INVESTORS UNFAZED BY SEESAW MARKET

It's up. It's down. It's up. But during Friday's stock market drop and Monday's rebound, local investors hung tough, investment counselors say.

The good news that more than 700,000 new jobs had been created triggered a sell-off Friday because more jobs mean interest rates -- which drive the bond market -- probably won't be cut.

Higher interest rates mean corporations paying off loans make less profit. They also make stocks a less attractive investment option than bonds, said David Beasley, an investment representative for Edward D. Jones and Co.

People are looking for the best return on their money, he said, pointing out there's been "a flow of funds out of banks" and into the stock market in recent years.

Kevin Stewart of Robert Thomas Securities called Friday's reaction "one of those really almost perverse ways the market deals with news."

Overall, the news of job growth and strong employment was good for the economy. But anything that seems to create competition for either stocks or bonds can shake up the market, he said.

"Whether it really means anything for the long-term remains to be seen," he said.

Rick Bandermann, an investment officer for Boatmen's Investments in Cape Girardeau, said he got "a lot of calls" from clients concerned about Friday's 171.24-point drop in the Dow Jones industrial average.

"I encouraged them to hang in there," Bandermann said.

Beasley said he only got one call.

"Our customers are more in the conservative, long-term, buy and hold commodities," Beasley said. "We're not really in the trader market."

Old-timers who have learned a thing or two about playing the market over the years weren't fazed by Friday's drop or Monday's 110.55-point gain, said Donna Domian, an investment representative for Edward D. Jones and Co.

Domian said some people recalled the crash of 1987, when the market fell 108 points on Oct. 16 and another 508 points on Oct. 19, but it's important to keep things in perspective.

"For the market to be where it was in '87, it would have to be at 8,000, and we're a long way from that," she said. "My older clients who remember 1929 and the '30s are all telling me, Girl, this is nothing."

Investment counselors advise their clients to look at the long-term picture when investing in the stock market, and the ups and downs of the last few days only reinforce that message, Domian said.

"It's important to put this in perspective," she said.

Friday's tumble may have been the third-biggest drop in terms of points in the history of the Dow Jones, Domian said, "but it does not even make the top hundred drop in terms of percentages. It only dropped 3-some percent in terms of overall volume."

Steve Elefson, branch manager for Investment Management and Research, Inc., in Jackson, said his clients were pretty calm during Friday's downslide.

"It's something that you don't worry too much about after you become accustomed to the market," Elefson said. "You don't want to react short-term. The key to being successful is not to let the short-term sway you."

Monday's rebound, the third-largest jump in the market's history, was partially fueled by investors looking for a bargain, Stewart said, adding that most of the calls he got were from people wanting to know what to buy.

"The message out there is, It's a big opportunity to take advantage of, which long-term causes me a little concern," he said.

Stewart pointed out that technology issues led the market in growth both Friday and Monday, which is a good sign for the market overall.

But it might be time for "a good old-fashioned cleansing" of the market to get fundamental values back in line, he said.

"We've gone five years without even having had a 10 percent correction," he said. "I really think we need to see that. Was Friday the beginning of it? I don't know."

Domian said Friday's drop "almost triggered" a close-down on the exchange. Since 1987's crash, federal regulations require the exchange to shut down for an hour after a drop of 250 points or more.

What happened Friday is no indication that the stock market is no longer viable, she said.

"I'm still cautiously optimistic about the market for the long term, the next five years," she said.

There's "plenty of room" for growth, Bandermann said.

"People think the market's so high, and they just think there's some magic number and if the market's so high, it can't get any higher," he said.

There is a "kind of skittishness" on the market,," she says, but adds, investors "kind of overreacted on Friday. Overall, the fundamentals are still quite good."