Low T-bill rates push Dow up by 26 points Investors welcome lower interest rates

The Ticker

September 29, 1992|By Julius Westheiner

Surging because investors welcomed lower interest rates -- yesterday's weekly sale pushed T-bill rates to a 29-year low of 2.7 percent -- the Dow Jones average jumped 26 points to close at 3,276.26.

OCTOBER BLUES: Approaching the new month, the 1992 Stock Trader's Almanac warns, "The Curse of October 1929 was beginning to recede and then came 1987 and a 602-point 'meltdown' that month in the Dow. Also, October brings memories of back-to-back 'massacres' in 1978 and 1979. But the tenth month has also been known as a 'bear-killer,' having turned the tide in six major bear markets: 1946, 1957, 1960, 1962, 1966 and 1974. On average over 40 years, the Dow Jones average has inched up 0.4 percent in October."

LOOKING AHEAD: "Although health-care stocks have been battered, they'll look much better six to 12 months ahead. Buy Surgical Care Affiliates, a beaten-down favorite of mine." (Alan Bond, portfolio manager) . . . "Merck has been hit pretty hard, but I'd still watch for strength before I bought it." (Bernadette Murphy, technician) . . . "We're in an economic recovery, slow as it may be. There's good news ahead for stocks." (Carter Randall, adviser) . . . "There's an uncomfortable feeling of classic 'bear' market rallies -- sharp spurts followed by slower but greater declines." (Dollars & Donuts.)

HOPEFULLY HOPEFUL: If you're wondering how to pay for college tuition bills many years ahead, ask your broker about zero-coupon Treasury or zero coupon tax-free municipal bonds. In most cases, zeros provide good yields and the tax-frees are exempt from Federal, state income taxes and capital gains taxes. Treasuries are suitable for people in the 15 percent tax bracket but for those in higher brackets, tax-free "zeros" are indicated. Check your broker. . . . Before mailing a sales proposal of any sort, be careful about details. A man told me last week that he rejected an investment adviser's proposal because the adviser spelled the prospect's name wrong, had an error in the address and Page 1 alone contained five typographical errors. As the prospect said, "If he is this careless, I don't want him handling my money."

BALTIMORE BEAT: Myron Oppenheimer, investment chief, Security Trust/Maryland National Bank (P. O. Box 995, Balto., Md., 21203) will mail his firm's latest Strategy Update. ("While we expect some time lag between interest rate declines and resulting economic growth, there should be some acceleration shortly.") . . . Harry B. Gorfine & Co. (539-5474) will mail "Miscellaneous Employee Benefit Developments." . . . Mercantile-Safe Deposit & Trust Co.'s latest "Emphasis List" includes Apple Computer, Bristol-Myers Squibb, British Petroleum, Delta Airlines and Giant Food. . . . In last week's sharply lower stock market (Dow Jones average off 77 points), Baltimore's PHH Corp. popped up in the weekly "12-month new high" listings. The stock touched 38 7/8 , 10 points above its yearly low. . . . The T. Rowe Price Capital Appreciation Fund, Dreyfus Strategic Investing, Weltz Value and Phoenix Growth Stock Fund are listed in that order under "Riding Out a Bear Market: The 25 Best-Performing Growth Mutual Funds in The Last Two Bear Markets" in a listing by Morningstar Inc., a national fund-rating service.

MONTH-ENDERS: "The Power of Niche Marketing" in this week's National Business Employment Weekly (Sept. 25-Oct. 1 issue) is worth reading. ("These days you stop mailing out thousands of resumes. Instead, you must find out (1) what your potential employer wants you to accomplish in the first year on the job and (2) through what means you reach those accomplishments. First, get to know a few employers." The story has many specific

suggestions. . . . Washington Gas Light stock, yielding 5.6 percent, is listed under "Investments for Risk-Averse Investors" in the latest S&P Outlook. . . . The most recent Kiplinger Washington Letter says that business will not rebound in time to help President Bush's re-election chances, adding that the economy is only crawling ahead. . . . Money Savers: "Go to the movies at off times when they offer discounts; borrow or rent sports equipment you won't use more than twice a year; buy next year's summer clothes now at substantial markdowns." (Dollar Stretcher) . . . "Series EE savings bonds are a great investment now; they're ultra-safe and pay a guaranteed minimum of six percent if held five years. Investment limit is $15,000 a year ($30,000 face value) per person." (Joel Isaacson, CPA, New York.)

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