Wall Street battles September blues

The Ticker

September 01, 1992|By Julius Westheimer

Reversing Friday's direction, the Dow Jones average skidded nearly 10 1/2 points yesterday, closing at 3,257.35. Entering the year's final third, the Dow stands 88 points above its level of Jan. 1 but 156 points below the all-time high reached in late May.

WHICH WAY NOW? Historically, September is a "down" Wall Street month, the year's worst, losing an average of 0.7 percent over the last 41 years. According to the 1992 Stock Trader's Almanac, "The Dow Jones average was up only four times in the last 22 years, namely 1973, 1976, 1983 and 1988."

LOOKING UP: "I see a strong market ahead. The Dow Jones average is now selling at 16 times this year's earnings and only 11 times next year's earnings, not bad. Long-term, stock prices always depend on earnings." (Carter Randall, investment adviser) . . . "Stocks will go higher, especially with CDs bringing only 3 percent." (Mary Farrell, technician) . . . "The 1993 economy will be bright and there are lots of bargains out there, some of which are Pepsi, Pittway, Paramount, General Cinema and Eastern Fuel & Gas. You have to be a stock picker now, not just sit there like in the 1980s" (Mario Gabelli, well-known adviser). All above quotes from Friday's "Wall Street Week with Louis Rukeyser."

MA DARKER SIDE: "Without a rising bond market and lower interest

rates, stocks could be in trouble. Recent technical deterioration suggests a much more cautious attitude." (Futures Trends) . . . "Look out below; gravity takes hold from here on." (Global Market Strategist) . . . "Return to maximum cash. Just do it." (Institutional Monitor) . . . "Market consensus is deceiving, as long-term strength is just not there. Market's technical health improved slightly but this may be an occasional 'blip.' Many gauges are on verge of rapid deterioration." (Just The Facts Analysis) . . .

HOPEFULLY HELPFUL: For lowest credit card rates in the U.S., call non-profit Bankcard Holders of America at 1-703-481-1110. . . . For lowest mortgage rates, call HSH Associates at 1-800-UPDATES. Ask for fees; this is not a non-profit organization. . . Many people haven't thought of this but if you're receiving only 3 percent in your savings account or CD but paying 8 percent or more on your mortgage or car loan, consider picking up about 5 percentage points by paying the loans off, or down. Consult your accountant for details. . . Also, consider buying EE Savings Bonds at about 6 percent -- double the short-term CD rate. Interest is free of state and local income taxes if you hold them for five years and of federal income taxes if you use proceeds for college tuition fees and meet certain conditions. Your banker has details.

WORKPLACE WISDOM: "For most early-retiree wannabees, company plans are the easiest way to go provided you have access to the crown jewel of corporate benefits, the 401(k) tax-deferred savings plan. Approximately 41 percent of all corporations with 100 or more employees offer 401(k)s, which typically allow you to put away as much as 6 percent of your pretax income (up to a limit of $8,728 this year) in a handful of investments ranging from money market accounts to aggressive stock funds. If you invest $500 each month in an account growing at 8 percent annually, you'll have $475,500 in 25 years." (Money, September)

SEPTEMBER SONGS: In trying to relate to 250,000 homeless Floridians, I figured out that a quarter of a million people would fill to capacity 5 1/2 Oriole Park at Camden Yards stadiums. . . When WBAL Radio newscaster Alan Walden told me that California wine makers expect a bumper grape crop this year, he added, "Historically, a Republican was elected president in every election year that California experienced a good grape harvest." . . . Speaking of politics, did you know that if President Bush should lose, he would be the first Republican president since Herbert Hoover to leave the White House involuntarily after just four years? . . . A young man visiting here from Israel said the biggest change he notices in the U.S. in three years is the large number of homeless people and panhandlers on our streets. . . A Baltimore man told me that in 1976, when he was in high school, he invested $500 in Potomac Electric Power stock and today, with reinvested dividends, his original investment is worth $5,700. . . "We spend an average of 10 years waiting in lines and eight months opening junk mail." (CNN News) . . . Latest Kiplinger Washington Letter says that airfares soon will rise 5 percent, hotel and motel prices will remain flat and rental cars will rise 3 percent after falling this year. New cars: 3 percent more for U.S. makes, 5 percent for imports. . . Stock and bond markets close next Monday for Labor Day.

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