Adding 11 points to Tuesday's 45 point rally, the Dow Jones average closed yesterday at 2,969.59. At this level the DJ index stands 25.5 percent above its 12-month low (2,365.10), but only 1.2 percent below its 12-month high (3,004.46).
MARKET WATCH: "If you have a contrarian bone in your body, this is an excellent time to sit on your assets and wait for solid evidence (auto sales, housing starts) that the consumer is spending money again." (California Technology Stock Letter). . . "The Dow may take one more shot at surpassing 3,000, or going to 3,050, and that's it. That will lead to a steep decline that will not be pleasant." (Lynn Elgert Letter). . . "Despite the sharp slide taking the Dow down to 2,886 by May 14, the important advance/decline line stands 2,000 points above its March 19 level when the Dow closed at 2,867. The market can't be viewed negatively in terms of this major indicator." (Granville Market Letter). . . "We've had three Federal Reserve rate cuts, so what can the Fed do for an encore? Maybe one more cut, bringing us to the lowest levels in 14 years, if inflation and the economy remain subdued." (Smart Money). . . "It's generally true that discount rate cuts, especially multiple cuts, are bullish." (Zweig Letter).
MARYLAND MEMOS: "At times you may find spreads between Treasury bonds and corporate bonds of almost two percentage points. Charles Smith, corporate bond manager for Baltimore's T. Rowe Price, cites 10-year bonds of Bank of America's parent company, BankAmerica, whose finances are strong and becoming stronger. BankAmerica notes yield 9.1 percent, and are rated A." (Money, June, in excellent cover story "Top Yields: Yours for the Taking."). . . The same magazine writes about Bethesda's well-known money manager Charles Allmon, in a story titled, "Why The Biggest Bear is Back Buying Stocks Again." (His favorites: Arnold Industries, Intertrans, Long's Drug Stores.)
BALTIMORE BEAT: The locally developed "Wall Street Week with Louis Rukeyser" technical indicators ("elves") now stand at a "mildly bullish" plus two. . . "The economy is not yet out of the woods. We need more easing of interest rates." (Frank Cappiello). . . "We're still in a bull market, although stocks are not cheap at 18 times earnings and dividends down to three percent. The big money has already been made, although I still like small capitalization growth stocks." (William Gross). . . W$W tomorrow night hosts William H. Donaldson, Chairman and CEO of the New York Stock Exchange.
DEADLY RING: "Thirty-five million Americans have a mortgage, but why don't we ever pronounce the 't'? If we did, we'd be reminded of the sobering roots of the word 'mortgage,' literally a 'dead pledge,' as Dr. Samuel Johnson defined it in his famous dictionary. In French, 'mort' means dead and 'gage' is pledge. The word has a deadly ring to it." (Smithsonian Magazine, April)
BITS & PIECES: "Motivation comes from scrambling to meet your car payments, not banking two million bucks a year to play baseball." (John Lowenstein, Orioles' TV broadcaster). . . "We all know President Bush isn't much interested in domestic policy." (Elizabeth Drew in The New Yorker, May 27). . . "If long-term interest rates don't decline soon, the stock market could be in big trouble." (LaLoggia's Special Situation Report). . . "Inflation-adjusted bond yields are at their lowest level in a decade." (Wall Street Journal). . . Gerald Scheinker, Legg Mason (486-8010) will mail a report on his firm's May 10 conference, with comments on BG&E, Chesapeake Corp., Loyola Capital, Potomac Electric Power, etc. . . ."The next significant market move will be to the upside, but fundamentals are overvalued; keep a 10 percent cash reserve." (Mutual Fund Forecaster). . . "Basic trend still upward." (S&P Outlook). . . "51 percent of people surveyed said they would go 15 minutes out of their way to save $10, and 79 percent would spend 30 minutes to save $50." (Money magazine). . . "The most frequently asked question today is, 'How much is the down payment?' "