Quiet day ends with Dow up by 6.79 points

The Ticker

August 09, 1994|By Julis Westheimer

Watching for a possible rise in interest rates, Wall Street spent yesterday quietly waiting for a decisive reason to move. The Dow industrials ended the day 6.79 points higher at 3,753.81, buoyed partly by signs of a stronger economy and expectations of higher corporate earnings. Volume was light on the New York Stock Exchange, with 217.7 million shares traded compared with 230.2 million shares on Friday.

Speaking of stocks, Myron Oppenheimer, vice president for investments, NationsBank, says, "Earnings expectations continue to drive individual stocks. Looking back: mild disappointments caused sharp drops but positive surprises did not send stocks higher. Other adverse factors were rising commodity prices, the inflation specter and a weak U.S. dollar. On the brighter side, we expect further earnings growth, even if the U.S. economy grows more slowly than in the past few quarters." For a 12-page color brochure, with charts and graphs, call Mr. Oppenheimer at 244-6569.

HOPEFULLY HELPFUL (1): "If you received a penalty notice for underpaying your 1993 taxes and were subject to the new 36 percent or 39.6 percent brackets, don't automatically pay the bill, says Research Institute of America. People who underpaid taxes because of the higher federal rates should not have been penalized. Yet because of a computer glitch, taxpayers in this category who also did not opt to pay the increase in three annual installments may have been sent a penalty notice. Complete and return Form 2210 to have the charge waived." (Business Week, Aug. 8.)

HOPEFULLY HELPFUL (2): "Most people who buy life insurance are not aware that they have up to 10 days after the policy arrives in the mail to cancel it -- and receive a full refund. Many buyers just file away the policy as soon as it arrives. Better strategy: Use the 10 days to discuss with friends, experts and even other agents whether you have made the right decision." (James Hunt, director, National Insurance Consumer Organization.)

CAVEAT EMPTOR: "Many people believe that mutual funds bought from a bank are federally insured. In a survey by the Securities & Exchange Commission, 28 percent of heads of households thought that bank-bought funds were protected just like their savings accounts and CDs are. They are not." (Alexandra Armstrong, financial planner and co-author, "On Your Own: A Widow's Guide to Emotional and Financial Well-Being.")

YOUR MONEY: How can you be richer one year from now? Bill Donoghue, publisher of Donoghue's MoneyLetter, gives this advice: "(1) Pay down your credit cards. (2) Pay yourself first, namely, realize that if you can live on your present salary, you can also live on 95 percent of it. Save 5 percent through an automatic payroll deduction program with your bank or mutual fund. (3) Boost your withholding to reflect your home mortgage expense. (4) Refinance your old mortgage. (5) Maximize contributions to your 401(k) plan. (6) Don't overlook your Individual Retirement Account (IRA) for tax free compounding of your money."

NOTES & QUOTES: The Kiplinger Washington Letter says that there is not enough support in Congress for an employer-mandate provision, and that employers will not be required to buy insurance for their employees. The same letter says higher tobacco taxes are a certainty, and will be finalized at approximately 45 cents a pack . . . "Your risk of losing money in mutual fund mischief is very low, but it is not zero. Don't let your guard down," says a Forbes, Aug. 15 story titled, "Foxes in the Henhouse." The article warns, "You can delegate stock picking to a professional, but you darned well better know something about that professional."

BUSINESS BEAT: A reader sends in, "Why Business is Bad." Excerpts: "January -- people spent their cash for Christmas. February -- Everybody's in Florida. March -- Too cold and rainy. April -- Everybody's preoccupied with taxes. May -- Too much rain; farmers distressed. June -- Too little rain; farmers distressed. July -- Heat has everybody down. August -- Everybody away on vacation. September -- Everybody's broke from vacation. October -- Customers waiting for fall clearance sales. November -- People upset over elections. December -- Customers need their money for the holidays."

BITS & PIECES: Legg Mason's August "Investor's Dozen," with several changes since last month's list, consists of Alberto Culver, Dial, DSC Communications, Kranzco Realty Trust, MCI Communications, National Convenience Stores, Premier Bancorp, Rhodes, Inc., Standard Federal Bank, Telefonos de Mexico, USF&G and Waban. Call Gerald Scheinker (486-8010) for the full letter . . . Unhappily, Bethlehem Steel stock is listed under "Falling Stars" in S&P Outlook, Aug. 3 . . . Bell Atlantic, which serves this area, appears under "Recommended Total-Return Issues" in the same Outlook . . . Coming in Thursday's Ticker: A full list of public utility stocks, ranked by quality.

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