Dow drifts up in mixed trading


The stock market vacillated yesterday with mixed trading despite favorable reports on inflation and retail sales. The Dow Jones average was up 6.86 points, to 3,391.98.

AND NOW WHERE? "Stocks are overvalued on basis of price-earnings ratios, dividend yields and book values." (Zweig Forecast) . . . "Rising interest rates will prove extremely dangerous to the stock market." (LaLoggia's Special Report) . . . "The worst may be behind us." (S&P; Outlook) . . . "Surest way to long-term investment success is to focus on high quality companies that are well-positioned to survive many future investment cycles, i.e., the 'Rip Van Winkle' approach.' " (Dick Davis Digest) . . . "Stay in the highest-ranked stocks; it's no time to play long shots." (Lovejoy's Marketbrief) . . . "Near-term stock outlook is not good." (Courtney Smith's Strategic Edge).

LOCAL LINGO: Baltimore Security Analysts feature Pitney Bowes, with Carmine Adimando, financial vice president, speaking at the Sheraton, Tuesday at noon . . . Phone Harry B. Gorfine Co. (539-5474) for "Cutting Your 1992 Capital Gains Taxes" ("Among other things, be sure to sell the assets with the highest tax basis.") . . . Top CD and money market rates locally are at Maryland National Bank, Custom Savings, Eastern Savings, Loyola Federal, Washington Savings Bank (Waldorf) and Equitable Federal Savings (Wheaton), according to "100 Highest Yields." . . . Legg Mason's Gerald Scheinker (486-8010) will mail you his firm's "Income Buy List," which includes Central & Southwest, Wisconsin Energy, etc.

BALTIMORE BEAT: Myron Oppenheimer, vice president, Security Trust/Maryland National Bank, sends along his firm's "Spring Investment Review," with prudent advice. Excerpts: "Two major reasons to invest in stocks long-term are for growth of income and capital. . . . Growth of income may be the most important reason. Most high-quality portfolios will show increasing payouts, with some stocks held over time paying out 100 percent of their cost in dividends every year . . . Regarding capital growth, with the exception of the 1970s, the S&P; 500 index outperformed bonds, T-bills and inflation by a wide margin." Phone Mr. Oppenheimer's office at 244-6590) for a free copy of this fine illustrated letter . . . "Westinghouse Electric, selling at about 9 times our earnings estimate, is attractive based on the company's profit potential." (S&P; Outlook, May 6) . . . Phone Smith Barney's Rick Faby at 494-1853 for a copy of "Credit Market Comment," which tells why tax-free bonds have outperformed Treasuries by a wide margin. ("Demand from bond funds has been extraordinary, resulting from collapse of yields in CDs and money funds.")

MID-MONTH MEMOS: According to Barron's, May 11, on newsstands this week, Dow Jones industrials' price-earnings ratio stands at 55 times trailing earnings vs. 19 times one year ago . . . S&P; 500-stock P/E stands at 26 times vs. 18 times in mid-May, 1991 . . . Merck and Coca-Cola, two of my favorite stocks, have now split and you may buy the "when-issued" shares from your broker, receiving more shares for your money. (Not more value, just more shares) . . . "Home Depot and U.S. Surgical are fine stocks for the 1990s." (Patricia Chadwick, investment chief, Chancellor Capital Management, on "Wall Street Week with Louis Rukeyser") . . . Tomorrow night, W$W features, "A Banking Bear Turns Bullish" with guest George Salem, v.p., Prudential Securities, and Frank Cappiello, Louis Holland and Martin Zweig . . . "Excluding pensions, almost 40 percent of a typical family's monies are very short," says Smith Barney's "Strategem," asking, "So how can savers recoup the dramatic purchasing power decline?" For the full answer, basically lengthening maturities and buying stocks, call Stephen Stauffer, 547-7000 . . . "Potomac Electric Power saw a solid earnings rebound last year and strong finances will help Pepco meet construction needs and still raise the dividend." (Dick Davis Digest) . . . "A man without money is like a bow without an arrow." (Thomas Fuller)

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