Market starts off quietly but upbeat Holiday trading lifts Dow 8.6 points

The Ticker

October 12, 1993|By Julius Westheimer

Stocks started the week on an upbeat note yesterday although trading was quiet because of the Columbus Day holiday. The Dow Jones industrial average rose 8.67 points to close at 3,593.41.

WORKPLACE WISDOM: "Marshall Field, founder of the Chicago department store that bears his name, once overheard one of his clerks arguing with a customer. He asked what was going on. 'I'm settling a complaint,' said the clerk. 'No, you're not,' said Field. 'Give the lady what she wants.' " (Bits & Pieces)

HOPEFULLY HELPFUL: "Next time your children get a check or savings bond, give them a few dollars to spend right away. Some instant gratification will make saving more acceptable. That and other tips are from 'Young Investor Parents Guide.' This free 50-page booklet covers such topics as the value of money, young entrepreneurs and planning for college. Call 800-403-KIDS." (Business Week)

TAX TIP: "When the next bear market in municipal bonds arrives, be very careful about buying discount issues. Some of your eventual return will be taxable as ordinary income. Until now, individuals have been able to sell appreciated tax-free bonds to generate a capital gain, taxed at low rates. No more. The 1993 tax law changes a portion of those gains from capital gains subject to a 28 percent rate into ordinary income taxed at rates up to 39.6 percent." (Ben Weberman in Forbes, Oct. 11.)

FACTS & FIGURES: If you had invested $10,000 one year ago, here is what you would now have, total return (gain plus income) in these categories: Foreign stocks $13,724; Treasury bonds $12,251; U.S. stocks $11,269, money market fund $10,225 and gold $9,926 . . . "Almost anything goes; hard-pressed schools and colleges are cutting deals to land students they want." (U.S. News & World Report, Oct. 11) From a series of articles, "Paying For College: The Best Values For Your Money." . . . Overheard in the financial district: "Whatever your age is, that number is the percentage of bonds you should have in your portfolio."

AUTUMN LEAVES: Trend of the times: "Wal-Mart now employs more people than the Big 3 automakers combined." ("Washington Week in Review," PBS-TV) . . . "Now, more than ever, take full advantage of retirement plans. Plan contributions can reduce your current taxable income, and income and capital gains grow on a tax-deferred basis -- features made even more compelling by the new tax rates." (T. Rowe Price Report, fall issue.)

AROUND THE STATE: The state of Maryland recently issued general obligation tax-free bonds, rated triple-A by Moody's Investors Service and Standard & Poor's Corp., the income from which is free of federal and Maryland income taxes. Check your broker, banker or bond dealer for rates, maturities, call provisions, etc. . . . Friday night, "Wall Street Week With Louis Rukeyser," soon to mark its 23rd anniversary, spotlights "Defense Stocks Under President Clinton," with guest Phillip Friedman, managing director, Morgan Stanley & Co., and panelists Alan Bond, Harvey Eisen and Carter Randall . . .

Legg Mason's latest "Investor's Dozen" includes Beverly Enterprises, Bristol-Myers Squibb, Casemark International, Dial Corp., GFC Financial, Instrument Systems Corp., Mattel Inc., Shawmut National, Southern National Corp., Telefonos de Mexico, United Illuminating and Waban.

LOOKING AHEAD: "Long bonds may be just as vulnerable today as back in 1987. Time to play it safe on the short end of the yield curve, even though it means earning only about 3 percent." (Ben Weberman, Forbes, Oct. 18) . . . "Don't go for fads, fancies and esoteric stuff right now. There's plenty of value around in good, solid stocks like Coca-Cola, Gillette, American Home Products, Morgan Stanley and Merrill Lynch." (Laszlo Birinyi, financial consultant, in same Forbes) . . . "Sentiment on bonds has gotten fairly optimistic, which poses some risk for the bond market." (Zweig Report) . . . "We don't see how an investment opportunity can get better than what is offered by American Home Products. The company regularly earns 35 percent on unleveraged equity." (Mark Keller, A. G. Edwards.)

STOCK WATCH: "Interest rates won't go much lower and the trend in Wall Street is still up. 1994 earnings will be a pleasant surprise." (Frank Cappiello, Baltimore-based investment adviser and mutual fund manager) . . . "Earnings will remain high and interest rates low. I like Mobil, Exxon, Boston Edison and Dominion Resources." (Bill Waters, Merrill Lynch) . . . "Buy on any pullback because stocks could shoot up 10-15 percent in the next six months. I like AT&T, MCI Communications and McCaw Cellular." (Thomas Monahan, research head, First Boston) . . . "The market is in no danger of a free fall as long as the option speculators are positioned to become rich in such an event. There is still a massive amount of short interest, also suggesting that there won't be a significant break in stocks." (Ripples In The Wave).

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