Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.ibd From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Inside The Market Date: Mon, 16 Nov 92 12:56:07 EST Message-ID: <13.1992Nov16.125608@AmeriCast.com> 11/16/92 TITLE Inside The Market Broad List Advances As Dow Retreats 7; Big-Cap Vs. Nasdaq Divergence Widens #m#Picture ...Michael Moody..........#m#Leo Fasciocco The stock market finished mixed Friday in active trading as the blue chips continued to flounder while the broad list showed strength. The Dow Jones industrial average fell 6.76 points, or 0.21%, to 3233.03. The Dow declined 8 points in the first half-hour and never rallied effectively. Big Board trading declined 15% to 192 million shares. The Dow has been trending sideways for three weeks. But the broad market as measured by the daily advance- decline line has been moving higher (see chart page 19). On Fri- day, gainers turned the tables on losers in the last hour to come out on top 922 to 839. "It's a two-tier market," said money manager Michael Moody of Moody, Lynn & Co. of Boston. "The Dow and Standard & Poor's 500 have been going sideways, while the OTC market has been in a roaring bull market." The Nasdaq composite index rose 0.44%, equal to 14 Dow points Friday. The Nasdaq has rallied 15% since September, a runup equal to 485 Dow points. The S&P 500 was down 0.1% Friday. "I wouldn't pay much attention to the general averages, but in- stead focus on stock picking, especially OTC issues" said Moody. "However, there are stocks that are overextended. I don't know how far the OTC rally will carry, but my guess is it will not correct much." Moody said strength in the broad market has sup- ported the Dow. "The market doesn't want to go down," he said. "Also, there's a fair amount of skepticism and a speculative blowoff stage has not been reached in the OTC market yet. I think the market is healthy." Moody manages $80 million. He had been only 60% or 70% invested in stocks in the summer, but has now raised that to 85% to 90%. His accounts had been down 8% but now are up an average of 4% to 5%. His most recent buys have been Jones Apparel Group Inc., Autozone Inc., Bed Bath and Beyond Inc., Phillips- Van Heusen Corp., Kronus Corp. and Juno Lighting Corp. Moody lightened up on Cisco Systems Inc. when the company reported earnings. He felt the stock was extended and wanted to sell into the good news. His other successful positions are BMC Software Inc and Progress Software Inc. In Big Board action, Promus Cos. advanced 11/2 to 423/4. Its Harrah's unit won a bidding battle to develop a casino complex and riverboat casino at Vicksburg, Miss. The stock is a leader with a Relative Strength of 91. Earnings are expected to soar 55% this year and 39% next year. C.R. Bard Inc. surged 21/2 to 331/2, a technical breakout from an 11-week base. Trading was triple normal daily volume. The produc- er of medical products has shown an acceleration in earnings growth the past three quarters from 23% to 26% to 38%. PHP Healthcare Corp.- leaped 13/4 to 141/4. The HMO won a $14.7 million contract from the Army. Analysts are looking for a 47% increase in earnings for the fiscal year ending April 30. The stock was listed on the NYSE in August. Kohl's Corp. picked up 1 to 301/2. The Midwest department- store chain has been a hot new issue, soaring from an initial price of 14 in May. The stock has a Relative Strength of 97. Net income for the fiscal year ending Aug. 31 is expected to be up 13%. Ar- izona homebuilder UDC Universal Development L.P. spurted 1 to 8 on double normal daily volume. Analysts are looking for a big re- bound in the company's earnings next year to 85 cents a share from an expected 10 cents a share this year. H&R Block Inc. picked up 11/8 to 391/4 after setting plans to buy back three million shares. H.J. Heinz & Co.- added 3/4 to 401/4. Prudential Securities Inc. put out a buy. Warner Insurance Services Inc. shot ahead 13/8 to 13 on five times normal daily volume. The processor of auto insurance claims has shown strong earnings gains the past three quarters. The stock has doubled in five months. Chubb Corp. moved up 7/8 to hit a new high and close at 873/4. But trading was light. The stock's Relative Strength has improved to 79 from 66 two weeks ago. Earnings are expected to be down slightly this year, but then improve by 6% next year. Life insurer NWNL Cos. rose 15/8 during the session but then pulled back to close up 3/4 at 415/8. Five weeks ago, the holding firm for Northwestern National Life completed an offering at $36 a share. Earnings growth is project- ed to improve to 19% next year from an expected 9% this year. Humana Inc. was bruised for a 4-point loss to 197/8. The hospital firm said it will not pay any dividends after its regular 221/2- cent quarterly payment in February. It took the action because of its plan to split into two firms. Atlantic Richfield Co. slumped 31/2 to 1081/2. Dean Witter Reynolds Inc. made bearish comments on the stock, noting fourth-quarter earnings will be under Wall Street estimates of $1.98 a share due to higher expenses and weakness in chemicals. This article is copyright 1992 Investors Business Daily. Redis- tribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM