Stocks squeeze out holiday advance

The Ticker

January 19, 1993|By Julius Wesheimer

Propelled by modest gains in IBM and AT&T, the Dow Jones industrial average squeezed out a 3.79 point advance yesterday, closing at 3,274.91. Volume came to 197 million shares, surprisingly high for a financial "half-holiday."

LOOKING AHEAD: "Numerous warning signs are flashing. The rally that pushed stocks higher over the past three months is in its final stages. The coming downturn could drop the Dow to the 2,800-2,900 area and the NASDAQ composite down to 600. Move to cash and rest easy at night!" (The Inefficient Market Hypothesis) . . . "Stocks will rally strongly in January, but by late February the good earnings reports will start to dry up and the market will be vulnerable to a correction." (Louis Navellier's MPT Review)

MORE GLOOM: "Inflation and interest rates will remain low, permitting stocks to advance with higher earnings. But with all the euphoria over future prospects, stocks could get ahead of themselves and be vulnerable to a substantial correction." (Prudent Speculator) . . . "Every time dividends have sunk below 3 percent, the average annual stock return has been about 1 percent. So with dividends at 3 percent, it's going to take a lot to make money in the general market. You'll have to be a stock picker." (Oscar Schafer, portfolio manager)

SUMMARY: Of about 25 newsletters, magazines and articles I read over the past week, approximately 65 percent were gloomy on Wall Street's near-term outlook.

BITS & PIECES: Legg Mason's new 33-page Mid-Atlantic Bank (( and Thrift Quarterly is yours by calling Gerald Scheinker, 486-8010. ("Over the last four quarters, the combination of banks' rising net interest margins, improving asset quality and good cost control resulted in higher earnings and rising profitability ratios.") . . . Ferris, Baker Watts' Michael Dougherty (659-4677) will mail "Let's Just Do It," a discussion of how to use "stop-loss" orders to protect your account. . . . The following firms allow "first-time direct purchase" of their stock by any investor: Exxon (800-252-1800); Procter & Gamble (800-742-6253); Johnson Controls (414-228-2363) and Texaco (914-253-4000 or 800-283-9785).

DINNER OR LUNCH? Postcards are arriving for our stock market contest. To enter, mail your postcard (letters not accepted) with your prediction for the Dow Jones industrial average on Dec. 31, 1993, with your name, address and home phone number. Address your card to Julius Westheimer, Ticker Contest, Business News, 5th floor, The Evening Sun, 501 N. Calvert St., Baltimore 21278-0001. Winner wins dinner for two as guests of Mr. and Mrs. Ticker, runner-up ditto for lunch. One card per person. Deadline: midnight, Sunday, Jan. 24.

HOPEFULLY HELPFUL: "Don't take credit you don't need. Say that you accept a credit card with an open line of credit, thinking it can't hurt to have the resource available. It might hurt, though. Perhaps you apply for a car loan. When the bank sees your open credit line, it may turn you down, reasoning that you may not be able to handle your car payments if you do use the credit line available to you." (Glamour). . . . Are you getting maximum benefits where you work? For Employee Benefits, 1992 Edition, jampacked with data from 1,000 firms surveyed, send a check for $19.95 to U.S. Chamber of Commerce Fulfillment Office, 1615 H. St. NW, Washington, D.C. 20062. Benefits equaled 40 percent of payrolls in 1991 and averaged $13,100 per worker.

JANUARY JOURNAL: On "Wall Street Week With Louis Rukeyser" last Friday, guest Eric Miller, chief investment officer, Donald, Lufkin & Jenrette, said, "I especially like the bank stocks for 1993, particularly Shawmut, Bank of Boston and Citicorp." This Friday, W$W will focus on "Technology's Future in the Clinton Years and Beyond." . . . If you want a transcript of W$W's year-end show, with all 27 panelists' Dow Jones predictions and 1993 stock selections, send $5 to "Transcripts: Wall Street Week," Owings Mills, Md. 21117. . . . Beginning this week, I answer your call-in questions weekdays on WBAL-TV (Channel 11) at 6:45 a.m., one-half hour later than previously. On Saturdays, the time remains 8:15 a.m. . . . "Always worry when bargains are hard to find because historically that has meant the market is fully valued and will soon drop." (1993 Stock Trader's Almanac)

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