After soaring 651 points (17 percent) since Jan. 1, the Dow Jones industrial average edged down 23.17 points (one half of 1 percent) yesterday and closed at 4,462.03.
Investors became wary after Federal Reserve chief Alan Greenspan hinted that the Fed may not cut short-term rates in the near future.
AND NOW WHERE? "Dow Jones 6,000 by year-end is not preposterous. With Dow earnings forecast at $400 next year, a 6,000 Dow would be a P/E of 15, not at all abnormal." (Trade Guide Indicator)
"There are no bargains in a stock market that has never been more overvalued and overpriced." (The Mogambo Guru)
"After five months of continuous rally, we forget that market gains typically undergo normal, healthy 5 percent-plus corrections. It wouldn't be the start of a major market decline." (Lowry's Market Trend Analysis)
"This market could go much higher, but the risk is prohibitive. Mutual fund liquidity dropped to 7.6 percent, a danger signal. Take extreme caution. Bernard Baruch said, 'I made my money by selling too soon.' " (The Chartist)
WHICH WAY OUT? Regarding the above diametrically opposite opinions, remember what ex-Yankee catcher Yogi Berra advised: When you come to a fork in the road, take it." And somebody else once quipped, "When in doubt, do the right thing."
MARYLAND MEMO: Richard Young, Intelligence Report, Potomac, says, "The five-year Treasury bond yield is very compelling today, as the multiple on the five-year Treasury vs. the yield on the Dow Jones average is now 2.6 times. It's the highest multiple I've ever seen. It's normal for that bond yield to be only about 1.7 times the Dow yield."
LOCAL HONOR ROLL: "Brian Rogers, manager of T. Rowe Price Equity-Income Fund (800- 638-5660), follows the basic equity-income recipe but still serves up a yield and returns heartier than most competitors. Rogers seeks yields at least 25 percent higher than the S&P; 500." (Morningstar Investor)
SLOGAN QUIZ: Here are more well-known national and local advertising slogans. How many can you identify? For answers, read on: (1) We Bring Good Things To Life. (2) On The Rim and Out The Door. (3) The Home of Serious Steaks. (4) Helping People See Better, One Hour At A Time. (5) We're More Than Great Coats. (6) I Love What You Do For Me. (7) We Never Forget Whose Money It Is. (8) A Tradition of Trust. (9) The Heart of Communication.
HOPEFULLY HELPFUL: "You aren't apt to spend money you don't see, so set up an automatic savings plan, like a 401(k) plan at work. The money is deducted directly from your salary, lowering your taxable wages, and the earnings are tax-deferred. Another idea: Have a set amount transferred every month to a mutual fund from your bank account." (Wall Street Journal, June 2, under "A Spending Plan For The Young")
TRAVEL TIPS: "A constant gripe of business travelers, telephone surcharges, have been eliminated by most major hotels. . . . More business travelers, particularly women, are opting for smaller, boutique-style hotels or bed-and-breakfast inns.
"Hotels and car rental companies where you avoid waiting in lines are traveler favorites. Hotels lead the way in video checkout procedures. . . . Most air travelers ask for exit-row and bulkhead seats, which offer more leg room." (Entrepreneur, June)
QUIZ ANSWERS: (1) General Electric (2) Mr. Tire (3) Ruth's Chris Steak House (4) Lenscrafters (5) Burlington Coat Factory (6) Toyota (7) Loyola Federal Savings (8) Merrill Lynch (9) Bell Atlantic
MARYLAND MEMOS: "Given the industry's growth, the company's excellent competitive position and its strong financial underpinnings, we continue to recommend the purchase of T. Rowe Price stock." (The Patient Investor)
Centennial One Inc., Landover, is written up in Entrepreneur, June. Excerpt: "Standing out in a crowd doesn't bother Lillian Lincoln, founder and president of this fast-growing, 700-employee janitorial company. She is the first black women to earn an MBA from Harvard Business School."
"Any business person knows the folly of gratuitously insulting his banker. The Clinton administration seems to harbor no such qualms in dealing with Japan, the U.S.' largest banker." (Steve Hanke, professor of applied economics, Johns Hopkins University, in Forbes, June 19.)
LAST LINES: "The best-performing NYSE stock in May was Employee Benefit Plans, up 57 percent. The firm is a health care services company engaging in talks to be acquired." (Media General Financial Services)
"Fast-growing companies that find themselves strapped for cash often discover that barter offers a sensible alternative. After all, businesses must meet payrolls and pay rent and utility bills with cash." (Inc., June, in a story with all the details)
Tomorrow night, Arthur Levitt Jr., chairman, Securities and Exchange Commission, will be the guest on "Wall Street Week With Louis Rukeyser," with panelists Alan Bond, Harvey Eisen and Mary Farrell.
"More than 60 percent of today's workers are starting to save at age 30. Favorite choice: 401(k) plans. Almost two-thirds of workers who are offered 401(k)s use them." (Employee Benefit Research Survey)(Business Week, June 12)
Recent arrivals in Sun Stocks' 12-month new high listings include Aegon Insurance (parent of Monumental Corp.), Annapolis Bancshares, Columbia Gas, Delmarva Power & Light, Information Resources, Intersolv, Tracor and United Industrial.