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NEWS.TXT
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1994-01-01
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Blue-chip stocks sold off in late trading Friday. The Dow Jones
industrial average fell 21.79 to close at 3754.09. But advances led declines,
1181-892, on the New York Stock Exchange in adjusted volume of 167,622,790
shares.
The NASDAQ composite index gained a solid 5.72 to 776.80 in what may be an
early glimmer of the "January effect," in which small stocks outperform the
behemoths at the beginning of the year.
The Wilshire 5000 fell $4.170 billion to $4,657.828 billion.
MCI Communications led the Nasdaq actives, up 1 1/4 to 28 1/4. Its stock
rallied Thursday on a Wall Street Journal report that MCI plans to spend more
than $1 billion to build local networks to compete with Baby Bells.
Infinity Broadcasting Class A was down 3 to 30 1/4. The FCC has delayed
deals by Infinity to buy three radio stations while considering complaints
against radio personality Howard Stern.
Central Pennsylvania Financial was up 2 1/2 to 21 after receiving a
buyout offer from Fulton Financial at $23 a share.
Walt Disney fell 1 1/8 to 42 5/8 after admitting it may be forced to close
EuroDisney if financial restructuring talks fizzled.
Homebuilders gained ground after the week's positive housing data. Lennar
was up 1 3/8 to 34 1/4 and Kaufman & Broad gained 1/2 to 23 3/4.
The Dow open, theoretical intraday high and low: 3775.33; 3804.11; 3745.15.
Thoughts for the New Year:
- When the proposed buyout of United Airlines fizzled in 1989, it sent the
Dow into a 180-point tailspin one Friday afternoon.
Zirconium king QVC Network and Viacom, which has brought us Beavis and
friends, are in the process of bidding Paramount Communications up to UAL-like
heights. Let's hope that the rest of the stock market emerges unscathed in
1994 from the latest mega-merger, regardless of whom the spoils go to.
- An expanding economy and declining oil prices should combine to add spark
to the trucking industry's bottom line. While many of these issues have
already been marked up (like Consolidated Freightways, from 16 in October to
nearly 24 now), others have yet to move but could do so if trends continue.
Possibilities: Carolina Freight, which has been between 11 1/2 and 14 for
months, but attracted an insider buy at the lows; and Dana Corp., which makes
truck and auto parts. Despite trading near 60, an all-time high, Dana is a
favorite of short-sellers, with a short-interest ratio of 19 days.
- Mutual fund investors are going hog-wild for overseas stocks. Caveats:
Foreign investors (in this case, us) rarely get into the stock markets of
other countries at the bottom. Sadly, the same can't be said for the top.
One of the pitfalls of foreign investment is the strength of the U.S.
dollar. Should the dollar continue to rally, gains in foreign stock markets
could be wiped out by the currency adjustments.