Market loses previous day's gains

The Ticker

May 12, 1994|By Julius Westhiemer

Dragged down by what one local broker called a "disastrous" bond market, stocks suffered a medium-sized loss yesterday and erased all of Tuesday's gain. The Dow Jones industrial average slumped 27.37 points, closing at 3,629.04, and now stands 349 points below its all-time high.

But to keep things in perspective, I looked back and found that one year ago today the Dow closed at 3,482.31. Even after sharp recent declines, the blue-chip indicator is still ahead 146 points in 12 months.

WHERE FROM HERE? Of all the newsletters, commentaries, etc., that I read early this week, about 65 percent were bearish (gloomy). Samples of both sides: "What we're seeing now is the very early stage of an absolutely massive movement back into cash." (Richard Russell's Dow Theory Letter) . . . "The next wave down will be far more severe than any over the last four years." (The Jerry Favors Analysis) . . . "Both the stock market and gold stocks will present low-risk buying opportunities in the very near term." (Gold Stock Technician) . . . "Why should you listen to bearish commentators who have been wrong for years but suddenly seem right for a few weeks?" (Laszlo Birinyi, consultant, in Forbes, May 9.)

HOPEFULLY HELPFUL: "The bond market's rout gives Treasury yields a tempting spread over measly bank-interest rates." (Barron's, May 9, in an article, "Rising Rates Are Making Treasury Bonds Attractive Lures For Small Investors Again.") Ticker Note: For data on Treasury bond issues, call your broker or the Baltimore Federal Reserve branch at (410) 576-3553 . . . "Utility stocks have taken a beating, and for good reasons. But for these 10 companies the selling may have gone too far: BCE (Formerly Bell Canada), British Telecom, China Light & Power, CMS Energy, DPL, DQE, Entergy, Nipsco Industries, PacifiCorp and Peco Energy." (Christopher Wiles, manager of Federated Investors' utility funds.)

YOU TAKE CONTROL: "Taking Control of a Job Interview" is worthwhile reading in this week's (May 8-14) issue of The National Business Employment Weekly. Excerpts: "Come to each interview with an action plan. Before the interview begins, describe your expectations for the meeting . . . Don't leave the interview without knowing where you stand. Ask, 'Based on a scale of zero to 10, what are my chances of getting hired?' . . . Realize that most interviewers don't tell it like it is. They present grandiose, blue-sky dreams because they want to fill positions. Make them be specific. For example, if an interviewer says, 'You'll make a fortune with us,' ask, 'When you say a fortune, what exactly must I do to make it and what does a fortune mean?' "

LOCAL NOTES: Legg Mason's new buy list includes American Pacific, First Alabama Bancshares, Harcourt General, Kranzco Realty Trust, MCI Communications, NEXTEL Communications, Peoples Heritage Financial Group, Shawmut National, Sierra Pacific, Spectravision and Telefonos de Mexico . . . Tomorrow night, Owings Mills-based "Wall Street Week With Louis Rukeyser" features Stan Weinstein, editor and publisher of The Professional Tape Reader, on the topic "The Tale of The Tape," with panelists Alan Bond, Bernadette Murphy and Carter Randall . . . Baltimore Bancorp, Super Rite and Columbia Real Estate stocks reached 12-month highs recently; Baltimore Gas & Electric, Delmarva Power & Light, Giant Food, Legg Mason, Potomac Electric Power, Washington Homes and Town & Country slipped to yearly lows.

WHO'S IN CHARGE? "After portfolio managers Tom Conlin and Mary Kay Bourbulas left SteinRoe's High Yield Municipal Fund to run the Strong Municipal Bond Fund, the fortunes of the two funds reversed. SteinRoe's, which had ranked in the top quartile for national muni funds for four years running, sank into the bottom 2 percent in 1992, while Strong's anemic fund leapt into the top 1 percent -- and is still way ahead of SteinRoe's.

This is one example of why it's important to know the face behind the fund. Choosing a fund based on long-term performance and investment strategy is sound, but if the manager responsible for those happy returns bolts, you could end up with a dud." ("You Have to Know Who's Calling the Shots" in Business Week, May 16.)

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