Edging three points lower yesterday, the Dow Jones average closed at 3,005.37, about 30 points below its peak but 640 points above its low for the last 12 months.
AND NOW WHERE? "We're concerned that stock prices have gotten ahead of themselves." (Blue Chip Values) . . . "Market's summer topping process is coming to an end." (Robert Prechter's Elliott Wave Theorist) . . . "I'm getting signals that point to a powerful August advance dead ahead." (Granville Letter) . . . "Don't let the number of encouraging economic reports lull you into complacency; with stocks near record levels, 'relapse' signs could trigger a huge sell-off." (Dow Theory Forecasts) . . . "Stocks and bonds are near their high risk zones; nevertheless, we're avoiding cash." (No-Load Mutual Fund Newsletter) . . . "Small stocks are the place to be." (Marketarian Letter) . . . "Don't look for big gains just now." (S&P Outlook) . . . "Fed easing hasn't always guaranteed good stock performance." (California Technology Letter) . . . Ticker Note: Of all market forecasts I read recently, three quarters are bearish. (Maybe that's a bullish sign.)
INFLATION'S BITE: According to Barron's, Aug. 12, these "Trivia Index" items have moved up in price as follows since August, 1988 (percentage gains in parentheses): Barron's from $1.75 to $2.50 (43 percent); Wall Street Journal 50 cents to 75 cents (50); McDonald's quarter pounder with cheese $2.19 to $2.89 (32); Baskin Robbins ice cream cone $1.50 to $1.79 (19); Good Humor, 95 cents to $1.50 (58); Beefeater martini, Plaza Hotel, New York $5.95 to $8.75 (47); Cable TV basic monthly charge $14.95 to $20.95 (40); Brooks Bros. power tie $25 to $38 (52). Average (arithmetic mean) of all 50 items listed is up 29 percent.
LOCAL LINE: Legg Mason's Fred Yoder (771-3455) will mail his firm's recent recommendation letter on Bell Atlantic . . . Gerald Scheinker (486-8010) will send a BG&E update ("Should return to prior high-quality status following completion of firm's rate issues.") . . . Phone Dean Witter's Jack Rosenbloom (547-7027) for "Hot Growth Stocks for Summer." . . . T. Rowe Price annual reports show that some T.R.P. mutual funds (fund names in parentheses) hold shares in these local stocks: Baltimore Bancorp (Growth & Income, Equity Income), Rouse (New Era, Capital Appreciation, New America Growth), USF&G (Equity Income), BG&E, Delmarva Power & Light (Equity Income), Legg Mason (New Horizons), Alex Brown (New America Growth) . . . Mercantile Safe Deposit & Trust Co. will mail its latest "Comments," with articles on gifts in estate planning, collecting art, IRA rollovers, etc.
AUGUST DIARY: Tomorrow night, "Wall Street Week with Louis Ruykeyser" examines foreign stocks . . . Overheard at The Center Club: "Why does the Department of Interior handle everything outdoors?" . . . Nancy Katz, co-editor of Senior Digest, tells me, "I'm the only one in the office who still hacks away at an ancient typewriter, but am I popular when there's a power failure!" . . . Top local insured CD yields are at Eastern Savings, Chevy Chase Savings, Maryland National Bank, Custom Savings, according to "100 Highest Yields." . . . Kiplinger Washington Letter says that business will face rough going, even though the recession has ended, adding that the recovery will not stall, no "double-dip" slump is expected but recovery will not be robust . . . "Two market timing funds, Lowry and Monitrend, have thrown in the towel." (Dick Davis Digest) . . . "Growth stock investing focuses on well-managed companies that operate in fertile fields where earnings and dividends grow faster than inflation and the overall economy." (T. Rowe Price "Insights") . . . "Top-performing 'aggressive growth' mutual funds over one year are, in order, 20th Century Ultra, Phoenix Capital Appreciation, United New Concepts." (Investment Co. Data Inc.)