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, 28 Oct 92 13:12:52 EST Message-ID: <1.1992Oct28.131253@AmeriCast.com> 10/28/92 TITLE Inside The Market Dow Off 8 As IBM And GM Are Weak, But Broad List Is Steady On 202 Million #m#Picture .....Walter Revis....#m# Leo Fasciocco The stock mark- et dropped slightly yesterday as a feeble morning rally try failed and weakness in International Business Machines Corp. con- tinued to weigh on the averages. The Dow Jones industrial aver- age slipped 8.38 points, or 0.26%, to 3235.73. Trading remained heavy at 202 million shares, up 7% from Monday. The broad list did better than the blue chips as losers edged gainers 901-to- 850. IBM slumped another 13/4 to 653/4, an 11-year low. The stock's weakness has been due to less-than-expected operating results for the third quarter and a poor outlook for personal computers and mainframes. The stock is yielding 7%. There has been concern IBM may reduce its dividend. General Motors Corp. lost 15/8 to 321/2. Its chairman, Robert Stempel, resigned Mon- day. Analysts expect GM to report a large loss for the third quarter of between $1.25 to $2 a share. That would compare with a deficit of $1.88 a share a year ago. The stock has retreated from a peak of 443/8 in June. The Standard & Poor's 500 index was up 0.08%. The Nasdaq composite index was off 0.33%. "The broad market held up well, and the NYSE composite index rose for the day," noted market analyst Walter Revis of Hamilton In- vestments in Chicago. "I like the market and feel the odds favor the Dow moving up as much as 10% before the end of the year." Revis is bullish because interest rates are relatively low and sentiment is extremely pessimistic. "The groups that tend to be wrong on market turns are bearish," said Revis. "Option traders and index futures traders are all pessimistic. It's amazing that pessimism is comparable to what it was after the big drop in October 1987, yet the market has not come down much." Revis also pointed out that in election years since World War II November has been the strongest month when the incumbent party's president loses. Revis believes stocks are the place to be through the first part of 1993. He feels the big recent sell-off - 104 Dow points intra- day on Monday three weeks ago - marked an important low. He favors small growth stocks over big-capitalization issues. In other trading, Royal Appliance Manufacturing Co. jumped 27/8 to 121/4 on 12 times normal daily volume. The maker of the Dirt De- vil vacuum cleaner reported a 34% drop in third-quarter earnings to 19 cents a share. But it was better than the 14 cents expected by the Street. The stock was as high as 31 in February but plum- meted to 8 in July when the company reported disappointing earn- ings. It was listed on the Big Board around the same time. Northern Telecom Ltd. leaped 21/8 to 37 on four times normal dai- ly volume. It posted a 10% increase in third-quarter earnings to 46 cents a share, exceeding Street expectations of a decline in net to 39 cents a share. Monsanto Co. climbed 21/4 to 54. It set plans to buy back 12 mil- lion shares. The stock was around 70 a year ago. Earnings are ex- pected to be down 26% this year but up 29% next year. Tandem Computers Inc. spurted 2 to 13 on 10 times average daily volume. It came in with a 733% improvement in fiscal fourth-quarter earn- ings to 25 cents a share. Prudential Securities was looking for 23 cents a share. The stock has been a dull performer with a Re- lative Strength of 43. Triton Energy Corp. pushed ahead 11/2 to 41. The rise was linked to positive comments from the company about a Colombian oil field in which it is a joint investor with British Petroleum PLC. and Total SA of France. Triton's stock has rallied from 26 four weeks ago. Vencor Inc.- added 1 to 321/2. It bought a hospital in Indianapolis. USLife Corp. rose 7/8 to 471/4 after lifting its quarterly dividend to 45 cents a share from 43 cents. Dow Jones & Co. gained 13/8 to 291/8. The stock had fallen 8 points the past two months. Earn- ings are expected to bounce back to $1.45 a share this year, dou- ble last year's. The stock has a large short interest outstanding equal to 10 times its average daily volume. Ferro Corp. fell 21/4 to 243/4. Kemper Securities Corp. lowered its rating on the stock, citing its the recent rise. Ferro has tripled in two years. Englehard Corp. dropped 11/4 to 311/2, yielding to profit-taking after doubling the past 12 months. It reported a 19% increase in third-quarter earnings, in line with estimates. PS Group Inc. tumbled 23/8 to 117/8. It reported a third-quarter loss and said it was in noncompliance with its loan agreement. Xerox Corp. declined 21/4 to 76. Analysts were disappointed with an 11% gain in third-quarter earnings to $1.18 a share. They ex- pected 1.24 a share. This article is copyright 1992 Investors Business Daily. Redis- tribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM