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, Nov 6 1992 Date: Fri, 6 Nov 92 05:29:35 EST Message-ID: 11-06 0000 DECISIONLINE: Personal Investing USA TODAY Update Nov. 6-8, 1992 Source: USA TODAY:Gannett National Information Network SMALL STOCKS COME BACK: After a blistering 17-month run, small stocks fell out of favor in February and stayed in the dumps through June. But it may be time for investors to reconsider. A popular small-stock barometer, T. Rowe Price's New Horizons Fund, is up 16% since June 26. The Standard & Poor's 500 is up 4% the same period. Analyst Brian Berghuis says a long small-stock up cycle is firmly in place. UP CYCLE MAY LAST FOR A WHILE: Small-stock cycles tend to last four or five years. So the up cycle that is just starting has a ways to go, says analyst Brian Berghuis. He notes that many small stocks remain undervalued relative to earnings. Typically, small, fast-growing companies command a premium of 30% or more - in this case, that would be a healthy price-earnings ratio of 22. USA CLOSE TO TRADE WAR: The USA edged toward a trade war with Europe Thursday. U.S. Trade Representative Carla Hills announced plans to impose tariffs that would triple prices of white wines and other products from the European Community next month. The EC is threatening to retaliate with sanctions on U.S. goods. That raises fears the dispute will ruin efforts to expand the General Agreement on Tariffs and Trade. WAR COULD HIT LUXURY ITEMS: The prospect of an all-out trade war with Europe didn't exactly have money managers running for cover Thursday. Still, Edwin Walczak, who manages the Vontobel U.S. Value Fund, believes Europe would retaliate with heavy tariffs on luxury items. Our biggest surpluses will be targeted first for retaliation. Analysts' advice: Think twice about Boeing, IBM, airlines, Philip Morris and Merck. AT&T DEAL HAS BELLS NERVOUS: AT&T Chief Executive Robert Allen is using the wireless phone to put Ma Bell back together again. And that has the Baby Bells, AT&T's offspring, nervous. Shares of most of the regional Bell companies, which still have most of the local phone business, fell Thursday after Wednesday's news that AT&T plans to buy 33% of McCaw Cellular, the USA's largest cellular provider. PLAN WOULD SET UP NETWORK: AT&T's plans to buy 33% of McCaw Cellular will help them set up a nationwide cellular network. Losers if the deal goes through: The regional Bells, which get 25% to 33% of their revenue from long-distance companies; other long-distance companies; and Motorola, NEC, Uniden - companies that make cellular phone equipment. Plus for the Bells: This could allow them into the long-distance market. WALL STREET IS HIRING: Wall Street has been on a hiring binge. About time, might be the argument from 50,000 people who lost their brokerage jobs after the 1987 stock market crash. Brokerages are headed for their second consecutive year of record profit. Many are handing out multimillion-dollar paychecks. Industry revenue has picked up and many see the trend continuing. HALE LIKES TECHNOLOGY STOCKS: Money manager Martin Hale didn't vote for Bill Clinton. But he's a bull about the market under a Clinton presidency. He says a Clinton regime, coupled with some positive market signs, should produce a strong stock environment, at least the first half of next year. He says some areas that Clinton will help are already high-priced. Area that's still a good buy: Technology stocks. BOESKY PAYS $50M IN MAXUS CASE: Ivan Boesky Thursday agreed to pay $50 million to settle an inside-trading lawsuit filed by Maxus Energy, formerly Diamond Shamrock. Boesky was the only remaining defendant in the case. Kidder Peabody settled last month by agreeing to pay Maxus $125 million in cash and $40 million in stock warrants. DEC PLANS TO RESTRUCTURE: Digital Equipment Corp. President Robert Palmer plans to restructure DEC into separate business units by the end of the year. Although Palmer told shareholders at DEC's annual meeting that the changes will help restore the computer maker to profitability, he wouldn't predict when DEC's losses would end. DEC stock jumped 2 1:8 to $36 3:8 Thursday. GOLD MIXED, SILVER UP: December gold on the New York Comex fell 90 cents to $336.80 an ounce Thursday. Gold rose in London to $339.00 a troy ounce Thursday from $337.80 Wednesday. On New York's Comex, silver bullion for current delivery settled at $3.926 a troy ounce, up from $3.837 on Wednesday. Silver bullion rose in London to a late bid of $3.95 a troy ounce, up from $3.85 bid Wednesday. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens at 3243.84 Friday after closing up 20.80 Thursday. The New York Stock Exchange composite opens at 230.37, up 0.58. The American Stock Exchange market value opens at 382.69, up 0.75. The NASDAQ OTC composite opens at 614.08, up 8.56. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mixed on Friday. It opens at 0.6504 British pounds, unchanged; 5.3510 French francs, up from 5.3275; 1.5815 German marks, up from 1.5747; and 122.68 Japanese yen, down from 123.05. (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. 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