Lower interest rates prod Dow to advance 35 points to 3,292

The Ticker

January 26, 1993|By Julius Westheimer

Propelled higher by sharply lower interest rates, the Dow Jones industrial average vaulted 35.39 points yesterday, closing at 3,292.20. When rates fall, investors tend to shun CDs, T-bills, etc., and buy higher-yielding stocks instead.

TAKE YOUR CHOICE: "Fundamentals of the bull market, which has lasted 116 consecutive weeks without so much as a 10 percent correction, will stay intact." (Market Maneuvers) . . . "Sell most stocks. The bull cycle that started in October 1990 has reached maximum maturity. Chances of a 1993 extension are slim." (Granville Letter) . . . "The market has had every opportunity to stage a meaningful correction recently, and didn't, and its technical strength is strong evidence that it isn't about to stage one now." (Deemer Technical Research) . . . "Just as 1992 mirrored 1972, so we expect 1993 and 1994 to be similar market-wise to 1973 and 1974, which were horrible down years. Remember, 'down' is faster." (Richland Report)

WEEKEND WRAP-UP: "The percentage of stock market 'bears' is now the highest it's been since October last year, when it was 39.8 percent. So many bears make a big drop unlikely." (Investors Intelligence) . . . "We could get a feeding frenzy to Dow Jones 4,000 but because so many people are counting on it

makes me feel that the 'Greater Fool' theory won't be so accommodating. We're within three weeks of a major stock and bond turndown." (Proctor Investment Management) . . . "We're nowhere near an important top." (Technical Trends)

WHAT YOU SAID: Although our Dow Jones forecasting contest is now closed, we print some postcard comments: "I say 3,584. The National Football League team [Dallas] will win the Super Bowl once again and therefore the Dow Jones will close higher. Also, interest rates will remain low." (Joseph McFarland, Ellicott City) . . . "The 12-year binge Reagan and Bush have signed to our national credit card will soon come to a dramatic end. A full-blown depression will probably start this year. The 'deficit bills' are coming in and leave it to the Washington magicians to find the money. I'll predict 740." (Harry Schwartz) . . . "I'll dip down to DJ 2,522. Reason: the Cabinet." (W. J. Samuelson)

LOOKING BACK: Over the weekend I figured out that if you had bought BG&E stock in 1982 (cost $7, adjusted for two splits), you would have tripled your money and you would now be receiving 18 percent yield on your investment. In the same time frame for Potomac Electric Power (1982 price also $7, adjusted) you would have more than

tripled your money and would now be receiving a 23 percent return.

LOOKING AHEAD: Here are 1993 stock predictions of Howard "Pete" Colhoun, whose 1992 selections, up 59.9 percent, topped all 27 panelists' picks on "Wall Street Week With Louis Rukeyser": Advanced Technology Labs, Amylin Pharmaceuticals, Arakis Energy, Benton Oil & Gas, Cellular Communication of Porto Rico, Crop Genetics, Digital Equipment, General Parametic, Good Guys, Integrated Labs, Phoenix Re and Silicon Valley Bank. Mr. Colhoun forecasts the Dow will close 1993 at 3,330.

MORE SELECTIONS: And here are the 1993 stock selections of Greta Marshall, whose 1992 picks advanced 50.5 percent, second best of our panel: Autodesk, Aidus, Baldwin Technology, Bank South, Borland, Encom, Hutchison Technology, Lifetime Corp., Merry-Go-Round, NCI Building and Simco. She says 3,340 for 1993 Dow Jones finale.

MONTH-END MEMOS: Looking ahead, February is historically one of

See TICKER, 13C, Col. 1 TICKER, from 11C

Wall Street's worst months, edging up an average of 0.1 percent over the past 42 years. September has been the stock market's worst, falling 0.7 percent over the same time span. . . . On the brighter side, Dwight Hikel, president, Shelter Systems, builders of housing components, told me Sunday, "Things are definitely looking up; 1991 was our worst year recently, 1992 showed marked improvement and this year business is brisk. Maybe the worst is over." . . . At a recent Governor's Breakfast, Gov. William Donald Schaefer told us, "A new, bigger Baltimore Convention Center is an absolute must for growth of the city and state. Write your Maryland legislators and tell them so." . . . If you invest $3,620 in a 15-year, 7 percent zero-coupon bond, you will have $10,000 at maturity. Zero coupon bonds, either Treasuries or tax-frees, are ideal for socking money away for future college bills, etc. . . . Bethlehem Steel, GEICO, Rouse, Citizens Bancorp and Signet all hit 12-month highs in last week's generally 'down' stock market.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.