WALL STREET Investors’ enthusiasm wanes after highs

Press, 1 April 1985, Page 32

WALL STREET Investors’ enthusiasm wanes after highs

by Chet Currier, Associated Press business writer (through NZPA)

New York The first quarter of 1985 produced many bright moments in the New York stock market — including record highs for several market indicators and many individual issues. As northern winter gave way to spring on Wall Street, however, investors’ enthusiasm seemed to be waning a bit. By any measure, the market turned in a strong showing for the quarter. But nearly all of its gains came in the first few weeks of the year. It will be several weeks before investors know how the nation’s corporations fared in the January-March period. The early indications, though, are that there will be plenty of earnings disappointments. Such major companies as International Business Machines, General Electric, and Minnesota Mining and Manufacturing (3M) have already said their profits will not live up to earlier expectations.

multinational companies, such as drug manufacturers, whose earnings from their foreign business has been hurt by the high value of the UJS. dollar.

industrials finished the first quarter with a net gain of 5511 points. Other readings for the week showed the New York Stock Exchange composite index up 1.42 points at 104.60, and the American Stock Exchange market value index up 4.60 points at 229.59.

But analysts say it has also stirred fears that interest rates will rise, because of reduced demand among international investors for U.S. interestbearing securities, and that inflation might revive. “The over-valued U.S. dollar poses a risk of unstable currency markets that could have a temporary adverse effect on securities prices in this country,” the Value Line investment survey observed.

Big board volume averaged 9313 M shares a day, against 103.65 M the week before.

Perhaps the most impressive aspect of the markets first-quarter advance was its breadth. From January 1 through the close on March 27, Standard and Poore Corporation reported, 78 of the stock groups it tracks registered gains, while one was unchanged and just 10 declined.

“But we see little chance that foreign confidence in the United States and its currency will collapse. So we expect that, on average, the U.S. dollar will continue to lose ground gradually in the months ahead.” In addition, despite all the recent worries that have plagued the stock market, many analysts believe the economy still shows a lot of strength. “Business is moving ahead with no recession in sight,” said Mr Albert Wojnilower, chief economist at the First Boston Corporation, in a quarterly commentary on the investment scene.

The big winner was the broadcasting group, up 39 per cent, thanks to takeover mania engendered by Capital Cities Communications’ plan to acquire American Broadcasting (ABC).

In second place were the shares of publicly traded securities brokers, with a 34 per cent advance. These issues often move in tandem with the over-all stock market

In recent weeks, investors have also been confronted with confusion and volatility in the bond and currency markets. The U.S. dollar, after a long bull market in foreign exchange, has lately dropped in value against other prominent currencies. The U.S. dollar’s decline so far has encouraged some investors to buy stocks of

The list of losers was dominated by cyclical industries, reflecting the worries about a possible business slowdown that periodically afflicted the market.

After slipping 0.67 points to 1,266.78 last week, the Dow Jones average of 30

Among them: paper, down 8.8 per cent; aluminum, down 6.7; homebuilding, down 4.5; car manufacturers, down 3.6; and trucking, down 1.8.

Alcan Alu 25%, Alcoa 34%, Amerad Hes 31%, ABC 106, Am Express 41%, Am Motors 3V*. ATT 21%, Armco 8%, Asarco 26%, Atl Rich 48%, Beth Stl 17%, Boeing 62%, Borden 72%, Burroughs 59%, Chrysler 34%, Citicorp 43%, Coca Cola 70, Colgate 24%, CBS 109%, Crane 34%, Dar and Krft 92%, Digital 104, Disney 78%, Dome Mines 9%, Dow Chem 29, Du Pont 51%, East Kodak 68%, Englhrd 29%, Exxon 50%, Firestone 18%, Fluor 18%, Ford 42%, Frpt McMor 20%, Gen Dynam 73, Gen Elec 59%, GM 73, Goodyear 26%, Greyhound 27%, Grumman 26, Gulf Oil 16, Haliburton 30%, Homestake 26%, Honeywell 57%, IBM 127, Int Harv 10%, INCO 13%, ITT 36, Levi Strauss 32%, Lockheed 48%, Manville 7%, JhsnJhsn 42, Kaiser Alu 14%, K Mart 33%, McDonald’s 59%, McDon Doug 77%, MGM 12%, MMM 82%, Mobil 30, Monsanto 42%, NCR 28%, Newm Min 44%, Pfizer 42%, Phel Dodge 20%, Phil Pete 38, Polaroid 30, RCA 41%, Raytheon 45%, Reyn Metal 36%, Royl D Pet 57%, Seagrams 39%, Seas Roe 34%, Shell OU 59%, Shell Rt 36%, Sperry 53, Chevron 34%, StOilInd 61%, Sohio 47%, Texaco 36%, Texas Inst 111%, Union Carb 38%, US Steel 27%, Westg Ele 30, Woolworth 41%, Xerox 43%, Schlumberger 38%, Merryl Lynch 30%, Occidental 29%, Heinze 48%, Clevel’d Cliff 18%, Inter-North 52%, Am AirUnes 41.