Newspaper article THE JOURNAL RECORD

`Getting Better' Stories Characterize Stock Advances

Newspaper article THE JOURNAL RECORD

`Getting Better' Stories Characterize Stock Advances

Article excerpt

The economy may have been ailing for most or all of the year, but the stock market's dominant theme in 1991 was "getting better."

In broad terms, that meant a rally in stock prices that began with a rush in the first quarter, hesitated through the summer and fall, then revived in the waning days of December to set record highs.

In the process, the bear market of 1990 was apparently consigned to history.

More specifically, the getting-better story characterized some of the industry groups that led the market advance, including health-care stocks and bank and securities issues, as investors began to anticipate a financial recovery.

High-tech medical stocks were the runaway winners in the performance derby. The Dow Jones index of medical and biotechnology issues posted a 7 percent rise for the year through the close on Dec. 20.

Enthusiasm for the stocks was fueled by an aging population and hopes for scientific breakthroughs in disease-treatment methods and approaches.

"This decade will be remembered as a period of growing demand for health-care services and changes in the U.S. delivery system," said the Value Line Investment Survey in its latest quarterly report on medical-supply stocks.

"Projections indicate that medical expenditures will probably increase from 11 percent of the gross domestic product in 1987 to nearly 15 percent by the turn of the century."

But if there was a solid basis for the group's strength, analysts said prices also were inflated by feverish speculation.

Indeed, many of the high-flying biotechnology stocks took an especially nasty spill at mid-November when the overall market ran into a sharp, but short-lived, selloff.

The story behind the health-care boom has been unfolding for years.

More surprising market pacesetters were securities industry stocks, up 75.45 percent as of late December, and regional banks, up 50. …

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