U.S. Capital Spending To Increase In 2003's Second Six Months -- Maybe

By John S. McClenahen Differing views within one securities firm -- New York-based Merrill Lynch & Co. -- illustrate how elusive something close to a consensus on capital spending remains. Merrill Lynch's Gerald D. Cohen and other economists foresee the Iraq issue being resolved quickly (possibly during the first calendar quarter of 2002), the equities market stabilizing and credit spreads narrowing. The result: increased capital spending by the time July rolls around next year. However, Merrill Lynch's global strategy folks are more cautious than Cohen and his colleagues. They're not convinced that revenues will be strong enough "to fully repair balance sheets." As a result, capital spending would be delayed.

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