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: Wed, 25 Nov 92 12:57:53 EST Message-ID: <6.1992Nov25.125753@AmeriCast.com> Lines: 108 11/25/92 TITLE Inside The Market Dow Soars 26, Volume Hits 242 Million; Value Health Up 41/8 Following Meeting Leo Fasciocco Stocks surged yesterday, spearheaded by buying of blue chip issues and encouraged by a lift in consumer confidence. The Dow Jones industrial average advanced 25.66 points, or 0.8%, to close at 3248.70. The Dow is 165 points from its all-time closing high of 3413. Trading rose 25% to a heavy 242 million shares. International Business Machines Corp. led the blue chips by gaining 13/4 to 65. Although the stock moved higher, it is a bro- ken issue that is now trading under its intermediate-term 50-day moving average line and its longer-term 200-day line. International Paper Co. moved up 13/8 to 623/8, Aluminum Co. of America- 1 to 671/2 and Minnesota Mining & Manufacturing Co. 11/4 to 1013/4. The better-performing Standard & Poor's 500 index climbed 2.47, or 0.58%, to reach a record 427.59. The Nasdaq composite index surged 1.11% to hit a new high closing at 645.94. Advances led declines 1,122 to 702. Railroad stocks were on the move. Union Pacific Corp. rumbled ahead 1 to 581/4 and hit a new high. Merrill Lynch & Co. put out an intermediate-term buy on the stock. The issue emerged from a five-month base about five weeks ago at 55. It has been acting well, showing increased volume on up days. It has a bullish "B" accumulation- distribution rating from Investor's Business Daily. CSX Corp. gained 15/8 to 681/4, Consolidated Rail Corp. 11/8 to 447/8 and Norfolk Southern Corp. 11/4 to 625/8. "The stock market was helped by a consumer confidence report which was mildly positive," said market analyst Eugene Peroni Jr. of Janney Montgomery Scott Inc. in Philadelphia. "The advance re- flected a slight shift in investor hopes for an economic recovery." Near-term, Peroni looks for the Dow to trade in a 3170-to-3260 range. A move over 3260 would give the Dow a chance to test its high in the 3400 area, he said. The recent strength of the Nasdaq seems to reflect a year-end rally and the early impact of the "January effect," which gen- erally causes Over-The-Counter stocks to do better than large- capitalization issues. But Peroni is concerned about speculation in the OTC market and the fact many high Relative Strength stocks are extended in price. His advice to clients is to be selective and patient, and not to chase rallies. Medical stocks did well. Value Health Inc. soared 41/8 to 391/2, but trading was light. William McBride, executive vice president, told Investor's Busi- ness Daily he knew no reason for the rise. McBride did note the company filed for an offering of 3 million shares and made a presentation this week to its investment bank- ers - Smith Barney, Harris Upham & Co. and Lehman Brothers. Nothing was said at the meeting that McBride thought would send the stock up. He said the offering is set for Dec. 14. Proceeds will go to the company and be used for general corporate purposes and acquisitions. The company's specialty managed- care businesses are doing fine, he said. Value Health's stock was listed on the NYSE Nov. 18. It was first issued at 8 in April 1991 in the OTC market and has since made a fourfold move. It has a Relative Strength of 95. The stock broke out of a base at 26 in September and now appears extended in price. McBride said most of the float is held by institutions. McBride agreed with analysts' estimates that earnings this year will be around 55 cents a share, up 38% from a year ago. Next year, the Street is forecasting a 45% jump in profits. Becton Dickinson & Co. shot ahead 13/8 to 791/4 and reached a 52-week high. It voted a 2-for-1 stock split and increased its quarterly dividend 10%. The move carried the stock out of four- month consolidation area. Trading expanded to triple normal daily volume. Foundation Health Corp. hit a new high by rising 7/8 to 437/8. After Monday's close, the company said it modified a health con- tract associated with military families that will provide reve- nues of $28 million. The stock is a leader with a Relative Strength of 92. Fleetwood Enterprises Inc.- jumped 13/4 to 42 on 630,700 shares, five times its average dai- ly volume. It reported a 70% surge in earnings for the fiscal second quarter ended Oct. 25 to 68 cents a share, which topped the Street's consensus estimate of 57 cents. Analyst Barbara Allen of Oppenheimer & Co. said it was an ex- tremely strong quarter for Fleetwood with margins reaching 20%, exceeding her estimates. For the fiscal year, she said, Fleetwood should earn $2.40 a share and may even exceed that by 5 to 10 cents. That would compare with $1.76 a share last year. For fis- cal 1994, Allen's projecting $3.15 a share. Allen said Fleetwood's stock has reached her target price in the low 40s, so she lowered her rating to "market performer" based purely on price. She said the stock could carry to its previous high of 48, but she is comfortable that the stock has reached a reasonable valuation. Albertson's Inc. shot ahead 23/8 to 487/8, on five times nomal daily volume. The move was a breakout from a ten-week consolida- tion area. The supermarket chain reported a slightly better- than-expected 20% increase in fiscal third-quarter earnings. This article is copyright 1992 Investors Business Daily. 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