Path: bloom-picayune.mit.edu!snorkelwacker.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, Oct 30 1992 Date: Fri, 30 Oct 92 09:37:04 EST Message-ID: 10-30 0000 DECISIONLINE: Personal Investing USA TODAY Update Oct. 30-Nov.1, 1992 Source: USA TODAY:Gannett National Information Network APPAREL STOCKS LOOK GOOD: One thing is certain: Whoever wins the presidency Tuesday will be under fire to heat up the economy. So the clothing business, a drab investment this year, soon could be back in fashion. Apparel industry trackers are saying the right picks will bring stylish gains of 14% to 85% the next 12 months. Underscoring it: Retail revenue is perking up and many apparel stocks are cheap. FRUIT OF THE LOOM IS KING: Deborah Bronston of Prudential Securities, Wall Street's top apparel analyst, feels a number of clothier stocks make sense. Her single best idea is underwear king Fruit of the Loom. She sees their earnings rising 15% to 17% a year in the three to five years beyond next year. Her turnaround pick is Hartmarx, the troubled men's clothier. She predicts profits for the low-priced retailer. MAJOR STOCKS LOOK GHOSTLY: The stocks in the Dow Jones Industrial Average are looking pretty scary this Halloween. Many are but phantoms of their former selves. Look at IBM, which reached $175 7:8 in 1987 and closed Thursday at $66. It's as if Wall Street ripped masks off leading companies and found rotting flesh. GM, IBM and Westinghouse all have taken one-time charges and suffered quarterly losses. DOW OFF 5% SINCE JUNE PEAK: The Dow Jones Industrial Average has retreated 5% since its June 1 peak. The most blood has been drawn from General Motors and Westinghouse, both off about 25%. The Dow has gained just over 2% this year. A chart of the Dow's movements through the year "looks like the EKG of a pet rock," says investment strategist William LeFevre. DOW WILL COME AROUND: Although the Dow Jones industrial has been flat for a long time, investors who can stomach some risk might want to pick up some Dow stocks, says Fred Gordon, editor of Plain Talk Investor newsletter. He sees good buys in many, including GM and Boeing. The question is not if the Dow will recover but when. Still it's essential the next president lay out a credible economic policy early on. WALL STREET HIRES Ph.D.S: In the 1980s, Wall Street seduced many of the country's brightest young M.B.A.s into hunting for takeover targets. Enter the 1990s, and brokerages are again plundering a valuable academic resource - hiring top young Ph.D.s to concoct math-intensive trading strategies rather than apply their skills to science. One reason: the proliferation derivative products which are complex. FOREIGN INVESTORS BACK OFF: Stocks have done OK so far in the '90s. The Dow Jones industrial average is up 17% in less than three years. But the return likely would have been far greater if foreign investors had not lost interest in U.S. stocks. Foreigners have sold $8 billion more stock in U.S. companies than they have bought so far this decade, says the Securities Industry Association. TYCO IS TOPS IN TOYS: Christmas toys are getting ready to move and Paul Valentine, toy analyst at Standard & Poor's knows what's in store. Tyco Toys, which makes Crash Dummies and a California Roller Blade doll. Toy stocks such as Mattel (which has a roller-blade doll that supposedly doesn't move as well), Hasbro, Fisher-Price and Tyco have doubled or tripled the past two years. His top pick: Tyco. BOND FUNDS LOSE INVESTORS: For the first time in three years, bond mutual funds have stopped attracting buckets of cash. In fact, investors may have pulled out more money than they put in this month. Fidelity Investments is seeing a net outflow from bond funds. Spokesman Michael Hines says investors are shifting into money market and stock funds. Hardest hit are high-yield corporate junk bond funds. UAL POSTS RARE PROFIT: Despite fare wars this summer that caused many other airlines losses, United Airlines' parent UAL posted a third-quarter profit. Net income was $22 million or 89 cents a share, down from $25 million or $1.05 a share a year earlier. Analysts said UAL's cost controls enabled the better-than-expected results. But United warned of a weak Asian market because of Japan's sluggish economy. RICH GET RICHER: The USA's wealth became more concentrated in the nation's richest households in the 1980s, a study by the liberal Economic Policy Institute says. The study says 55% of the $2.6 trillion increase in family wealth from 1983 to 1989 was in the top 0.5% of households. Meanwhile, lower income families lost $256 billion dollars of wealth. The study says wealth is net assets minus debt. GOLD UP, SILVER DOWN: Gold prices rose Thursday in trading on the New York Commodity Exchange. Gold bullion for current delivery settled at $339.50 a troy ounce, up 10 cents from Wednesday. Republic National Bank quoted a late bid for gold of $340 an ounce, up $1.15. On New York's Comex, silver bullion for current delivery settled at $3.752 a troy ounce, down from $3.757 late Wednesday. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3246.27 Friday after closing down 5.13 Thursday. The New York Stock Exchange composite opens at 231.42, up 0.51. The American Stock Exchange market value opens at 381.29, up 2.29. The NASDAQ OTC composite opens at 605.82, up 4.43. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mostly down on Friday. It opens at 0.6355 British pounds, down from 0.6371; 5.2070 French francs, down from 5.2430; 1.5357 German marks, down from 1.5445; and 123.16 Japanese yen, up from 122.70. (As of 3 p.m. Thursday. Source: First American Bank of New York.) 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