Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.invest,americast.usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Fri, Sep 4 1992 Date: Fri, 4 Sep 92 04:34:27 EDT Message-ID: 09-04 0000 DECISIONLINE: Personal Investing USA TODAY Update Sept. 4-7, 1992 Source: USA TODAY:Gannett National Information Network ANALYSTS SEE GRIM STOCK FUTURE: Many people are wondering what's ahead for stocks in the face of a sloppy economy, a possible Clinton win and a skidding dollar. Two pros say watch out; the rest of the year could be a dog. Even mildly bullish analysts are flashing warning signals. The bears predict a slide in the Dow to the 300-3100 range before year-end. Some see much bigger declines in a host of stocks. (For more, see special Forecast package below.) PRICE WAR DROPS GAP: War isn't pretty, even when it's only over blue jeans. Gap, a star player among retailers, posted only modest revenue gains last month because of a price war among denim retailers. Goldman, Sachs analyst Joseph Ellis trimmed his earnings estimate for Gap to $1.60 a share from $1.70 and his third-quarter forecast to 46 cents a share from 51 cents. BRITISH AIRWAYS TAKES OFF: British Airwayscontinues to fly high with investors. The international airline's American depository receipts rose 2 1:8 to $49 5:8 after it said Thursday that August passenger traffic was up 14% from last year. BA stock has risen 10% the past week. Airline analyst Kevin Murphy of Morgan Stanley says travel stocks in Europe are benefiting from recent rallies of U.S. transportation stocks. PROFITS ATTRACT ANALYSTS: Investors are interested in British Airways because it is one of the few airlines that has posted profits the past two years. Last year, British Airways had net income of $444 million. Analysts say reports Thursday of British Airways' plans to buy a stake in French regional carrier, Transport Aerien Transregional have little to do with the surge. DOW COULD DROP TO 3000: Many analysists say the Dow number investors ought to keep an eye out for is 3181.35, the Dow's closing low in early April. If it breaks below that, they say, the Dow's in for a quick drop to 3000. The Dow could easily drop to 3050 before the new year, and rallies will only be slight. S&P SIGNALS BIG DOW DROP: James Kennedy of Divergence Systems, an institutional technical service, bases his stock market analysis on cash flows - the amounts of money going in and out of Standard & Poor 500 stocks. He said Thursday the market, as measured by the S&P 500, is in the process of testing its high of 425.09. He sees the 500 starting a decline of about 50 points - or 400 if you were looking at the Dow. M2 DIPS: A closely watched measure of the money supply fell the week ended Aug. 24. M2 dropped $3.7 billion to a seasonally adjusted $3.464 trillion. M2 is cash, deposits in savings and checking accounts and money-market mutual funds. M2 has grown at an annual rate of 1.3% this year, well below the Fed's target of 2.5% to 6.5%. Weak money-supply growth is a drag on the economy. GOLD, SILVER UP: Gold prices rebounded moderately as hints of higher inflation and economic improvement filtered through financial markets. Silver also advanced. Gold for October delivery rose $2.30 on the Commodity Exchange to $341.70. On the Comex, silver bullion for current delivery settled at $3.723, up from $3.692. Silver bullion rose in London to $3.73 from $3.71. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens at 3290.31 Friday after closing up 24.05 Thursday. The New York Stock Exchange composite opens at 230.01, up 0.99. The American Stock Exchange market value opens at 382.74, up 1.29. The NASDAQ OTC composite opens at 571.25, up 5.64. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Friday. It opens at 0.5005 British pounds, up from 0.5003; 4.7545 French francs, up from 4.7520; 1.3958 German marks, up from 1.3940; and 123.37 Japanese yen, up from 123.15. (As of 3 p.m. Thursday. Source: First American Bank of New York.) SPECIAL PACKAGE ON FORECAST: TECHNICAL TRENDS POINT DOWNWARD: Technicians are those folks who chart volume and price trends of stocks and market indexes to ferret the likely course of stock prices. Two surveyed by USA Today had pretty bad news concerning their forecasts. "The trend is not your friend; the trend is a downtrend," says Mark Leibovit, publisher of Volume Reversal Survey, "Sure you can still trade, but it's risky." SUMMER RALLY COULD BE OVER: Ralph Acampora, Prudential Securities' technical guru, also is jittery. He is bugged by the failure of stocks to show follow-through sizzle in the face of a super-bond market; failure of the Dow to accompany the Standard & Poor's 500 index to a record high in early August; and the Dow's break Aug. 13 belw its June '92 low of 3242. Acampora figures the summer rally is over. ELECTION COULD DOOM MARKET: An even broader implication, Acampora says: The market bets George Bush won't be re-elected. If it's right, he says, it's bad news for stocks. His rationale: A Prudential Securities analysis, dating back to 1912, of what happened to the market - that's between its summer peak and year end - when an incumbent President lost. That occurred eight time, and in six cases stocks fell. (end of package.) ADVISORY: Decisionlines will not be published Monday, Sept. 7, in observance of Labor Day. Decisionlines will resume publication on Tuesday, Sept. 8. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing editor: Martin Baucom. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM