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The Street and the new year

Previous records for both the Dow Jones and the Nasdaq are being shattered as the new year kicks off, and analysts say the fireworks are just beginning.

Dow 10,000 is in the cross hairs.

With the new year, the market saw previous records for both the Dow Jones Industrial Average and the Nasdaq Composite Index shattered yesterday.

The blue chip index climbed higher than 9,500 for the first time in history, rising 2.51 percent or 233.78 points to close at 9,544.97, surpassing its previous record close of 9,374.27 reached on November 23 of last year. The Nasdaq also hit an all-time high, gaining 3.08 percent or 69.35 points to reach 2,320.62.

Despite today's mixed market, analysts and traders speculate that yesterday's activity marks just the beginning of the fireworks.

The Dow was down 0.7 percent or 66.42 points to 9,478.55 today, while the Nasdaq remained flat at about 2,321.20.

"I think the Dow will go through 10,000 like a hot knife through butter," said David Holzer, managing director of trading at Brean Murray & Company.

Other analysts cautioned, however, that there are some seasonal factors at work driving the market, as pension funds and 401Ks typically invest heavily at the beginning of the year.

Historically, though, as long as interest rates remain low, the markets climb higher, analysts pointed out.

"There are always a few bumps along the way," said Holzer. "But taking a broad view, as long as the rates are low and go lower, as I suspect they will, the market is going to go higher."

Technology stocks are especially likely to continue driving the upward momentum.

In her report titled "Internet/PC Software Industry Outlook for 1999," Morgan Stanley Dean Witter's Mary Meeker noted that 1998 was a superb year and 1999 still has some fire-power left.

"It can't get better than this, but it can still be pretty good," Meeker, who was ranked as the No. 1 Internet/New Media analyst and the No. 3 PC software analyst in a 1998 Institutional Investor survey, wrote. Her forecast for 1999 in these sectors: outperform.

"I suspect we will see the 10,000 level within a month--maybe sooner than people think," concluded Holzer.