Despite an early selling wave triggered by unfavorable January trade balance figures, stocks recovered briskly in late trading yesterday. The Dow Jones industrial average advanced 10.38 points to close at 4,082.99, less than one point below its all-time high and 489 points above its 12-month low.
TWO 'BUY' IDEAS: "After a grim 1994, utility stocks should shine this year. Utilities are enjoying stabilizing interest rates, a far less threatening competitive picture and more friendly regulators. When buying a utility, be sure it has plenty of room to raise its dividend. We like PacifiCorp, Florida's FPL Group and Michigan's CMS Energy." (Smart Money, April)
"Small-capitalization stocks remain a bargain at present because they are lagging the large-cap stocks in the Dow Jones industrials and S&P; 500 that are leading the stock market higher." (Louis Navellier's MPT Review)
TAX TIP: "Feel like a fugitive because you haven't filed a tax return in awhile? Here's how to avoid an IRS caning: (1) Admit you haven't filed. The IRS all but promises it will not prosecute if you come forward, though you do owe back taxes and penalties. (2) Get help from a tax pro. He/she will know how to request past documents, etc. (3) If you expect a refund, file soon." (Money, April, in the article "How Non-Filers Can Come Clean")
INFLATION NOTE: "In Lisbon a cup of coffee costs 95 cents, in Frankfurt $4.45, in Paris $5.40, in Tokyo $6.95." (CNBC News) . . . Comparison Note: When I was president of a downtown Baltimore department store in the mid-1950s, my associates and I argued for months about the pros and cons of raising the lunch counter price of coffee from a nickel to a dime (no charge for refills). When we apprehensively made the long-debated move by hiking the price 100 percent (5 cents), very few customers complained.
LOOKING BACK: "How can a stock market 'bear' a year ago look smart now, with the market hitting a new high? Answer: The broad market, for all the fuss over Dow Jones 4,000, hasn't done that well in a year. Remember, the Dow peaked in January 1994 at 3,978, but since then the index climbed a mere 0.9 percent. Secondary stocks did worse. With a return above 4 percent, cash did better." (Mark Hulbert in Forbes, March 27)
LOOKING AHEAD: "The stock market is making a gradual transition from the second leg of the bull market -- the earnings-driven leg -- to a longer-term topping out process. Longer-term risk is gradually increasing." (Walter Deemer's Strategies and Insights)
"The past year set the stage for a tremendous opportunity in both stocks and bonds. The Dow could reach 4,600 this year and rise to our long-term target of 5,200-5,600 by Election Day." (Donald Hays, Wheat First Butcher Singer)
"How likely is Dow 5,000? With Dow dividends now $107, 5,000 would mean a 2.10 percent yield. The lowest yield ever for the Dow was 2.57 percent in 1987. Put another way, Dow 5,000 means a price/dividend ratio of 46.7 and the high at the top of any bull market has been 36 times until 1987 when they pushed it to 40 times. Again we ask: Is 46.7 likely?" (Technical Trends)
LOCAL LINGO: Tomorrow night, "Wall Street Week With Louis Rukeyser" is entitled "Let's Go to the Movies," with guest Jessica Reif, managing director of Merrill Lynch, with two Baltimore panelists -- Eddie Brown and Frank Cappiello -- and Allison Deans.
On Thursday, March 30, the Security Analysts Society is host to Charles Clough, Merrill Lynch investment strategist, on "The Investment Environment and Outlook" at the Stouffer Hotel at noon.
Among "Smaller Firms," Legg Mason ranks No. 5 and Alex. Brown No. 6 in Money magazine's April "Top Exclusive Broker Test." The text reads, "Legg Mason's funds have loads but no other front- or back-end charges." Regarding Alex. Brown, "Does not pay brokers extra for selling in-house funds."
BETHLEHEM BULLETIN: "Full speed ahead! That characterizes 1994 and 1995 for the Sparrows Point Division of Bethlehem Steel for accomplishing very important goals . . . 1994 was a profitable year for Sparrows Point for the first time since 1989 . . . Records were set by every operating department . . . We are confident that we have set the right course for accomplishments and innovation in 1995 . . . The outlook for the construction, containers and machinery markets is expected to continue strong this year." (Duane R. Dunham, president, Sparrows Point Division, in "Bethlehem Steel Corporation Annual Review")
NOTES & QUOTES: "You often receive 'cents-off-coupons' by asking for them. Many companies will send you, free, discount coupons for their products if you simply call their toll-free phone number and request them. For the 800 numbers of firms whose products you would like to sample, dial 1-800-555-1212." (Dollar Stretching Ideas)