Dow drops just 7 points despite the bad news

The Ticker

July 06, 1993|By Julius Westheimer

Disregarding a torrent of bad economic reports -- plunging new home sales, a sharp drop in consumer confidence, declining factory orders and rising unemployment -- stocks held remarkably steady last week. The Dow Jones industrial average gave up only 6.92 points, closing at 3,483.97. The Dow utility average actually posted a slim gain for the five extremely busy sessions.

MONEY TALK: "If you would know the value of money, go and borrow some." (Benjamin Franklin, Poor Richard's Almanack, 1754). . . "Who borrows easily? He who pays punctually." (Alexander Negris, A Dictionary of Modern Greek Proverbs, 1831.)

HOPEFULLY HELPFUL: The following stocks are included under "Favored Blue Chips" in S&P Outlook, June 30: AT&T, C.R. Bard, Coca-Cola, Family Dollar Stores, Gap, Hershey, Johnson & Johnson, Liz Claiborne, Luby's Cafeterias, Pfizer, Schering Plough and Wrigley. (Note the preponderance of beaten-down drug and "brand name" issues). . . The same S&P issue adds: "A simplified approach to providing for a young child's college costs is to set aside growth stock mutual funds, index funds or individual stocks. Such investments have outperformed fixed-income vehicles (bonds, CDs, savings accounts, etc.) over time and reinvesting their dividends allows for substantial compounding."

JULY JOURNAL: Business Week says, "A durable power of attorney gives one's domestic partner the right to make any financial decisions should one partner become mentally or physically incapacitated. Otherwise the next of kin has that right.". . . Harry B. Gorfine & Co. (539-5474) will send its free July Tax Report, detailing these retirement plan choices: Defined-benefit pension plan ("Employees receive a fixed retirement benefit based on a formula that the plan specifies"), money-purchase pension plan ("Employer promises to make an annual deductible fixed contribution"), profit-sharing plan, 401(k) plan, employee stock ownership plan, etc. . . . Over the past 10 years, according to Forbes, July 5, these investments yielded the following percentage annual returns, compounded annually: Stocks 14.8, bonds 13.2, Chinese ceramics 7.6, 3-month Treasury bills 7.3, diamonds 5.9, foreign exchange 5.6.

MIDSUMMER HUNGER: Our Daily Bread soup kitchen, 411 Cathedral St., across from the Enoch Pratt Free Library, desperately needs eggs, desserts, lunch meat, tea bags, muffins, peanut butter, salt, milk, tuna fish, baby food, bars of soap, and paper napkins. The kitchen feeds over 800 men, women and (sadly) children 365 days a year. Ticker Note: People get just as hungry in midsummer as they do during the Christmas holidays, maybe more so, because fewer people respond to pleas like this one.

NOTES & QUOTES: Working Woman magazine, in its July cover story, "The 25 Hottest Careers," includes these best mid-1990s job opportunities for women: Computer programmers, database managers, systems analysts, telecommunication managers, employee trainers, environmental consultants, school administrators, family physicians, home health-care nurses, nurse practitioners, physical therapists. And the story gives these "Small Business Opportunities": Financial planning, private investigation and professional temporary management. . . . "Take your travel agent to lunch and tell him/her to let you know when a travel bargain appears. Agency fax machines spew out deals all the time as hotels, cruise lines, etc., try to fill empty spaces." (Kiplinger's Personal Finance Magazine)

LOOKING AHEAD: Last Friday, these four first-half top stock-pickers on "Wall Street Week With Louis Rukeyser" voiced these selections and year-end Dow Jones predictions. James Grant: Western Mining Corp., DJ 2,650; Beth Dater: Motorola, Schlumberger, DJ 3,450; Harvey Eisen: Mattel, Itel, DJ 3,600; Mike Holland: Halliburton, British Petroleum, Schlumberger, DJ 3,000. . . . Reversing field, most observers I read and heard last week were optimistic. A sampling: "With pessimism remaining at high levels, the stock market can only go higher." (The Aggressive Conservative Investor). . . "Second quarter earnings will soon be with us and should generally make good reading; a summer rally is a reasonable bet." (United & Babson Report) . . . "For the balance of 1993 I'm sticking with my earlier predictions for the Dow average to close the year at 3,550." (John Dessauer, Dessauer's Journal). . . "We believe Berkshire Hathaway, the highest-priced stock on the Big Board ($15,100 a share) is an outstanding long-term investment. Since May 1991, Berkshire has risen 92 percent and since 1969 the stock has appreciated 82,000 (no misprint) percent." (The Schott Letter). . . . "Rather than dream about fancy Dow numbers, let's understand the tough game we're in; we approach this tape in a very creative and cautious manner." (Professional Tape Reader).

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