DJ average bumps 3,000


Trying to re-scale 3,000 several times this week, the Dow Jones average bumped its head on the "barrier" again yesterday and slipped five points, closing at 2,978.75. For the year to date, the DJ is ahead 346 points, but 57 points below its all-time high.

AND NOW WHERE? "Recent explosive stock market gains won't repeat, but a mild recovery with lower interest rates could be a boost to Wall Street. Lifting South Africa sanctions could help the drug group, like Merck and other major pharmaceuticals." (Baltimore adviser Eddie Brown on "Wall Street Week" with Louis Rukeyser) . . . "Judging from the number of 'worry calls' I've had recently, my conviction in the summer rally thesis has been strengthened." (Joseph Granville) . . . "Longer-term models are weakening and the summer looks dry. It's time again for a defensive posture." (Professional Timing Service) . . . "A blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that could do just as well as one carefully selected by experts." (Burton Mailkel, author)

BALTIMORE BEAT: "We expect the economy to have a slow but sustained advance. Weak real estate markets, reluctant banks and continuing service sector recession lead us to an 'upsloped L' projection, i.e., while the economy may have stopped going down, it will drag bottom for many months. We will stay away from cyclical stocks and concentrate on growth issues like AMP and Minnesota Mining." (The Rothschild Co.) . . . Roger McNamee, portfolio manager, T. Rowe Price Science & Technology Fund, is featured in a full-page spread in Fortune, June 17; libraries have copies, or write McNamee . . . Stock of Bell Atlantic, which serves this area, is listed under "Attractively Valued Issues" in a recent Standard & Poor's Outlook . . . Merry-Go-Round stock is recommended by six newsletters followed by Hulbert Financial Service.

LIGHTER SIDE: When a local broker suggested 30-year Treasury bonds to an elderly Roland Park woman, she snapped, "Young man, I'm 82 years old and I don't even buy green bananas any more!"

MARYLAND MAILBAG: Jonas Brodie, president of The Brodie Organization, writes: "A recent Ticker lists annual percentage rates of return for various investments, but I question the 4.4 percent for residential property. I assume the 4.4 percent is based on increased value, which is not the same as return on investment. Real estate is typically mortgaged and assuming an average 75 percent leverage, the 4.4 percent translates to a much higher return. For example, a townhouse at Annen Woods in Pikesville was $85,900 in 1979 and $179,500 in 1989. Assuming a $64,425 mortgage (75 percent), the internal rate of return on the buyer's $21,475 investment would be 18.3 percent over the 10 years."

JULY JOURNAL: Did you know that some large brokerage houses now charge $15 to investors who request stock certificates when they purchase shares? . . . Tomorrow, Wall Street Week features "Investments in the U.S. and Around the World." . . . "You can hold onto a bigger chunk of your estate by putting your home in a trust." (U.S. News & World Report, July 12) . . . Legg Mason will send recent comments on Baltimore Bancorp, New York Times, Circuit City, etc. . . . The correct phone number for Dean Witter's Jack Rosenbloom, who will mail "The Case for Global Equities," is (301) 547-7027 . . . "Over 63 years, 1926-1989, $1 grew to $534 in stocks (S&P; 500 index), $25 in long bonds, $21 in intermediate bonds, $10 in T-bills. CPI [Consumer price index] rose from $1 to $7." (Ibbotson Associates) . . . "Bethlehem Steel announced a wage reduction in its Steelton, Pa., plant of 15 percent, effective July 16." (Forbes, July 22) . . . Joseph Cohen, P.O. Box 333, Woodstock 21163, will mail a sample copy of "Penny Stock Analyst."

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