Thumbs Up: Fatter Dividends

Perhaps because of the new taxbreaks on dividend income, 2003 ison its way to becoming the best yearfor total dividend payments on theS&P 500 since 1999, with the best percentageincrease in total dividendssince 1996. Still, despite that growth,the dividend yield on the S&P 500 islikely to remain below 2% for the 11thstraight year. The addition of moretechnology stocks to the S&P 500 duringthe 1990s has lowered the yield,since most tech companies don't paydividends. Analysts also predict thatfew tech companies will join Microsoft,which recently paid its first-ever dividend.Those views cause some marketobservers to doubt that the dividendtax cut is a prime mover in the currentstock market rally, since technologystocks are leading the way.