Stocks gain, in pre-Labor Day tradition

The Ticker

September 03, 1992|By Julius Westheimer

Moving higher for five of the last six sessions, the Dow Jones average gained 24 points yesterday to close at 3,290.31. "These days could be the best of the next two months," says Smart Money, adding, "the three-day period before Labor Day showed a loss only once in the last six election years."

DAYS GROW SHORT: "It's a long, long while from May to December/ but the days grow short when you reach September./ When the autumn weather turns the leaves to flame/ one hasn't got time for the waiting game./ And the days dwindle down to a precious few," etc. These lines from "September Song" (1934) may make investors wonder if the days grow short for a stubbornly high stock market in the face of continuing recession. Read on:

MIDWEEK MELANCHOLY: "Most stock market observers believe it is 'late in the day' for the bull market; advisory community decidedly negative on stocks." (Dick Davis Digest) . . . "Many things suggest that this bull market is in its late, more risky stage." (Robert Farrell, Merrill Lynch) . . . "Debt recession continues and stocks remain tremendously overvalued." (FXC Investors Corp.) . . . "Bullish advisers now 50 percent of total; we're nearing level where corrections often begin." (Investors Intelligence) . . . "Stocks entered a major bear market in January." (Joseph Granville)

SEPTEMBER SUNSHINE: "Despite growing number of gloomsters, bull market has additional time remaining." (Tomorrow's Stocks) . . . "Consensus of top timers remains bullish with eight of our top 10 timers optimistic. With low inflation, low interest rates and improving economy, bulls believe downside risk is limited." (Timer Digest) . . . "Financial assets will remain main beneficiaries of monetary ease as inflation heads lower. Investors should maintain heavy stock commitments." (Capital Growth Letter) . . . "Cash from money funds will send stocks to higher highs this year and next, no matter who wins the election." (William LeFevre, Tucker Anthony)

HOPEFULLY HELPFUL: "One loan that continues to get cheaper is the one-year adjustable rate mortgage (ARM). Steep slide is the direct result of July 2 discount rate cut. Since ARMs are directly influenced by yields on one-year Treasury bonds, which dropped with the Fed's discount rate, spread between the typical ARM and 30-year fixed mortgage stands at 2.80 percentage points, a wide gap by historical standards. Is it enough for borrowers considering the two loan types? If you plan to be in the home for three years or less an ARM is an excellent deal." (100 Highest Yields) For subscription data, call (407) 627-7330.

MARYLAND MEMOS: Manor Care stock hit a 12-month high in midweek trading. . . . "Drop in long-term interest rates is the most probable scenario over next several years. All in all, risk-reward ratio now is incomparably in favor of bonds or high-quality preferred stocks." (Rex Rehfeld, Gruntal & Co.'s Baltimore office) . . . Rowe Price Equity Income Fund is listed under "Mutual Funds Recommended by 4 Newsletters Followed by Hulbert Financial Digest." . . . Procter & Gamble, with a major manufacturing unit here, is recommended by four newsletters followed by Hulbert. . . . Smith Barney's Rick Faby (494-1853) will mail his firm's 40-page "Health Care Investor," with specific suggestions.

SEPTEMBER SONGS: Tomorrow night George Keane, president, the Common Fund, visits "Wall Street Week with Louis Rukeyser" with panelists Eddie Brown, John Dessauer and Martin Zweig. . . . I will answer your financial questions Saturday mornings around 8:10 on WBAL-TV (Channel 11) if you dial 481-8844. . . . "If you do your own investment research, use a discount broker." (CNBC NEWS) . . . "An afternoon affair (wedding, bar mitzvah, etc.) is less formal than an evening event and the food can be simpler and cheaper." (Smart Money) . . . "Investors who take a broker to arbitration have a 40 percent greater chance of winning when they insist on a face-to-face hearing vs. merely submitting documents for review. Hiring a lawyer helps, too."

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