Stock prices for most Chattanooga-area companies jumped in the first quarter, though one money manager called for care moving ahead.
"Caution is the watchword," said Forrest Simmons, senior director of BNY Mellon Wealth Management in Atlanta. "We are urging people to be very cautious right now because we think the market is very fully valued."
Shares of Dixie Group, Covenant Transportation Group and CBL & Associates Properties Inc., all recorded double-digit percentage gains in the first quarter.
Dan Frierson, chief executive of Chattanooga-based Dixie Group, said the floorcovering business has begun to improve amid the slow economy.
"We should have pretty good growth once we come out of this," he said. But the industry isn't likely to improve quickly but rather over the next couple of years, Mr. Frierson said.
Mr. Simmons said the stock market's "great quarter" had a lot to do with money coming into securities after it had sat on the sidelines.
"Once the market has a fairly large advance, people want to put (the cash) to work so they don't want to miss the next move up," he said.
Mr. Simmons said that with a money market rate sitting at about zero, it made sense on the surface to shift assets to a better return.
"The economic numbers and earning reports continue to surprise on the upside," he said. "You've got some things that put a pretty decent wind to the back."
But Mr. Simmons said his company's yearend price target for the S&P 500 is about 1,200.
"With dividends and appreciation you're looking at another 5 percent from here," he said.
Chattem, the consumer health products company, was sold to French pharmaceutical giant Sanofi-Aventis in the first quarter for $1.9 billion in cash, or $93.50 per share.
Sanofi-Aventis' shares closed Wednesday at $37.36, down 4.9 percent from Dec. 31, 2009.