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: Thu, 19 Nov 92 13:26:44 EST Message-ID: <8.1992Nov19.132644@AmeriCast.com> 11/19/92 TITLE Inside The Market Oil Stocks Help Fuel Dow's Gain Of 14; Metal, Apparel And Gaming Issues Rise Leo Fasciocco The stock market rose broadly yesterday as oils lifted the Dow Jones indus- trial average while apparel and gaming issues did well in the broader market. The Dow advanced 14.05 points, or 0.44%, to finish at 3207.37. It was flat in the morning but rallied in the afternoon. Trading rose 18% to 219 million shares. Of the Dow oils, Exxon Corp. rose 11/4 to 60, Texaco Inc. 7/8 to 60 and Chevron Corp. 3/4 to 69. The move appeared to reflect bargain-hunting after the group's decline the past two months. The international oils have been laggards. Blue chip Aluminum Co. of America rose 11/8 to 651/4 among metals on the move. Reynolds Metals Co. added 11/8 to 491/8 and Phelps Dodge Corp. 11/4 to 431/2. The broad market had a strong day as winners trounced losers 1,176 to 626. The Standard & Poor's 500 index pushed ahead 0.85% and the Nasdaq composite index 1.24%. "Despite a seemingly choppy Dow, the broad market is doing signi- ficantly better," said Norman Yu, who runs his own firm in Newport Beach, Calif. "If the Dow were to break below its Oct. 9 low of 3136, I doubt it would be confirmed by volume. Instead, I would expect it to hold near that area." Yu said the Dow indus- trials' weakness is not reflecting technical distribution but earnings weakness in components such as International Business Machines Corp., General Motors Corp., United Technologies Corp. and Westinghouse Electric Corp. Yu manages around $200 million and is bullish. He sees a Dow of 4000 next year because of in- creased demand for stocks from individuals, pension funds and other institutions. His favorite stocks are Harley Davidson Inc., Circus Circus Enterprises Inc., Federal National Mortgage Association, Philip Morris Cos., Nike Inc., Parametric Technology Corp., Cisco Systems Inc. and LDDS Communications Inc. Textile apparel stocks continued to do well. VF Corp., maker of Lee and Wrangler jeans, moved ahead 7/8 to hit a new high and close at 543/4. The stock moved out of a three-month base at 50 four weeks ago and has been acting strong. Its Relative Strength line has confirmed its move into new-high ground. Analyst Eileen Gormley of Pershing Research in Jersey City, N.J., said VF is benefiting from the return to basics like jeans and T-shirts. It's also making the most of "just-in-time" delivery methods that cut inventory and get products to stores more quick- ly. Gormley rates VF a long-term buy. Analyst Bruce Vogenitz of Widmann, Siff & Co. in Bryn Mawr, Pa., said the stock's runup from 15 in late 1990 was due to the fact it was "wildly under- valued." Vogenitz expects VF to get to 60 this year and then track the general market next year. The company's earnings have been growing at a 40% clip the past four quarters. The gains re- flect increased sales of jeans and an improvement in profits from its Vanity Fare lingerie line. For the fourth quarter, Vogenitz is looking for VF to earn around $1 a share against 83 cents a share last year, a gain of 20%. For the year, that works out to $3.80 a share vs. $2.75 last year. Other textile apparel stocks are pushing toward their highs and have a solid Relative Strength rankings. Phillips-Van Heusen Corp has an RS of 82, Chaus Bernard Inc. 92 and Jones Apparel Corp. 89. Philips- rose 1/4 to 273/4 and Jones 1/2 to 383/4, while Chaus- was off 1/8 at 81/8. Two Big Board apparel issues that went public recently are doing very well. Authentic Fitness Corp. off 1/8 at 22 Tuesday, has soared from its offering price of 14 in June - a gain of 57%. Its Relative Strength is 92. The company sells Speedo brand swimwear. Earnings for the most recent quarter were up 67%. Tommy Hilfiger Corp. went public at 15 nine weeks ago. The stock of the maker of mens shirts spurted 11/8 to 251/8, a new high. Analysts are projecting a 25% increase in earnings for the fiscal year ending March 31. Gormley said the companies are showing better earnings because retail sales are improving, consumer op- timism is returning and raw material costs have stabilized. Hotel-casino stocks rose sharply after Morgan Stanley Group Inc. recommended three issues: Mirage Resorts Inc., Caesars World Inc. and Circus Circus. Mirage jumped 17/8 to 327/8, Caesars 2 to 391/4 and Circus 13/8 to 561/4. However, the stars of the gaming group are not the big-name casinos but the lesser-known players, especially International Game Technology Corp., which surged 2 to 477/8. It's moved into the riverboat gambling business. The stock has a Relative Strength of 95. Earnings have soared an average of 100% the past six quarters. Also rallying are Jackpot Enter- prises Inc., WMS Industries Inc. Promus Cos. and GTech Holdings Corp. The RS of Jackpot is 93, WMS 82, Promus 93 and GTech 95. The RS of Caesars is 75, Mirage 69 and Circus 88. Watkins- John- son Co., which makes military and space electronics, leaped 21/8 to 13 on 14 times normal daily volume. The stock was recommended by PaineWebber Group Inc. On Monday, the stock shot ahead 11/8 on a 239% increase in trading volume. This article is copyright 1992 Investors Business Daily. Redis- tribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. 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