Dow recoups nearly half of last week's loss


September 29, 1994|By JULIUS WESTHEIMER

Stocks, bonds and the dollar posted modest gains yesterday, following the Federal Reserve's decision not to raise interest rates on Tuesday. The Dow Jones industrial average, up 15.14 points to close at 3,878.18, has added 46 points this week, erasing almost half of last week's loss. The closely watched index now stands exactly 100 points, or 2.5 percent, below its all-time high.

GLOOMY PARALLEL: "Read this from the Wall Street Journal: 'The news of the day has been big financially, and promises to get bigger. Recent headlines said a great oil merger was imminent, along with a huge steel merger. There have been bank mergers, chemical mergers, gas mergers, lots of takeovers, acquisitions, etc., all involving billions of dollars. While things like this are going on, one could hardly expect a bear market.' That appeared in the Journal on Sept. 20, 1929, about six weeks before the blockbuster stock market crash that set off the Great Depression." (The Granville Letter)

NOW, SOME CHEER: "The bull market that began in the midst of the Persian Gulf conflict in 1990 is still alive. We've seen a new buy signal for U.S. stocks following a temporary five-month sell signal." (Fabian's Investment Research) . . . "It would not surprise me at all to see this market make a new all-time high before year-end." (Pro Trade) . . . "The sentiment and technical backgrounds to the market are more reminiscent of a new bull cycle than an aging one." (Mercer Forecast)

CAREER CORNER: National Business Employment Weekly, Sept. 25-Oct. 1, runs two helpful articles. Under "Job Market Improves For Engineers," the story says, in part, "After a long, painful lull in demand caused by defense industry cutbacks, the recession and widespread company downsizings, the job market for engineers finally is on the upswing. . . . In the Southeast, the demand has risen 70 percent. . . . As many new mini-mills open, one strong niche is primary metallurgical engineering." A long chart, "1994 Median Salaries for Engineers," accompanies the story.

SECOND CAREERS: Under "How To Have Two or More Careers Simultaneously," another NBEW article reads, "Many professionals are starting second careers while continuing their current positions . . . More executives are using their free time to gain skills in an entirely new field . . . Ideally, your parallel career should complement your personal history and turn your dreams into a reality . . . Although you devote less time to the second or parallel career, it shouldn't be viewed as a part-time, moonlighting or temporary position . . . Keep your second career private at work . . . It's never too late to start a parallel career."

TAX TIP: "Because this year is slipping away, do as much as possible to save on your 1994 taxes. For example, consider deferring income into 1995. Negotiate with your employer to receive some of your income next year. You cannot defer regular paychecks, but bonuses or commissions can be pushed back. This deferral can generally apply to year-end bonuses or other special compensation. Your employer can still deduct the amount this year if the company is on the accrual method of accounting." (Tax Hotline, Sept.)

OCTOBER OUTLOOK: Looking ahead, here are the biggest hits taken by the Dow Jones industrial average since 1926. Note how many plunges took place in October. Here are the percentage declines: Oct. 19, 1987 -- 22.6 percent; Oct. 28, 1929 -- 12.8; Oct. 29, 1929 -- 11.7; Nov. 6, 1929 -- 9.9; Aug. 12, 1932 -- 8.4; Oct. 26, 1987 -- 8.0; July 21, 1933 -- 7.8; Oct. 18, 1937 -- 7.8; Oct. 5, 1932 -- 7.2 and Sept. 24, 1931 -- 7.1. As the Wall Street Journal said recently, "September historically is the worst month for stocks, but October has provided the biggest daily losses."

WOMAN'S ANGLE: "Women should use 'I' more instead of 'we' in describing their work. Downplaying your role implies that your contribution is not significant . . . Don't start talking with "um," or speak haltingly . . . Don't sound like a follower when you're a leader, and in meetings don't solicit others' opinions before explaining your stand . . . Practice bragging about yourself; there's an art to delivering good news about yourself gracefully . . . State your point of view unequivocally -- no waffling." (Working Woman, Oct.)

MONTH-END MEMOS: "An investment of $10,000 with Warren Buffett, CEO of Berkshire Hathaway, in 1956 is now worth $80 million (no misprint), in an era when the Dow Jones industrial average rose about sixfold." ("Of Permanent Value: the Story of Warren Buffett," by Andrew Kilpatrick) . . . "Asked to name the investment that brought the best returns over the past 30 years, only 36 percent correctly chose stocks; over 40 percent picked fixed-income investments, such as CDs and bonds. Also, many investors believe stocks are riskier than they really are, but over every 20-year period since 1926, stocks have never lost money." (Money, Oct.)

LAST LINES: Tomorrow night, "Wall Street Week With Louis Rukeyser" is entitled, "Investing Around the World," with guest Thomas Robinson, manager of international investments for FTC Merrill, Lynch and panelists Mary Farrell, Louis Holland and Robert Stovall . . . Next Thursday, we will list the names of the leaders in our Dow Jones forecasting contest as of Sept. 30.

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