LONGING THE DOW + FTSE = MASSIVE RALLY AHEAD-part 6(into the new year)

NEW YORK (Reuters) - Expect stocks to rise next week as investors add winners to lackluster 2001 portfolios, and buying carries into the new year with hopes 2002 will see an end to the U.S. recession.

"It is likely we will see a strong close to the year, and in early January, you typically see money reallocated to the stock market," said Peter Coolidge, senior equity trader at Brean Murray & Co., New York.

"So if you don't have any geopolitical events to upset the apple cart, you should see a continuation of the bullish sentiment," Coolidge added.

U.S. markets are open on New Year's Eve, but will be closed on Tuesday, Jan. 1. Trade resumes on Wednesday, Jan. 2.

"Next week is going to be busy," predicted Brian Pears, head equity trader at Victory Capital Management, of Cleveland, Ohio. "At the end of the year, a lot of accounts need to do once-a-year sort of trading. Some of that is done for tax purposes, and some of it is window dressing. My guess is you will probably see a strong week."

With window dressing, professional investors drop losers from their holdings and add winners. The result is a better-looking portfolio when the pros inform clients of their year-end positions.

FIVE DAYS TO WATCH

Investors also will be keenly interested in the first five trading days of the year. If this period finishes in the black, history says the odds are overwhelming that the year, too, will end positively.

Over the past 52 years, according to the Stock Trader's Almanac, the broad stock market has climbed in 32 years, and dropped in 18. Of the winning years, 28 had a positive five-day kickoff. Of the 18 losing years, nine had declines over the first five trading days.

The week also will bring the likely confirmation that 2001 was the worst year for the broad market since 1974. While still subject to Monday's trading action, the Standard & Poor's 500 is on track to close down about 12 percent. In 1974, the S&P 500 fell nearly 30 percent.

The Dow Jones industrial average is set to have a 2001 drop of about 6 percent, nearly matching the 2000 drop of 6.2 percent.

Last week, shortened to 3.5 trading days due to Christmas, the Dow Jones industrial average rose 1 percent, the Nasdaq composite added about 2 percent and the broad Standard & Poor's 500 index climbed about 1.4 percent.

could get of to a flyer and cause some short covering as well!