Stock Market Analysts Say Price Decline Has Further to Go

``GET Cash'' is now the name of the new game on Wall Street, as thousands of investors scramble to unload stock holdings. Last week, investors, led by many large institutional funds, closed out millions of dollars of stock holdings, driving the Dow Jones industrial average down 3.7 percent between Monday and Wednesday.

The market rallied on Friday. But most financial mavens urge continued caution, concerned about the possibility of higher interest rates during the next few months.

Investors will particularly study the latest unemployment report, due next Friday, to see if the economy is slowing - or whether inflation and higher interest rates - remain a threat to financial markets.

``The small rally that we saw,'' last Friday, ``is temporary at best,'' says Gregory Nie, chief market technician for investment house Kemper Securities Inc., Chicago. ``Cash is now looking better and better to many investors,'' who are selling marginal stocks to take advantage of higher yields from bonds, while also avoiding a possible market downturn.

``I just don't think [last week's downturn] is completely over,'' Mr. Nie says. ``There is still room'' for stock prices to fall further.

On Friday, the market, as measured by the Dow, rose 33.64 points. The Dow closed at 3,708.27 points, in an abbreviated trading session. But Friday's trading was probably ``a lull,'' says Hildegard Zagorski, an analyst with investment house Prudential Securities Inc., in New York.

``We really got battered early last week,'' she says. Typically, the market rises on the day after Thanksgiving, when trading volume tends to be light. But in terms of underlying economic fundamentals, ``nothing has really changed,'' says Ms. Zagorski. Economic growth, while slowing, remains strong; bond yields are very competitive against stocks; there is the possibility that the Federal Reserve might raise interest rates again in December or January.

``So the question,'' Zagorski says, ``is how much of a rally can there be at this time?''

``We're cautious,'' she says. ``We're telling our clients to pick stocks carefully. And we're saying that multinational companies may be the best place to be, to benefit from the global upturn.'' A number of overseas markets, including Western Europe, Latin America, and East Asia excluding Japan, have posted solid returns this year, reflecting economic expansion in those areas.

Still, not all analysts are as sanguine about overseas markets, which also generally fell last week but showed some stability by Friday.

``Global investing is a theme that is wearing thin,'' argues Robert Dickey, chief technical analyst for investment house Dain Bosworth Inc., based in Minneapolis. ``The long-established European markets are still fine, but I think there's some risk in many of the emerging market stocks. If the US market were to go into a slump, then investors would probably start pulling out of overseas markets very quickly,'' Mr. Dickey says

Still, Dickey believes that there is potential for further upside movement in the US stock market.

``We're seeing some firming [in stock prices],'' including new interest in food, pharmaceutical, and technology stocks. ``We're probably near the top of this bull market, but I don't yet see evidence of a bear market,'' that is, a protracted market downturn. Moreover, the market traditionally does very well in November, December, and January, says Dickey, predicting that should again be the pattern.