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Dow average rises 18.91 on lower interest rates


Propelled higher by lower interest rates, the Dow Jones industrial average gained 18.91 points yesterday to close at 3,446.46. Lower rates encourage investors to invest in high-yielding stocks instead of CDs, bonds, etc. Drug stocks advanced on reports that some Clinton health- care proposals might be modified.

WALL ST. WISDOM: "We are looking at a stock market with a price-earnings multiple over 19.5 times earnings and dividends under 2.8 percent based on the S&P; 500-stock index. And in the past from these levels -- and we have looked at every 12-month period in Wall Street since 1926 and also every three-year and 10-year period, measured quarter-to-quarter -- about the best we can expect over the next 10 years is maybe a 6 percent annual total return (gain plus income). We'll just have to lower our expectations." (Investment adviser Steven Leuthold in Barron's, April 26)

BALTIMORE BEAT: "After a decade of historically high returns (1982-1991), the rewards from financial assets over the last 15 months have been well below the previous 10 years. The 17 and 15 percent returns over the past decade for stocks and bonds have been a once-in-a-generation opportunity. And recent high stock valuations, faltering growth from market leaders and the lack of a clear recovery in profitability of cyclical companies combine now to make us more cautious than usual about the prospects for the stock market from here." (Myron Oppenheimer, Security Trust/Maryland National Bank. Phone 244-6590 for complete letter.)

WORKPLACE WISDOM: National Business Employment Weekly, April 30-May 6 issue, on newsstands this week, runs a good vTC story, "How to Interview More Effectively After a Layoff." Excerpts: "The worst time to look for a job is immediately after losing your job . . . Try hard to cast off your negative emotions of depression, anger and frustration . . . Don't even consider trying to return to your former place of employment . . . The key to impressing hiring managers lies in effectively telling them what you have to offer and how you can meet their needs . . . Be specific: Instead of saying, 'I've had experience in all those areas,' state 'My background includes management in the areas of selection, promotion, job evaluation and performance appraisals' . . . Practice in front of a mirror and with friends."

HOPEFULLY HELPFUL: "Contribute the legal maximum to your retirement plans -- your company's 401(k) plan, a Keogh plan if you're self-employed and deductible IRAs . . Deductions for retirement-plan contributions become much more valuable as tax rates rise." (Donna Williams, tax partner, Ernst & Young) . . . "Investment Ideas For the 90s" from Coyne & McLean, a Baltimore CPA firm: "Boring, old-fashioned investments are the best way to achieve long-term goals. Never invest in something you don't understand. Use 'dollar cost averaging' to invest a one-time windfall . . . A worthwhile investment may decline at some point . . The biggest risk in investing is taking no risk at all." (Phone 825-8300 for the full eight-page letter) . . . "If you were hoping for an improvement in CD rates this spring, it's not going to happen. The trend is clearly lower as the economy limps along. We feel rates will continue to fall into May, with no real end in sight." ("100 Highest Yields") . . . The following stocks are recommended by eight newsletters followed by Hulbert Financial Digest: American Barrick, Cerner, Cisco Systems, Home Depot, Placer Dome and Westcott Communications.

STOCK WATCH: (Summary: 75 percent of weekend comments were bearish) "Since our March 9 sell signal, stellar stocks like Philip Morris and Wal-Mart have 'gapped down,' with no buyers to be found. If this is how a bull market treats the largest, most popular stocks, imagine what a real bear market will do to the average stock!" (Jeff Bower's Guru Revue) . . . "Unless the next rally at tracts broad, sustained buying enthusiasm, additional signs of weakness would probably quickly emerge and would call for a defensive position." (Lowry's Market Trend) . . . "The doomsayers remain on automatic pilot, repeating their 3-year-old prediction that the bull market will end soon. But pessimism is simply too thick for any meaningful decline to take place." (Option Advisor) . . . "A major top is forming." (Professional Tape Reader) . . . "Nowhere else to put your money? Don't compound your problems by investing in the stock market now." (Whisper on Wall Street) . . . "We continue to feel that the primary market is in an uptrend with the probability favoring new highs." (Ladenburg Thalman Commentary) . . . "Keep reserves intact; the orderly retreat we've been witnessing is preferable to an upward surge at this stage, but it's too soon to start adding to holdings." (S&P; Outlook)

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