Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Mon, Mar 9 1992 Date: Mon, 9 Mar 92 05:46:24 EST Message-ID: 03-09 0000 DECISIONLINE: Personal Investing USA TODAY Update March 9, 1992 Source: USA TODAY:Gannett National Information Network STALL COULD STICK: The stock market stall that began in mid-January could stick for a few months. Investors are struggling to shift from buying stocks because of falling interest rates to buying because of an economic recovery. That's why the stock market has been so jerky the past eight weeks - without making any significant move up or down. "Stocks are in a quagmire here," says stock trader Ken Sheinberg. (For more, see special Market package below.) STOCKS OFF ON JOBS REPORT: The Dow Jones average of 30 industrials lost 46.07 points last week as stock prices fell for the third straight session Friday. The Dow fell 19.90 points to 3,221.60 Friday on news that the nation's unemployment rate rose 0.2% in February to 7.3%. Declining issues outnumbered advances 1,087 to 610 on the New York Stock Exchange, where volume came to an estimated 185.04 million shares. XOMA MAY BE FOR SALE: Biotech firm XOMA has been exploring the possible sale of part or all of the company with Pfizer or Johnson & Johnson or both, USA TODAY columnist Dan Dorfman reports Monday. Any deal must await Food and Drug Administration approval to XOMA's E-5 drug. XOMA CEO Steve Mendell says he's discussed a range of alternatives involving XOMA with various companies. But he wouldn't identify them. BULL SEES STOCK AT $50: One ongoing XOMA bull is James McCamant, editor of the Medical Technology Stock Letter. He predicts approval of E-5 by midyear. He sees the same for a XOMA drug to treat a disease involving bone-marrow transplants. His stock outlook for XOMA: Any FDA approval of E-5 should result in a fast 50% gain in XOMA shares. His '93 goal: $50. XOMA closed at $22 1:4 Friday, down 1:2. FREDDIE MAC TO SELL STOCK: Shares of the Federal Home Loan Mortgage Corp. soared 7 1:4 to $120 Friday after the federally sponsored housing company said it will sell its stock directly to the public for the first time. Freddie Mac's board approved issuing as much as $750 million in preferred stock to be traded on the New York Stock Exchange. Previously, only federally insured S&Ls sold shares to the public. LEAF-TOBACCO PLAYERS PITCHED: Money manager Peter Vlachos pitches leaf-tobacco players - companies that buy, process and sell tobacco to makers of cigarettes and related products. His top pick: Dibrell Bros. "Fewer smokers in the U.S. doesn't mean diddly," says Vlachos, head of New York's Austin Investment Management. Foreign demand, he says, is growing and will offset any U.S. declines. DRIBELL SEEN RISING 25%: Leaf-tobacco player Dibrell Bro.'s excites money manager Peter Vlachos because of its big foreign business. Also, it has paid a cash dividend every year since 1925. He sees earnings rising 20% a year the next three to five years. His stock goal: A 25% rise in a year from $35 1:4 Friday. His other picks, pegged as 15% to 20% gainers in a year: Universal ($28), Standard Commercial ($27 3:8). REGAL CEO SEES EARNINGS GAIN: Arthur Toll, CEO of Regal Communications, a player in the 900-number industry which entered the infomercial business last year with the purchase of Synchronol, says his company is going to get a boost from its new segment. Toll estimates earnings of 50 cents a share in the fiscal year ending Sept. 30. Last year, minus Synchronol, it earned 27 cents a share on revenue of $18 million. INSTITUTIONS LOW ON CASH: Institutional investors are looking for stocks to soar further despite the market's mediocre showing this year. The evidence: Institutional cash reserves, as measured by Indata, fell to 3.9% at the end of February - lowest since it began monitoring the numbers in 1980. Reserves at year-end 1991 were 4.7%. Indata tracks 1,322 stock portfolios, with assets totaling $226.7 billion. GOLD DOWN, SILVER UP: Gold prices moved modestly lower Friday. On the Commodity Exchange in New York, gold bullion for current delivery closed at $349.50 a troy ounce, $1.90 lower than Thursday's settlement price. Republic National Bank quoted a bid of $349.25 for a troy ounce of gold as of 4 p.m. EDT, down $2.20. On New York's Comex, silver bullion settled at $4.152 a troy ounce, up from $4.133 Thursday. SPECIAL PACKAGE ON MARKET: RISING RATES STOP RUN: After falling through December, interest rates began to edge up the second week of January. The stock rally that started Dec. 20, the day the Federal Reserve cut the discount rate to 3.5%, stopped soon after rates turned higher. At 3221.60 Friday, the Dow is only 53 points above where it began the year. Since Jan. 14, the Dow hasn't closed below 3221 or above 3291 - a range of 70 points. TRANSITION NEVER SMOOTH: Because investors' emotions swing between hopes of a recovery and worries over rising rates, the shift from a falling-rates rally to an economic-recovery rally is never smooth. "The transition from one to the other is marked by some sort of correction," says Robert Doll, stock-research director at Oppenheimer Management. He thinks stocks will fall 5% or so from the peak to close to 3100. TIME TO BUY IS NOW: Doll is among many who say investors should focus on prospects for a recovery and not worry about short-term problems caused by a slight rise in interest rates. By the time proof of an earnings rebound arrives - most likely when second-quarter earnings reports begin to appear in July - there's a good chance many stocks will be much higher. "This isn't a time to sit on your hands," Doll says. (End of package.) DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Monday at 3221.60, after closing down 19.90 points Friday. The New York Stock Exchange composite opens at 223.79, down 1.13. The American Stock Exchange market value opens at 407.95, down 2.29. The NASDAQ OTC composite opens at 615.95, down 6.02. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing Editor: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. 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