Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Mon, May 4 1992 Date: Mon, 4 May 92 05:17:38 EDT Message-ID: 05-04 0000 DECISIONLINE: Personal Investing USA TODAY Update May 4, 1992 Source: USA TODAY:Gannett National Information Network RALLY MAY BE NEAR END: Wall Street's shift in focus to beleaguered oil stocks is a sign that the 1 1:2-year market rally may be near an end. "Usually it is the last group to attract attention," John Schraff, trader at Daiwa Securities, says of oil stocks. They got plenty of attention last month. Oil and oil-related stocks accounted for four of the top 10 industry groups tracked by Standard & Poor's. (For more, see special Oil package below.) M-2 FIGURES BACK IN VOGUE: M-2 money supply figures will now be watched closely, analysts say. Reason: Fed Chairman Alan Greenspan and other Fed policy makers revealed that their April 9 downward push on rates was prompted by three consecutive drops in M-2. It comes out every Thursday and includes cash, traveler's checks, savings and checking accounts, CDs of less than $100,000 and money-market funds. FUND NEWSLETTERS ON THE GROW: The increase in money flowing into mutual funds - investors have added $10 billion a month to stock and bond funds in the past six months - has led to a surge in fund newsletters. Analysts say no one keeps track of the number of newsletters, but they say publishers are creating more newsletters and direct-mail promotions to bring back readers lost after the stock market crash of 1987. SMALL STOCKS TOP CHART: Small growth companies overwhelmingly dominate a chart of Montgomery Securities' dozen best stock investment ideas for the next 12 months. Institutional research chief John Skeen calls all but one a small-growth stock. The group's earnings growth from '91 through '94 is pegged at 15% to 30% a year. Montgomery's No. 1 pick is FirstFed Financial, a California-based savings and loan. BIG GROWTH SEEN FOR FIRSTFED: Montgomery Securities figures FirstFed Financial, which closed Friday at $22, is a $45 stock in two years. Since it went public in December '83 at a split-adjusted price of $2 3:8, its earnings have grown an average 17% a year. Montgomery's John Skeen sees FirstFed Financial's earnings continuing on the fast track. His outlook for FirstFed: Growth of about 15% a year the next five years. SAVINGS BOND RATE FALLS: The interest rate on U.S. savings bonds dropped to 5.58% Friday, the lowest since the Treasury Department began selling variable-rate bonds in 1982. The new rate, in effect from May through October, is down from the 6.38% in effect during the previous six months. A new rate is set every May 1 and Nov. 1 to reflect changes in market-based rates. STOCKS DECLINE IN QUIET TRADING: The Dow Jones average of 30 industrials closed down 23.03 at 3,336.09 Friday, but the index gained 11.63 points for the week. Friday's fall was attributed to computerized sell programs and the early departure for home by many Wall Street trader anxious about urban riots. Volume on the floor of the Big Board came to 177.36 million shares, down from 223.19 million in the previous session. GOLD, SILVER PRICES INCREASE: Gold for current delivery fetched $339.00 a troy ounce Friday at the Commodity Exchange in New York, up $1.40 from Thursday. At the Republic National Bank in New York, gold fetched $338.25 an ounce as of 4 p.m. EDT, up $1.35. The metal also rose in London. Silver traded at $3.997 a troy ounce on the Comex, up from $3.988 late Thursday. Silver bullion rose in London. SPECIAL PACKAGE ON OIL: OIL GROUP ROSE 8% IN APRIL: The U.S. integrated-oil group rose 8% last month, vs. 2.1% for the S&P 500. Last week, oil stocks led the market's surge. For the week, Atlantic Richfield gained 6 3:8 to $111 1:8; Pennzoil rose 3 3:4 to $48 3:4. Oil companies' earnings generally rise late in an economic recovery. So oil stocks are among the last to rise, possibly meaning the broad rally in stocks is about over. NOT EVERYONE ON EDGE: Already, such red flags as high stock prices and low corporate earnings and dividend yields have investors edgy. Still, many experts say the rush to oil stocks last month is nothing but a healthy rotation into a long-depressed group of stocks. Oil stocks have been among the worst of the S&P groups for more than a year. SLOW RISE EXPECTED FOR STOCKS: Michael Young, oil-stock analyst at Smith Barney, says there is little chance oil stocks will move sharply higher before next year. Oil companies' earnings, on average, will drop 13% this year after sliding 16% last year, he says. Says Bob Stovall, president of Stovall:Twenty-First Advisers, "Anybody worrying about strong oil stocks killing the bull market may have a long, long wait." (End of package.) DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Monday at 3336.09, after closing down 23.03 points Friday. The New York Stock Exchange composite opens at 227.20, down 1.10. The American Stock Exchange market value opens at 389.78, down 0.83. The NASDAQ OTC composite opens at 578.14, down 0.54. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing Editor: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution 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