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Subject: Inside The Market
Date: Thu, 5 Nov 92 12:43:43 EST
Message-ID: <2.1992Nov5.124344@AmeriCast.com>

11/5/92


TITLE Inside The Market Dow Drops 29 After Victory By Clinton;

Pfizer Off 21/4, Warner 11/2 As Drugs Fall

#m#Picture ...Michael Metz..#m# Leo Fasciocco The stock market,
showing weakness in the drug sector, fell sharply yesterday fol-
lowing the election of Arkansas Gov. Bill Clinton as president.
The Dow Jones industrial average declined 29.48 points, or 0.91%,
to 3223.04. The Dow rallied 16 points in the first half hour but
sold off later in the morning and was down 14. In the final hour,
selling accelerated again.  Historically, the stock market has a
bearish bias on the day following the presidential election.
Since 1928, it's fallen 63% of the time with the average loss be-
ing 0.55%, or 18 Dow points at current levels.  Trading contract-
ed 7% to 194 million shares. The Standard & Poor's 500-stock in-
dex dropped 0.67%, but the Nasdaq composite index showed a diver-
gence, rising 0.16%.

"The stock market's decline was to be expected since a Clinton
win was already discounted," said market analyst Michael Metz of
Oppenheimer & Co. "The good news was out - if one was in favor of
an activist government."

The broad market showed losers outnumbering gainers 1,003 to 713.

Drug stocks took a hit as Bristol-Myers Squibb Corp. declined 2
to 661/8, Eli Lilly & Co. 11/2 to 615/8, Pfizer Inc.-
 21/4 to 743/8, Schering-Plough Corp. 11/2 to 605/8, Warner- Lam-
bert Inc. 11/2 to 67 and American Home Products Corp.-
 17/8 to 663/8.  Metz said the decline in the drugs was due to
Clinton's emphasizing his plan to lower drug costs. "I don't ex-
pect Draconian measures by Clinton," he continued. "I would be a
buyer of the drug stocks on pullbacks." The market watcher says
he expects the Dow to correct back to 3150. However, he sees it
continuing to move back and forth in a trading range with 3400 at
the upper-end of the range.

Metz said looming in the background is the probability of
"heightened unrest" in Russia. "We could see a disorderly change
in the government in Russia with Boris Yeltsin being ousted. A
Russian government council will meet Dec. 1. I would rate the
chances of change in Russia taking place soon at 90%." Metz said
an upheaval would help the underpinnings of the U.S. dollar and
stock market as investors fled to the relative safety of the U.S.
from European markets.  Elsewhere in trading, cellular stocks
were strong after American Telephone & Telegraph Co. said it will
buy a 33% stake in McCaw Cellular Communications Inc. AT&T de-
clined 5/8 to 423/4.  McCaw leaped 21/8 to 263/4 in Nasdaq trad-
ing. Lin Broadcasting Corp., 52% of which is owned by McCaw,
drove ahead 21/8 to 68. Among NYSE cellular stocks, Vodafone Inc.
spurted 35/8 to 611/2, Pacific Telesis Corp. 11/8 to 41 and Cen-
tel Corp. 11/2 to 345/8.  Century Telephone Enterprises Inc.
surged 21/2 to 385/8 after reporting a 50% increase in third-
quarter earnings, an acceleration in growth from the 47%, 43% and
19% gains of the past three quarters. The stock has an Earnings
Per Share rank of 92.  Shoney's Inc. jumped 21/4 to 221/2. The
restaurant firm was recommended by A.G. Edwards Inc. Shoney's
also said it settled a race discrimination suit by allocating
payment of $105 million. Trading swelled to 1.5 million shares,
six times average.  The stock has been in a downtrend since peak-
ing at 271/4 in February. It has a large short interest outstand-
ing, equal to 11 times normal volume. Analysts forecast a 22%
gain in earnings for the fiscal year, which ended Oct. 30.  Ca-
bletron Systems Inc. climbed 21/8 to 71, a new high. The maker of
computer network systems has been a leading stock with a Relative
Strength of 88. It has made a tenfold move in the past three
years.  Federal Express Corp. advanced 13/4 to 471/4 in light
trading. The stock's Relative Strength has improved to 65 from 28
five weeks ago. It's a turnaround play. Analysts are looking for
a profit of $2.30 a share for the fiscal year ending May 30, con-
trasted with a loss of $2.11 a share a year ago.  Nucor Corp.
picked up 1 to 631/8 and Oregon Steel Mills Inc. 5/8 to 211/8.
The companies are planning a joint venture to build a $400 mil-
lion sheet metal plant.  McDonnell Douglas Corp. rose 7/8 to
541/4. It won a $10 million to $15 million government contract to
build a shield for an experimental thermonuclear reactor.  Lowe's
Cos. moved ahead 7/8 to 201/8. Salomon Brothers Inc. issued a buy
on the stock, which has been a dull performer with a Relative
Strength of 48. Analysts expect the retailer of building materi-
als to show an increase in earnings for the fiscal year ending
Jan. 30 to $1.10 a share from nine cents a year ago, which in-
cluded a charge.  Jacobs Engineering Group Inc.-
 dropped 21/8 to 275/8. It reported a 17% increase in fiscal
fourth- quarter earnings, in line with Street estimates. The
sell-off appeared to be profit-taking following the stock's
nine-point advance the past three months.

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