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Dow gains 25 points, to 3,475, but some experts urge caution


Stocks soared with the temperature yesterday as the Dow Jones industrial average gained 25.74 points, to close at 3,475.67. One local gloomster called the move a "dead cat bounce," explaining, "If somebody drops a cat from a skyscraper, the animal may bounce a few feet from the sidewalk, but it's dead nevertheless."

LOOKING BACK: "Believing that fundamental conditions of the country are sound, my son and I have for some days been purchasing sound common stocks." (John D. Rockefeller, on the morning of October 29, 1929, the day of the Big Crash that sent the stock market into a 3 1/2 -year, 85 percent free fall from which it did not recover for 25 years and which set off the Great Depression of the 1930s.)

LOOKING AHEAD: "We want to get our clients' money as far away from Bill and Hillary as we can. The President is a negative for the U.S. stock market." (Morgan Stanley's Asset Management Chairman Barton Biggs on the cover of Forbes, July 19, on newsstands this week, in a story titled, "Bearish on America" and subtitled, "Are you willing to invest a good part of your money in countries like India and China? If not, you'll have to settle for a lousy return on your investments over the next half-dozen years at best.")

HOPEFULLY HELPFUL: A travel agent told me recently that many major airlines have reinstated senior discounts and that travelers as young as 50 qualify for senior hotel and car-rental discounts through the American Association of Retired Persons (AARP), which costs $8 a year to join. (Call 202-434-2277) . . . If you wish help in reading the financial pages, send 15 cents (no misprint) for "How to Read Between the Lines" to Dow Jones & Co., Educational Service Bureau, P.O. Box 300, Princeton, N.J., 08543. Or buy the book "How to Read the Financial Pages" by Peter Passell, $4.99, Warner Books . . . "The best-performing stock groups in 1993 to date are, in order, gold mining, semiconductors, oil and gas drilling, hotel & motel, automobiles and diversified machinery. The worst, in order of poor performance: health care, pollution control, truckers, paper containers, manufactured housing and tobacco." (Fortune, June 28)

BALTIMORE BEAT: "I. W. (Tubby) Burnham, 84, former Baltimorean and retired chairman of Drexel Burnham Lambert, recommends Exxon, Citicorp and Telematics International." (Forbes, July 5) . . . Write T. Rowe Price's Steven Norwitz (100 E. Pratt St., Balto., 21202) or phone him (800-638-5660) for a fine six-page color brochure titled "Summer 1993 Report," covering "Developing a Diversified Growth Strategy," "Municipal Bond Yields Attractive, Especially in High Tax States" and "The Bull Market in Bank Stocks." . . . Legg Mason's Gerald Scheinker (486-8010) will mail his firm's "Mid-Atlantic Bank & Thrift Quarterly." ("All good things come to an end and our bank index ended its streak of six consecutive quarters of outperforming the market during the most recent quarter.")

MARYLAND MEMOS: The Rothschild Co.'s July 1 "Letter to Clients," written by research director Joseph Wikler, is titled "The Great Experiment," and the firm will mail a copy if you phone 539-4660. ("The hypothesis of the experiment is: raising taxes on the highest income members of society, increasing government spending and attempting to reduce the Federal deficit will cause the economy to grow and create more 'high quality' jobs. In about a year, we'll know if the hypothesis is true.") . . . Dean Witter's Steven Stauffer (592-3164) will mail his firm's "Summer Strategem," which focuses on the long-term rewards of investing in small-company growth stocks. ("A $10,000 investment in small stocks -- defined by Ibbotson Associates as the smallest 20 percent of stocks on the NYSE -- in 1960, and held through December 1992, would have grown to an incredible $765,000 vs. $256,000 in the average S&P; stock and about $70,000 in Treasury bills or bonds.")

JULY JOURNAL: "Only 18 percent of investors are currently optimistic about the future of the stock market." (American Association of Individual Investors, via CNN) . . . "High-yield corporate bonds, commonly known as junk bonds, are headed for another good year in 1993. Most junk funds returned 15-20 percent in 1992, and in 1993 so far the funds have returned another 6.7 percent." (Kiplinger's Personal Finance Magazine). Ticker warning: If interest rates turn up, the value of these funds usually declines. Read the prospectus before buying . . . "Wall $treet Week With Louis Rukeyser" tomorrow night is titled "Texas Trust" with guest Jeanie Wyatt, a Texas banker, and panelists Frank Cappiello, Howard (Pete) Colhoun and Robert Stovall.

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