Dow average dips 6.76 other indexes gain

The Ticker

March 01, 1994|By Julius Westheimer

Losing ground late in the session, the Dow Jones industrial average slipped from a 15-point gain to a 6.76 point loss yesterday, closing at 3,832.02. Other stock indexes finished moderately higher, and bonds registered a modest gain.

BALTIMORE BEAT: Black & Decker, the Rouse Co. and Integrated Health Services recently reported substantially higher earnings. (Ticker suggestion: When looking for a job, always contact firms whose profits are climbing) . . . Local stocks reaching 12-month highs in last week's "down" market include Bank Maryland, Hechinger and Crown Central Petroleum. Stocks slipping to 12-month lows include BG&E, Potomac Electric Power and PHH Corp. . . . PaineWebber's Marvin Fribush will mail you his firm's 12-page "Retiring on Your Terms: New Strategies for Retirement Planning" and "Money Notes" ("Market Heading to DJ 4,000") if you phone him at 576-3220 . . . Call David Clogg at Chapin, Davis (435-3200) for his firm's buy recommendation on Sylvan Foods in "The Disciplined Contrarian."

YOU DECIDE: A local broker sends along these lists of "Bear Case" reasons why the stock market should now fall and "Bull Case" reasons why it will rise: Bear Case reasons: 40 months with no corrections, longest in history without a 10 percent drop; margin debt above 1987 high; record number of new stock offerings coming to market; dividend to stock price ratio at all-time low; recent utility drop a bear market signal; Fed threatens to raise interest rates; Clinton tax increase; John Templeton sold out, etc. Bull Case reasons: federal debt reduction; earnings exploding; worldwide economic recovery; mutual fund cash supply heavy and managers like to invest it in the stock market; banks and corporate balance sheets stronger; China opening vast new markets, etc. (For strategies to benefit from market "ups" and avoid potholes in "downs," watch for Ticker on Thursday)

LIGHTER SIDE: "There are two classes of economic forecasters: those who don't know and those who know they don't know." (John Kenneth Galbraith)

WHAT YOU SAY: "I thought I had it in 1993 with Dow 3,788 at year-end until the last 15 minutes before closing when the sell programs clicked in and the Dow closed at 3,754.09. For this year's final figure I'll predict 4,358" (A. B. Fadeley). . . "This is my first attempt at forecasting, but here goes with a little rhyme: Wishful thinking? Pie in the sky? I don't think so. The Dow will soar high. 4,343 is my guess." (J. A. Vaughn) . . . "I've entered every year since you so graciously conducted the contest; maybe this is 'the' year. My best shot is 4,189." (Bill Nies) . . . "I say 4,429; it will be a good year. I'm the world's oldest new stockbroker." (Alvin Freedman) . . . "Bills 41, Cowboys 35, My guess is 4,135." (Marlene Cohen) . . . "You sent me a runner-up book for '93; we'll have dinner in '94 for my guess of 4,320." (Ann Cramer.)

CONTEST NOTE: As we finish quoting from your contest postcards, my thanks to all of you who participated in our 1994 forecasting game. Although we received more postcards this January than in any recent year, my wife -- who helps me put your predictions in order -- commented recently, "I don't understand why having dinner with you is such a great attraction. I eat with you every night, and it's not a big deal."

MARCH WINDS: "March in Wall Street has historically been an 'up' month, with the S&P 500-stock average rising an average 1.1 percent over 43 years." (Stock Trader's Almanac) . . . T. Rowe Price Tax Free High Yield Fund is listed under "Top-Performing Bond Mutual Funds" in Kiplinger's Personal Finance magazine, March . . . Did you realize that Conrail's stock showed a total return (gain plus income) of 43 percent last year and has quadrupled since the firm went public in 1988? . . . "Based on the latest report on income from the Census Bureau, average annual earnings in 1992 for full-time male workers with advanced degrees -- a master's degree, doctorate or professional degree -- was about $64,000. That's $18,000 more than the average holder of only a college degree." (Business Week, Feb. 28)

WALL STREET WATCH: "Although rising interest rates can be the stock market's worst enemy, small-cap stocks can flourish during a period of modestly rising rates as long as the economy grows at a reasonable rate." (Investment Horizons) . . . "The Fed has established a different way of thinking toward rates, which we believe could lead to some negative surprises in the bond market in upcoming weeks." (The Marketarian Letter). . . "To be sure, the market is overdue for a traditional secondary correction, and a pullback in the Dow industrials of roughly 200-300 points from their peak of 3,978.36 would not be a surprise." (Dow Theory Forecasts) . . . "At this stage of the game, we prefer to concentrate in the market's laggard sectors: leveraged cyclicals, aggressive growth stocks and energy stocks." (Strategies and Insights)

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