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S&P: Trim Stock Exposure

In the wake of a 23% advance in the S&P 500 since the March 11 low, the near conclusion of a stronger-than-expected second-quarter earnings period, and the beginning of the third quarter -- traditionally a weak period for equity prices -- Standard & Poor's

Investment Policy Committee voted to make a change to its recommended investment allocation.

On July 30, the IPC, a group of senior managers who meet weekly to oversee all investment-related activity done in S&P's name, voted to reduce the recommended equity exposure to 60% from 65%. The suggested bond allocation was increased to 15% from 10%, as the committee members believe that equity investors may be attracted to the sharply higher yields offered by bonds in the past few weeks. The recommended cash exposure was left unchanged at 25%.

The committee voted on June 25 to lower its recommended bond exposure to 10% from 15% and raise its suggested cash allocation to 25% from 20%. Previously, the IPC boosted recommended equity exposure in December and August, 2002. The committee lowered the recommended stock allocation in both April and June, 2002.

The IPC believes that the S&P 500 will end the year at 1030, for a 17% 12-month gain. By the middle of 2004, it expects the "500" to reach 1105. From Standard & Poor's Investment Policy Committee

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