Newspaper article THE JOURNAL RECORD

Ibm Typifies Recent Problems Facing Stock Market , Economy

Newspaper article THE JOURNAL RECORD

Ibm Typifies Recent Problems Facing Stock Market , Economy

Article excerpt

NEW YORK - For many Wall Streeters, the recent problems of the stock market and the economy are typified by International Business Mac hines Corp.

From 1981 through early this year, IBM shares tripled in price, reaching record highs along with the rest of the market.

However, since peaking at 161 7/8 several months ago, they have slumped into the low 130s in the face of earnings disappointments that the company has attributed to sluggish capital spending in NorthAmerica.

Almost everyone agrees that it will take much more than the current difficulties facing the company to seriously impair its standing in the investment world as an enterprise of the most admirable kind.

As Moody's Investors Service appraises IBM in its current Handbook of Common Stocks:

""Aggressive research and strong marketing suggest that outstanding growth will continue over the long term.''

Nevertheless, the company's very prominence make its earnings and stock price very sensitive subjects for investors in general.

""IBM isn't "just another stock' that can be ignored,'' said Stan Weinstein in his investment advisory letter The Professional Tape Reader. ""Its lack of upside leadership has already taken its toll and is likely to cause more problems in the months ahead.''

With its relatively high price and large number of shares outstanding, IBM exerts a powerful influence on the leading stock market averages. The drop in its share price in recent months has by itself accounted for a decline of some 30 points in the Dow Jones industrial average.

It also tends to set the mood of portfolio managers at investing institutions, if only because so many of them own so much of it.

By Moody's most recent tally, 1,663 investment companies, banks, insurance companies and college endowment funds hold positions in IBM stock, totalling 314. …

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