At Half Time, Score Looks Good (Editorial)

The year is now half over, and to the surprise of many, the markets turned in a good first half — the best in several years.

The Standard and Poor’s 500-stock index turned in its best quarter since 1998. The index was up 14.8 percent for the second quarter of 2003. For the first half of the year, it’s up 10.8 percent.

The Dow Jones industrial average, up 12.4 percent for the quarter, is up 7.7 percent for the half.

The Nasdaq composite index is up 20.9 for the past three months and 21.5 percent for the first half.

Yes, the economy remains weak, but the market has been given a boost by low interest rates and tax cuts that should help stimulate economic growth.

Is the rally evidence of a sustained recovery? We certainly hope so. The economy grew at a sluggish 1.4 percent rate in the first quarter and about the same in the second, but Fed forecasters say the gross domestic product is expected to grow at a rate of 3.4 percent in both the third and fourth quarters.

There was some evidence that growth also is happening on the home front. First, the monthly Mid-America Business Conditions Survey of the state’s supply managers and business leaders indicates growth for the second half of 2003.

And, after numerous budget cuts, the state raised its financial forecast by more than $10 million on the last day of the state’s fiscal year.

As a word of caution, the forecasters have missed more than they’ve hit in recent times. Still, it feels good to be optimistic for a while. Let’s see what happens in the second half.

Truckers Still Rollin’

While we’re on the subject of good economic news, is there any end to what the big wheels at truckload carriers J.B. Hunt Transport Services Inc. and P.A.M. Transportation Services Inc. or less-than-truckload carrier Arkansas Best Corp. can accomplish?

All three have sped toward or exceeded record stock highs this year. The sector got a recent boost from the announcement that Yellow Corp. will buy rival Roadway Corp. for $966 million. But revenues were already rolling at the local firms, where shipping demand has for more than a year heralded an economic acceleration.

But based on the success these three companies have had of late, we believe their CEOs are underpaid compared to their publicly traded, Fortune 500 neighbors.