Although investors were discouraged that the Dow Jones average slipped 27 more points yesterday -- off 61 points, or 2 percent, for two days -- let's put the decline in perspective.
We recall that the Dow's 508-point plunge on October 19, 1987, ran a whopping 22 percent (DJ 2,246 to 1,738) but surprisingly the DJ regained its pre-crash level in only 15 months and now stands 1,605 points, or 92 percent, above its "Black Monday" close.
AND NOW WHERE? "There's powerful evidence that stocks are not overvalued and we see Dow Jones 3,400 to 3,600 this year as long as interest rates and inflation stay subdued." (Bob Brinker's Marketimer) . . . "I don't expect the Federal Reserve to lower interest rates." (Byron Wien, Morgan Stanley strategist) . . . "Earnings gains next year should be more than enough to push stocks higher." (Deemer Technical Research) . . . "Stocks have reached the zenith of their popularity." (International Marketwatch) . . . "Our stock barometer is at a 100 percent bullish reading." (Pring Market Review) . . . "We urge caution because market averages are at historic highs." (Russ Kaplan's Heartyland Advisor.)
LOCAL VIEWS: "At present the Dow rally masks general weakness, but the entire market will rise in the next few months. Then the Dow may pull back a bit. Sell General Motors and the aluminums, buy Syntex and Synergan." (Frank Cappiello) . . . "1993 earnings will move higher and give strength to Wall Street. I'm slightly positive in general, although the Perot uncertainty factor could hold stocks back somewhat." (Eddie Brown) . . . "Keep putting your money in financial assets; they've been good to investors. Cyclical stocks are overdone now, but you can buy Black & Decker, Hewlett Packard, Tambrands and American Express." (Robert Salomon.) All three above quotes from "Wall $treet Week with Louis Rukeyser."
BALTIMORE BEAT: Tomorrow night, "Wall $treet Week" looks at "The Global Scene" with panelists Laszlo Birinyi, James Grant and Martin Zweig . . . Saturday, 8-9 a.m., I'll talk about "Family, Children and Money" with you on WBAL Radio . . . June 23, Chapin Davis presents a free seminar (seating limited to 25) on "Conservative Yield Investing," Village of Cross Keys, 7 p.m. Call Mark Stull (435-3200) for reservations . . . Top insured CD rates locally are at Custom Savings, Washington Savings Bank (Waldorf), Chevy Chase Savings, Equitable Federal Savings (Wheaton), Loyola Federal." (Data from "100 Highest Yields," June 1) . . . Black & Decker is listed under "Well-Poised Multinationals -- Companies with Large Foreign Sales" in S&P Outlook, June 3 . . . T. Rowe Price Science & Technology Fund appears under "Best Funds in Gulf War 1,000 Point Rally" in Mutual Fund Forecaster, June . . . MNC Financial (Maryland National) popped up several times at midweek in the "12-month new high" listings, largely due to takeover rumors.
MIDWEEK MEMOS: According to this week's Barron's, the price-earnings ratio on the S&P 500 stock average stands at 25 times earnings vs. 18 one year ago . . . "Right now, the markets are assuming that Bush will be re-elected." (U.S. News & World Report, June 8) . . . The Middle Fixed Income Letter reminds readers that the 6 percent "floor" U.S. EE Savings Bonds (if you hold them 5 years) appears attractive in this low interest rate climate . . . "In a recent Oppenheimer Management Corp. survey, 69 percent of women and 53 percent of men didn't know that stocks have historically outperformed other popular investments." (Business Week, June 8) . . . Tom Emory, PaineWebber at Hunt Valley, writes: "You recently noted the vTC nearly 50 percent advance in the Dow Jones stocks in the last 5 years. It's also interesting that the Dow average gained 100 percent from its trading low of 1,616 on Oct. 20, 1987 to its closing 3,246 level on Jan. 14, 1992, a time period of just 4 years, 3 months." . . . "Only twice in 22 election years has a negative return been put in place. The most recent was 44 years ago in 1948. The average return since 1948 has been over 8 percent with nary a slip." (Smith Barney via Rick Faby)