After bond prices fell yesterday following June's strong durable goods report, stocks declined in moderate trading. The Dow Jones industrial average dipped 15.21 points, closing at 3,720.47. The 30-year government bond slipped 1/2 point to yield 7.60 percent, and the Treasury's 5-year note auction brought investors 6.95 percent, the note's highest return since 1991.
AND NOW WHERE? August in Wall Street has historically been a moderately "up" month, rising an average 0.2 percent over the last 43 years . . . "I'm negative because interest rates will rise soon and stocks are basically overvalued. The only good thing is an increase in pessimism, and that's bullish." (Martin Zweig) . . . "Not many people realize it, but 80 percent of all stocks are down 20 percent from their highs. However, the bear market is near its end." (Michael Holland, investment adviser) . . . "Elaine Garzarelli predicts a sideways-to-down market for the rest of this year, with the S&P; 500-stock index possibly dropping another 15 percent in 1994." (Dan Dorfman in USA Today.) Ticker Note: Ms. Garzarelli correctly predicted the 1987 crash and the Dow's surge from 2,365 in 1990 to almost 4,000 earlier this year.
MARYLAND MEMOS: BGE, with second-quarter profits up 19 percent, is listed in a Business Week (Aug. 1) story titled, "A Surprisingly Strong Showing -- So Far" and subtitled, "A sneak peek at second quarter profits finds a robust 22 percent increase." . . . Mid-Atlantic Medical, a Rockville-based firm, is written up under "These Stocks Still Have Room to Grow" in Money magazine, August. The story says, in part, "Foster Friess, growth-stock picker whose Brandywine Fund achieved a 62 percent total return in three years, figures Mid-Atlantic's earnings can soar 86 percent this year and 36 percent next." (Mr. Friess's other selections are MicroAge, Airborne Freight and Agco Corp.)
MORE MARYLAND: Tomorrow night, locally-produced "Wall Street Week With Louis Rukeyser" is titled "The Deregulation of Utilities and Its Effect on Utility Stocks," with guest Mark Luftig, Senior Vice-President, Kemper Securities, and panelists Robert Stovall, William Waters and Carter Randall . . . Unhappily, Baltimore is listed 22nd from the top under "How 24 U.S. Cities Ranked in Second Quarter Stock Gains" in Money magazine, August.
HOPEFULLY HELPFUL: "Fears of mutual fund dumping in a bad market may be overblown. True, the shares of household financial assets now held in stocks and bonds is at 75 percent, the highest level since 1961, but most individuals are investing for the long pull, namely retirement." (Donald Morgan, senior economist, Federal Reserve Bank of Kansas) . . . "Even if you have 'maxed out' your 401(k), IRA, SEP or Keogh, you can buy an annuity to help fund your retirement. Avoid fixed annuities because they don't keep up with inflation; you'll probably do better with a variable annuity that can be invested in a variety of stock funds for higher returns that will compound tax-free." (Business Week, July 25.)
CAREER CORNER: "Too many sales professionals view objections as obstacles, when they should instead view them as opportunities, says Hal Becker in his book, 'Can I Have Five Minutes of Your Time?' Becker, a former top salesman for Xerox, adds, '63 percent of sales you make come after the fifth rejection. You need to hear five no's before you hear a yes. Unfortunately, 75 percent of salespeople give up after their first rejection. Don't forget that when a customer objects, it is a good sign that he/she is listening and thinking about what you are saying.' " (Success, June.)
FIGHTING NO. 1: "After years of floundering overseas, Pepsi is at it again, brazenly attacking Coke's foreign fortress. Some Pepsi principles for 'Going After No. One': (1) Set a winner's growth goals. If you act like No. 2, you'll always be No. 2. (2) Hire people who love change and thrive on risk-taking. (3) Practice competitive jujitsu. Upset the rules of the marketplace to throw rival off balance. (4) Always anticipate the response you may provoke; for example, what if the competitor comes back hitting harder? (5) Execution of a plan often drives success more than marketing." (Fortune, Aug. 8.)
LAST LINES: "Despite forecasts that higher interest rates will stall the economy, the Money magazine 'Consumer Comfort Index' rose in June to its highest level since July, 1990." (Money, August) . . . Items showing significant sales gains this year, according to The Kiplinger Washington Letter (July 22) are yogurt ice cream cones, more-expensive engagement rings, appliances (air-conditioners, dishwashers and refrigerators), boats and recreational vehicles . . . "Good late-summer jobs for children include car washing and car care, baking, home-video cameramen and women, lawn care, and computer design shops -- kids can design invitations, cards, fliers, etc., on their personal computers." (Ralph Schultz, executive director, Junior Achievement) . . . On Saturday, in the 7-8 a.m. hour, I'll try to answer your "money" questions with Dan Rodricks, on WBAL Radio. Dial 467-WBAL.