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: Tue, 17 Nov 92 12:53:40 EST Message-ID: <5.1992Nov17.125340@AmeriCast.com> 11/17/92 TITLE Inside The Market Dow Loses 27 As Airlines Take A Dive; UAL Sinks 51/8, Delta 33/4 And AMR 2 Leo Fasciocco The stock market declined yesterday as airline stocks took a nose dive after First Boston Corp. lowered its rating on the group. The Dow Jones in- dustrial average slumped 27.30, or 0.84%, to 3205.73. It fell 21 points in the first hour, rallied to trim its deficit to 10 at midday, but then faded in the afternoon. Trading declined 9% to 174 million shares. Losers led gainers 1,085 to 734. Among the airlines, UAL Corp. lost 51/8 to 1183/4, Delta Air Lines Inc. 33/4 to 531/4, AMR Corp. 2 to 631/4, British Airways PLC 21/2 to 405/8 and Southwest Airlines Inc. 7/8 to 251/4. First Boston re- moved its buy rating on most of the airlines and cut earnings projections for next year. It cited lower revenue expectations and the impact of a new accounting standard (FASB 106) applying to reserves for employee health benefits. The Standard & Poor's 500 index lost 0.41% and the Nasdaq composite index 0.49%. "The market looks tired," said Ed Nicoski, market strategist with Piper Jaffray & Hopwood Inc. in Minneapolis. "The decline in the airlines put a negative tone on the market. Also, equity markets in Britain and France were down. "Many portfolio managers have been taking money out of the Dow-type stocks and putting it into OTC issues. It's a pre-January effect as investors are anticipat- ing the OTC stocks doing better in January. The momentum players are all getting on the bandwangon of the OTC stocks, and the shorts are rushing to cover." But Nicoski is neutral. He sees the Dow moving lower and wonders how far the Nasdaq can push ahead before profit-taking sets in. In trading, John Alden Financial Corp. leaped 15/8 to 205/8. The Miami- based life insurance company went public seven weeks ago at 15. The stock has an Earnings Per Share rank of 99, the highest possible. Scott Stanton, vice president of investor re- lations, told Investor's Business Daily the company has been get- ting more coverage from the investment community. He said Ray Dirks Research recently put out a bullish report on the stock. He said Dirks projected the stock could rise to $35 a share next year and that earnings could climb from $2.83 a share last year to $3 a share this year and $3.50 a share in 1993. The forecast works out to increases of 6% and 17%. Stanton said the earnings forecast seemed a bit high. But he acknowledged that John Alden's managed-care operations are doing well and that the company is benefiting from less price competition. Impact from last summer's hurricanes was minimal, he said. Ionics Inc. jumped 13/4 to 593/4. The stock has been trending higher, but it met resistance at 60 last April and June. The water purification firm is expect- ed to show a 28% increase in earnings this year. Its Earnings Per Share rank is 96. Blockbuster Entertainment Corp., which has moved to new highs, added 3/4 to 17. It set up a joint venture with Virgin Retail Group Ltd. It gives Blockbuster a 50% stake in a chain of entertainment stores in Europe and Australia that sell tapes and videos. Blockbuster's stock is extended from a base breakout that occurred at 14 six weeks ago. Its Relative Strength is 83, up from 47 two months ago. It has a large short position outstanding, equal to 21 times average daily volume. Brinker International Inc. moved ahead 11/8 to 401/8. The operator of Chili's restaurants is part of a restaurant group that stands fifth among the 197 industries Investor's Business Daily ranks by six-month price action. The stock broke out of a base at 38 in September but failed. Yesterday's move cleared the base. Earnings have been growing at a 27% clip the past two years. Bryan Elliott of Robinson- Humphrey Co. said Brinker will make a presentation at an Alex. Brown & Sons conference this week. Elliott said he expects Brink- er to post a 25% increase in fiscal second-quarter earnings to 30 cents a share. MBIA Inc. moved ahead 11/8 to 603/4, a new high. The stock of the writer of municipal bond insurance has tripled since 1990. Yesterday's rise represented a breakout from a four- month base. The number of mutual funds holding the stock has tri- pled to 99 from 33 two years ago. Carter-Wallace Inc. surged 13/4 to 32. The stock has mediocre Relative Strength of 52 but a bullish "A" accumulation-distribution rating from Investor's Business Daily. Analyst Craig Dickson of Interstate-Johnson Lane Inc. said the rise in the stock looked like someone just wanted to buy it. If the medical-products company got some good news from the FDA, the stock would have shown much more volume, he said. Dickson does not regard the stock as an AIDS play although Carter controls more than half the condom market. Its condom business has shown only single-digit growth, he said, noting that the government gets its condoms from other sources. Nursing-home operator Living Centers America Inc. was ahead as much as 5/8 to a new high of 185/8 but then slipped and closed off 1/2 at 171/2. It said earnings for the fiscal fourth quarter ended Sept. 30 surged 63%, an acceleration from the 38% and 36% gains of the previous two quarters. The stock made its initial offering at 141/2 in February. 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