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Subject: Inside the Market
Date: Wed, 11 Nov 92 12:52:31 EST
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11/11/92


TITLE Inside the Market Investors Rotate Out Of The Blue Chips;

Dow Is Off 15 But Broad List Moves Up

Lisa Lee Freeman The stock market closed mixed in heavy trading
yesterday as investors dumped their blue chips for more specula-
tive issues.

The Dow Jones industrial average closed at 3225.47, down 15.40
points, or 0.48%. But advances topped declines 6-to-5. Volume
swelled 13% to 222 million shares. The Standard & Poor's 500-
stock index rose 0.01% and the Nasdaq soared 0.92%.  Most of the
selling in the Dow came late in the session and focused on three
issues, noted Philip Roth, chief technical market analyst at Dean
Witter Reynolds Inc.  International Business Machines Corp. set
the tone, dropping 15/8 to 657/8 -erasing its gain from the pre-
vious session. International Paper Co. also shed 15/8 and closed
at 631/8, while Du Pont Co. lost 11/2 to 461/2.  The broad mark-
et, Roth said, was strong. "People were just becoming more ag-
gressive, moving money out of blue chips and cyclicals and into
the glamour growth stocks," including software developers and
biotechnology issues.  Fresh data showing inflation still under
control helped the market, Roth also noted.  Although the market
hasn't shown a strong conviction toward the upside in the past
couple of days, it's likely headed in that direction, said Mary
Farrell, market strategist at PaineWebber Inc.  Bill Clinton's
victory could give a surprising boost to consumer confidence, she
thinks. "The electorate wanted change, and they got change," Far-
rell said, adding that a loosening of consumer purse strings
could mean better-than-expected fourth-quarter earnings.

She also noted that the uplifting "January effect" on stocks has
been coming earlier each year, "so we could be modestly higher
between here and year-end." In trading, Motorola Inc. jumped 4 to
1013/8 - a new closing high. The company held a technology meet-
ing yesterday that whetted investor appetites.  At the gathering,
"Motorola focused on the great potential for the company in the
market for the wireless communication of data and how it will
benefit from an explosion in the wireless market," said Oppenhei-
mer & Co. analyst Lior#m#cq#m# Bregman.

Motorola has been trending higher all year on strength in the
semiconductor business and a slow recovery in the communications
business, noted Bregman. But the meeting has turned investors'
attention to the company's "lesser known" wireless data-
communications business, Bregman said.  Investors also were en-
couraged by a favorable chip book-to-bill ratio in October, said
Kidder, Peabody & Co. analyst Jonathan Joseph. It was the strong-
est October number since 1983, he explained, with orders up 41%
from a year earlier vs. a 15-year average growth rate of 15%.
Texas Instruments Inc., another major producer of chips that's
been gaining momentum all year, added 17/8 to 513/4 on the book-
to-bill figure, said Joseph. Also, Micron Technology Inc. 13/4 to
221/8 and Nasdaq issue Intel Corp. 5/8 to 697/8. Trading was ac-
tive in all three.

U.S. Surgical Inc., up 13/4 on Monday, added 23/4 to 651/2 in the
shadow of a billion-dollar deal between rival Johnson & Johnson
and Voluntary Hospitals of America Inc. Investors had feared the
supply pact would take business away from U.S. Surgical. But
analysts believe the company will be able to retain its market
share in the minimally invasive surgery market.  Health-care pro-
vider NovaCare Inc.- , which is attempting for the second time
this year to rebound from a sharp slump, added 27/8 to 217/8. On
Monday, the company announced three acquisitions.  Investors pum-
meled by a sell-off in Diagnostek Inc. finally got some relief.
The stock, down 63/4 the previous outing, recouped a point to
101/8.  The heavy selling started late Friday when Diagnostek
dropped 13/8 ahead prior to Monday's news that a merger deal with
Medco Containment Services Corp. is now being reconsidered. Also
on Monday, Diagnostek said it would have to restate its earnings
due to errors in inventory and customer refund data.  Ionics
Inc.-
 spurted 33/8 to 575/8 on nearly four times its normal turnover.
Raymond James & Associates Inc. repeated its buy rating, saying
it expects the water purification company to earn $2.35 to $2.40
a share in 1993.

Jones Apparel Group Inc. leaped to 23/8 to a new high of 391/4.
The maker of women's apparel has been trending higher since May,
when it dipped below 24.  North American Mortgage Co., which came
public four months ago at 111/2 a share, rose a point to 163/4 on
a flurry of loan application activity. The company said October
applications jumped 110% to more than $2 billion. It attributed
the results to lower interest rates and market share gains.
Another mortgage company that came public last summer, Fleet
Mortgage Group Inc., gained 11/8 to 20.  Gold stocks continued to
lose ground along with the price of the metal, which has slid $6
in two days. Newmont Mining Corp.- , down 13/4 on Monday, melted
another 23/4 to 401/2. American Barrick 11/4 to 281/2 and Newmont
Gold Co. 21/8 to 321/2. Newmont Gold was down 25/8 in the prior
session. Kemper Securities Inc. downgraded several issues in the
gold group.

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