Newspaper article THE JOURNAL RECORD

Market Conditions Indicate Lower Stock Prices Ahead

Newspaper article THE JOURNAL RECORD

Market Conditions Indicate Lower Stock Prices Ahead

Article excerpt

It takes more than a rise in the Dow Jones industrial average right now to keep many a stock market investor from feeling low.

If you use the Dow average as a gauge, stock prices have been holding their ground of late within about 5 percent of the record high they reached in the first session of 1990.

But the picture looks less rosy if you examine it by the light of several other, less publicized statistical measures that take a broader sample of stocks into account.

This ``divergence,'' in the parlance of Wall Street, makes for hard times in the trading rooms of money managers at investing institutions, where Mission No. 1 is often to try to beat the prominent market averages.

It isn't much of a morale booster either for individual investors, when they see their own stockholdings losing value while the market is supposedly giving a good account of itself.

What's more, some chart-watching analysts on the Street contend, divergences are a poor portent for the likely future behavior of the stock market in general.

``The overwhelming majority of equities are moving lower while the major averages are held up by just a few of the big-cap (large capitalization) names,'' said Joseph Feshbach at Shearson Lehman Hutton Inc. ``The current condition of the market continues to deteriorate, indicating that lower prices lie ahead.''

At the end of April, the Dow Jones industrials stood at 2,645, not a drastic distance below their peak reading of 2,810 on Jan. 2.

Over the last trading week of April, by contrast, 296 issues traded on the New York Stock Exchange hit new lows for the past 52 weeks, compared with just 27 new highs.

At the American Stock Exchange, the new lows outnumbered the highs 104 to 17. In the National Association of Securities Dealers Automated Quotations system for over-the-counter stocks, the margin was 416 to 136. …

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