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 Wed, Nov 4 1992 Date: Wed, 4 Nov 92 05:08:35 EST Message-ID: 11-04 0000 DECISIONLINE: Personal Investing USA TODAY Update Nov. 4, 1992 Source: USA TODAY:Gannett National Information Network DRUG STOCKS FACE BLEAK FUTURE: Once the cream of American industry and quintessential growth stocks, drug companies are facing a future growing bleaker by the day. President-elect Bill Clinton is mad about rising health-care costs and are pressuring drug companies to slash prices. After riding top drug stocks higher at an average 25%-a-year clip 1988 through last year, investors are bailing out. UTILITY FUNDS MAY BE SLIPPING: Utility stock mutual funds have been wired for growth, but a strengthening economy may pull the plug on them. Utility funds were the best performing stock fund the three months ended September, rising 4.9% while the average stock fund finished the quarter up 2.8%. In today's low-interest-rate environment, the siren song of high dividends is irresistible to investors. RALLY MAY LAST: Investors may recall December-January rallies each of the last two years and wonder if it's happening again, though a little earlier. Jack Shaughnessy, research director at Advest, says "odds are pretty good" that is what's going on. He thinks this year-end rally will be long lived, with the Dow pushing as high as 3600 over six months. BROKERAGE SAYS EARNINGS INSPIRE: A.G. Edwards says it doesn't matter who won the presidential election. Corporate earnings continue to rebound and the economy is set for recovery, the brokerage concludes in a recent report. Falling short-term rates typically take as long as two years to work. "The slow decline in rates in 1989 and 1990 probably doomed the economy to slow recovery in 1991 and 1992," says the report. FEDEX STOCK IS UP: Anyone buying stock in Federal Express lately has had good company, and good luck. CEO Federick Smith bought 500,000 shares for $18.6 million, or $37.33 a share, in early October. The stock, buoyed by bullish analyst commend mid-October, closed Tuesday at $45 1:2. Tom Galvin, a portfolio manager at Forstmann-Leff Associates, says the CEO's confidence boosted stocks. FEDEX GETS BUY RATING: Federal Express has gotten good words over the last few weeks. Analysts at Morgan Stanley and Donaldson Lufkin Jenrette have issued buy recommendations. DLJ analyst Paul Schlesinger believes the company is getting its troubled European operations under control and already is benefiting from an improving economy. His target for the stock: $80 in two years; $100 in three years. RETAIL STOCKS PICK UP SPEED: Retailing stocks picked up momentum in October and toy stocks have been hot most of the year. But Christmas may not be as rewarding as investors hope. Consumers intend to spend 3.3% less on gifts this holiday season, according to a survey of 500 adults taken last month by Fairfield Research. Personal computers, VCRs and video game components should move fairly well. STOCKS QUIETLY RALLY: On the way to the election, stocks staged a quiet but broad rally that is bound to attract attention now that the economy is over. Since Oct. 9, the Dow Jones industrial average is up 3.7%; Standard & Poor's 500, 4.3%; the NASDAQ composite, 6%. Investors may recall December-January rallies each of the last two years. Industry experts suggest that's what is happening, just early. GET MOVING ON ECONOMY NOW: Economists have some advice for Bill Clinton. Top suggestion: Don't wait for Inauguration Day. The economy needs a healthy dose of confidence right now, and there's no better medicine than a clear signal that the president-elect will stick with the programs he sold to voters. That means calling now for talks this month with Congressional leaders about legislation. ECONOMY CONTINUES TO WEAKEN: The government's chief economic forecasting gauge showed a weaker economy for the second straight month in September, the Commerce Department said Tuesday, signaling that the economy will remain weak well into next year. The index of leading economic indicators, used to forecast economic activity three to sixth months ahead, fell 0.3% in both September and August. EX-BROKER AGREES TO TESTIFY: A former broker accused of being involved in a stock manipulation and securities fraud scheme has agreed to cooperate with the Securities and Exchange Commission. Richard Puccio once was employed by Stratton Oakmont Inc., the firm the SEC is investigating. Puccio settled the SEC complaint against him Tuesday without admitting or denying guilt. FIRM CALLED `BOILER ROOM': The Securities and Exchange Commission said Tuesday that former broker Charles Puccio would testify in its case against Stratton Oakmont Inc. Stratton and some of its executives and employees were the target of an SEC complaint that claimed the firm was a boiler room operation that violated securities fraud laws by misrepresentation, illegal sales and manipulation of common stock. GOLD LOWER, SILVER MIXED: Gold prices closed lower Tuesday. On the New York Commodity Exchange, gold bullion for current delivery settled at $337.50 a troy ounce, down $2.40 from Monday. Republic National Bank said gold fell $1.05 an ounce to $337.75. Silver prices were mixed. On New York's Comex, silver bullion settled at $3.772 a troy ounce, down from $3.781 on Monday. In London: $3.79 from $3.77. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3252.48 Wednesday after closing down 9.73 Tuesday. The New York Stock Exchange composite opens at 231.24, down 1.24. The American Stock Exchange market value opens at 382.83, up 0.13. The NASDAQ OTC composite opens at 604.58, down 2.99. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Wednesday. It opens at 0.6454 British pounds, down from 0.6538; 5.3010 French francs, down from 5.3170; 1.5645 German marks, down from 1.5698; and 122.15 Japanese yen, down from 123.64. (As of 3 p.m. Tuesday. 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. 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