Local investors shun the seesaw Few liquidate holdings, though queries flood investment houses

July 17, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Because of inaccurate information supplied to The Sun, a figure for redemptions and transfers from T. Rowe Price Associates Inc.'s mutual funds in an article in yesterday's editions was inaccurate. The actual figure was roughly $40 million, or 0.1 percent of the firm's mutual fund assets.

The Sun regrets the error.

Baltimore-area investors hung tough for the most part yesterday, despite Wall Street's seesaw ride that at one point saw the Dow Jones industrial average drop more than 160 points.

Although few liquidated their accounts or displayed signs of panic, transactional volumes were up markedly as jittery investors shifted capital out of mutual funds and into safer investments such as money market accounts, according to a survey of local brokerage houses.

FOR THE RECORD - CORRECTION

"More people have been in today for market information than for normal business," said Doug Meyer, a T. Rowe Price Associates Inc. representative in the mutual fund giant's 100 E. Pratt St. retail investor center. "But surprisingly, not a lot of people are worried. There have been very few liquidations. People are moving money rather than getting out, and more people are calling to try to get a feel for trends."

In all, T. Rowe Price investors shifted $560 million -- or 1 percent of its $56 billion worth of mutual funds assets -- out of equity mutual funds yesterday, said Rowena Itchon, a T. Rowe Price spokeswoman. That activity reversed a $170 million influx thus far in July, a figure that Itchon said kept pace with May and June.

While there was little sign of turbulence at the investor center, the phone lines and computers at T. Rowe Price and other investment houses were jammed with calls and trading orders.

At Charles Schwab & Co. Inc.'s Charles Street office, centralized computers tracking market data were slowed by the unusually high trading volume.

"Our call centers are swamped with activity," said Matthew F. Curry, a Charles Schwab vice president and branch manager, as the market rebounded from a 165-point deficit at noon to climb ahead 15 points at 2: 45 p.m. "And a lot more people are stopping in to glance at the market's activity."

Nationwide, Charles Schwab's four "call centers" were expected receive 140,000 calls yesterday, after getting 103,000 calls the day before, when the market plunged 161 points and lost nearly 3 percent of its value in the fourth-worst trading day in history. By comparison, an average day's calls total 87,000.

Those calls translated into $129 million worth of net outflow of capital from Schwab's mutual funds, a majority of the $200 million sold this month but still a fraction of the firm's total $70 billion in assets, Curry said.

Meanwhile, in Charles Schwab's lobby, stockholder Bob Gunn calmly punched ticker symbols into a computer and looked for stock casualties as a board overhead flashed NYSE stock prices.

"I'm not particularly worried, it's just something you have to tough out," said Gunn, who said his portfolio includes such blue chips as Coca-Cola, Motorola, General Electric and Exxon. "No one is getting away with anything, though."

T. Rowe Price's telephone lines also got a workout, as investors placed nearly 40 percent more calls to the firm's 800 trading number than the normal 13,000, after receiving 16,000 calls on Monday, Itchon said.

Investors didn't limit their inquiries to brokerages, though. The Sun's Sundial line, which on average receives 6,600 calls regarding stocks in a 24-hour period, had 6,500 calls by 5 p.m., after the Dow Jones had closed up 9.25 points.

That volume came on the heels of 8,191 calls Monday, said Karen Stabley, the newspaper's director of new business development.

Good day at Legg Mason

But not everyone had such a bad day. At Legg Mason Wood Walker Inc., 800 number investors shifted a paltry $60,000 into money market accounts from mutual funds, while investor moves through brokers actually put money into mutual funds, to the tune of $5 million.

"It's hard psychologically, but the intelligent thing to do in a market downturn is be a buyer," said Tal Daley, vice president and director of Legg Mason Funds Marketing, which controls the investment house's mutual funds.

"But our strategy is to be a little contrarian. Maybe we're a little masochistic, but we've found that there are bargains to be had when a market panics."

Pub Date: 7/17/96

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