Path: bloom-picayune.mit.edu!enterpoop.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, 24 Nov 92 12:40:58 EST Message-ID: <6.1992Nov24.124058@AmeriCast.com> Lines: 94 11/24/92 TITLE Inside The Market Dow Loses 4, S&P 500 Backs Off High Despite Gains In GE And Westinghouse Leo Fasciocco The stock market closed lower yesterday despite strength in blue chips Gen- eral Electric Co. and Westinghouse Electric Corp., which dis- closed a major restructuring. The Standard & Poor's 500 index, which set a new high Friday, declined 1.53, or 0.36%, to 425.12. The broad list showed losers outnumbering gainers 953 to 813. The popular Dow Jones industrial average, which has been lagging, lost 4.32, or 0.13%, to 3223.04. It was down 10 points in the first half-hour, managed to rally and get ahead a few points by midday, but then slipped back again. Dow component Westinghouse Electric jumped 23/8 to 121/8. It said it will divest its finan- cial services and certain non-strategic operations and move to reduce debt by $5 billion in two years. It also said it'll take a $1.3 billion charge and lower its dividend. There were reports First Boston Corp. put out a buy on Westinghouse. However, analyst Martin Sankey, in response to an inquiry by Investor's Business Daily, declined to comment. Another analyst who follows the stock said the restructuring news was "a positive" and ex- pected by some. Technically, Westinghouse's stock has been in a downtrend since topping at 38 two years ago. Last week, it plunged 31/2 points on the heaviest weekly volume in more than five years. The action would indicate a climactic sell-off, set- ting up a bottom. But the stock will probably need to do more consolidating before it is positioned to move significantly higher. On a more bullish note, General Electric drove ahead 21/8 to 821/8, a new high and a breakout from an 11-month base. The move came on double average daily volume. The stock's strong showing was triggered by GE's agreeing to sell its aerospace business to Martin Marietta Corp. for $3.05 billion in cash and convertible preferred stock. Martin Marietta's stock surged 55/8 to 631/4. International Business Machines Corp.- rose 11/8 to 633/8. Eastman Kodak Co. added 11/8 to 413/8. It sold its Estek Products Division to ADE Corp. The Eastman unit is small. It makes equipment to check for bad silicon wafers. Most of the other blue chips were weak, especially the oils. Exxon Corp.- fell 1 to 593/4, Chevron Corp. 7/8 to 687/8 and Texaco Inc. 7/8 to 60. Market analyst Larry Wachtel described the day as "a low-key breathing spell for the broad list." He said the troops lagged while the generals tried to come on - referring to the gains in some of the blue chips. "The rise in Westinghouse and IBM shows that there is some bargain-hunting going on out there," said Wachtel. "I don't see anything of a negative nature and think the market's momentum to the upside is still there. Season- ally, the Thanksgiving weak is bullish." Brilliance China Auto, up 15/8 Friday, added 11/8, reached a new high and closed at 30 in heavy trading. The company makes mini- buses in China and is half-owned by the government of China. It has been a strong new issue, having been floated at 16 eight weeks ago. There has been talk that First Boston's Nick Colas may issue a report on the stock. First Boston was the lead under- writer. Colas could not be reached for comment. Sources say if a brokerage report is issued, it may not be that bullish since the stock has run up quite a bit. But those who like the stock think it's underfollowed and that it will eventually draw institutional interest when more information is disclosed. Another China play, Hong Kong Telecommunications Ltd. climbed 1 to 383/8 on triple average daily volume. Bear, Stearns & Co. analyst Kenneth Leon is bullish on the stock, having recommended it at 353/4 four weeks ago. He told Investor's Business Daily the stock should reach the mid-40s in the next 12 months. Hong Kong Telecom is China's telecommunications gateway to the world, he said. He likes the stock because of its liquidity and the predictability of its earnings, which should be up 10% to 12% the next several years. Xtra Corp.- , a lessor of piggyback trailers, surged 31/4 to 503/8 on an eightfold rise in average daily volume. The move was a breakout of an eight-week base into new high ground. Xtra said Wertheim Schroder & Co. put out a "positive report." No details were available. Xtra was highlighted in Investor's Business Daily's "Industries in the News" section in July, when it was 353/8. The company has shown an acceleration in earnings growth the past three quarters from 43% to 131% to 173%. The gains are due to lower capital spending, cost-cutting and the benefits of lower interest rates. The stock has an EPS rank of 95, insiders have been buyers the past six months and none sellers, and there is a large short interest outstanding. Earnings for the year should be up 77%. Jackpot Enterprises Inc. rose 3/4 to 193/8, a new high, on six times average daily volume. Stan Weinstein, edi- tor of the Professional Tape Reader market letter from Hollywood, Fla., recommended the stock. Weinstein uses only technical analysis and favors issues breaking out of bases, which Jackpot did Friday when it spurted 13/4 on six times normal daily volume. Jackpot gets 90% of its revenues from the operation of slot machines. It also owns two small casinos in Nevada. 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