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: Wed, 18 Nov 92 12:51:16 EST Message-ID: <11.1992Nov18.125116@AmeriCast.com> 11/18/92 TITLE Inside The Market Dow Off 12 As Volume Rises To 186 Mil; Genesco, Nike Pace A Strong Shoe Group Leo Fasciocco The stock market declined modestly yesterday in more-active trading as profit-taking crept in late in the ses- sion. The Dow Jones industrial average slipped 12.42 points, or 0.39%, to 3193.30. The Dow traded in a single-digit range most of the day but then sold off in the late afternoon. The broad list, which has been doing better than the Dow recently, showed losers beating gainers 1,017 to 779. Trading rose 7% to 186 million shares. "The Dow has been in a trading range, and now it's mov- ing to the lower end around 3180," said market analyst Jack Solo- mon of Bear, Stearns & Co. "I don't expect a wide-open break. I think we're just seeing some profit-taking and rotation. "People get optimistic when the Dow moves to the upper end of its range and pessimistic when it moves to the lower end. I think this ac- tion will remove some of the complacency and set the market up for a year-end rally that will carry the Standard & Poor's 500 index to a new high." The S&P 500 index lost 1.41, or 0.34%, to 419.27. Its record is 425.27. The Nasdaq composite index slumped 1.09% to 627.07. Solomon expects the Nasdaq to hit a new high this year, too. Shoe stocks were on the move. Genesco Inc. rose 7/8 to 83/4 on ten times normal daily volume. The maker of shoes reported a 250% surge in third-quarter earnings to 21 cents a share, exceeding by a wide margin Street consensus estimates of 11 cents a share. Analyst J. Garry Dennis of J.C. Bradford & Co. said he was looking for 9 cents a share from Genesco. He said the gains were due to increased sales, especially from boots and soccer shoes via its Mitre unit in the U.K. Dennis said he ex- pects fourth-quarter results of nine to 12 cents a share vs. six cents a year ago. It can't be assumed the big third-period gain will repeat this quarter, he said. He also said new president Doug Grindstaff - found via an executive search - has done an im- pressive job. The analyst projected that Genesco has potential annual earning power of 85 cents a share in a few years. The com- pany operates Johnston and Murphy shoe stores. Dennis rates Genesco's stock as accumulate. The issue has a Relative Strength of 87. It emerged from an eight-week consolidation area last week at 71/2 on rising volume. Insiders were buyers of the stock in the second and third quarters when it was around 6. Athletic shoe maker Nike Inc. climbed 11/4 to a new high closing at 871/4. The stock has run up 32 points in five months. Over the past several years, insiders have shown a successful pattern of sel- ling at intermediate-term tops in the stock. In this quarter, insiders dumped 230,000 shares in the high 70s in September and October, a bearish development. They were also big sellers when the stock made peaks at 70 in January, 55 in March of 1991, 46 in July 1990 and 36 in September 1989. Wolverine Worldwide Inc., which makes Hush Puppies, rose 1/8 to 12 on four times normal daily volume. The stock appears to have turned the corner from a bottom at 73/4 in August. The issue has a bullish "A" accumulation-distribution rating from Investor's Business Daily. Jim Lovejoy, vice president corporate communications, said the stock's rise has been due to Wall Street's notice of the firm's plans to sell its money losing Brooks unit. It makes athletic shoes and accounts for 20% of sales. Lovejoy said Brooks has a good product but was overwhelmed by competitors like Nike. The sale is expected to close by the end of the year. He also dis- closed the company will cut expenses by $3 million next year. "The last eight weeks our sales have increased 8% in factory outlets and 5% for speciality stores, a turnaround from the dec- lining trend in sales," said Lovejoy. "That was due to an aggres- sive direct-mail campaign. "We had a loss the past three quarters but expect a profit in the fourth quarter and a strong year in 1993 with earnings of "at least $1 a share." Textron Inc. drove ahead 13/8 to reach a new high at 401/2 on four times its normal daily volume. PaineWebber Group said the stock appeared attractive. The brokerage is projecting a 15% in- crease in earnings this year to $3.95 a share - five cents more than consensus Street estimates. Next year, it's looking for $4.35 a share. Dial Corp. rose 3/8 to 397/8, near its 52-week high, on triple normal daily volume. The firm, formerly Greyhound Corp., runs hotels and airport restaurants and also makes buses. Earnings growh has accelerated the past three quarters from 10% to 12% to 24%. King World Productions Inc. jumped 15/8 to 303/8. The syndicator of television's "Jeopardy!" and "Wheel of Fortune" game shows and the "Opray Winfrey Show" reported a 6% increase in fiscal fourth-quarter earnings, in line with Street estimates. The stock got a boost from a recommendation from Oppenheimer & Co. It emerged from a 10-month basing formation at 27 four weeks ago. Seagull Energy Corp. surged 23/8 to 321/2, a 52-week high on eight times average daily volume. It agreed to buy Arkla Corp.'s exploration unit for $402 million. Seagull's stock, with a Relative Strength of 72, has been trending higher from 22 the past eight months. Enhance Financial Services Group Inc. gained 7/8 to 20. The reinsurer of debt securities went public at 181/4 in February. This article is copyright 1992 Investors Business Daily. 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