While the market was falling, some stocks were climbing

The Ticker

October 30, 1998|By Julius Westheimer

DO ALL STOCKS decline in a down market?" A funny thing happened on the way to this bear market," says Smart Money. "Some stocks actually went up. Telephone and utility stocks have performed best, issues like Bell South Corp. and DTE Energy Co. Many 'defensive' issues moved higher as the Dow Jones average plunged."

Defensive stocks are those of companies providing services or products that people virtually require, such as medicine, electricity and telephone service.

Today's S&P price-earnings ratio stands at 26.7 times earnings, compared with a 24.3 PE one year ago; 16 times earnings is considered normal. Dividend yields have slipped from 1.56 percent to 1.49 percent, near a record low.

Want to buy inflation-indexed savings bonds with a modest amount of money? Unlike the inflation-adjusted Treasury bonds, these savings bonds are available from $50 to $5,000. They pay a fixed rate of interest and a supplemental inflation-adjusted rate every six months. Interest is exempt from state and local income taxes.

"The economic conditions that fostered the bull market have almost run their course." (Bank Credit Analyst.)

"Double-digit gains we've had in this bull market are not sustainable in the long run." (Jeremy Siegel, finance professor, Wharton School of Business.)

"The rally looks good, but remember that bear market rallies often do." (Yale Hirsch, financial writer.)

Pub Date: 10/30/98

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