Slumping 21 points, the Dow Jones average closed yesterday at 2,865.38. With P/E ratios and interest rates high, investors fled to cash on heavy volume. But, when stocks opened today, the DJ index stood exactly 500 points above its 12-month low reached in October 1990.
WALL STREET WATCH: "The market will go significantly higher over the next three months. Dow 3,000 is not unreasonable." (The Chartist) . . . "Bias remains to the upside and once the consolidation is complete, averages should advance 10-12 percent." (Ladenburg, Thalmann) . . . "Dow industrials surged to new highs, but it wasn't a pretty sight. Divergences set in, our model issued a 'sell' and we took to the safety of cash." (Professional Timing Service) . . . "Our technical indicators show that the upcoming correction could be deeper than the one we saw during March. Institutional cash is very low; it is now best to step aside." (Wellington Letter) . . . "The market's base is steadily deteriorating. Stock price gains have outpaced earnings and dividend growth." (Mutual Fund Forecaster)
BALTIMORE BEAT: Tomorrow night, locally produced "Wall Street Week with Louis Rukeyser" spotlights Steven Einhorn, of Goldman, Sachs & Co., on "The Case for Stocks." . . . Investment Counselors of Maryland says, "If the economy staggers on at close to zero growth, or if the recession deepens further, we would see increasing monetary ease but stocks would be vulnerable. The 'earnings-based' phase of this market cannot be deferred indefinitely. Earnings will arrive, probably in the second half" . . . Robert Smelkinson, CEO of Smelkinson Sysco Food Services, Jessup, writes, "Restaurants, which reflect disposable income, are a prime gauge of general conditions and for your readers' information our April sales were very strong and May, so far, is running well ahead of April."