stocks, however, 1973 is shaping up as a gilt-edged year.

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