Newspaper article THE JOURNAL RECORD

Quarterly View Highlights Stock Market Optimism

Newspaper article THE JOURNAL RECORD

Quarterly View Highlights Stock Market Optimism

Article excerpt

While hardly anybody has a good word to say about the American economy these days, stock market investors keep staking their money on better times.

Through the first three months of 1993, as they did for much of last year, cyclical industrial stocks that are highly sensitive to the ups and downs of economic conditions chalked up some of the healthiest showings in the market.

At the same time, the steady-growth stocks favored by many professional money managers in times of economic uncertainty continued to lag conspicuously.

Oil drilling, mining and auto manufacturing stocks, among a handful of other groups tracked by Dow Jones Co.'s industry indexes, chalked up gains of 20 percent or better in the first quarter, while the overall Dow Jones equity index was edging up 3.82 percent.

The broad category of consumer non-cyclical stocks, meanwhile, showed a loss approaching 10 percent.

Within that sector, the worst damage was inflicted on biotechnology, advanced medical devices and tobacco stocks, each down between 15 percent and 30 percent amid political uncertainties posed by the Clinton administration's developing plans for health care reform.

But other traditional "growth" favorites _ including food, beverages, household products and consumer services _ all struggled along at or below the break-even point.

On balance, investors evinced a continuing preference for "value" in cyclical stocks as opposed to growth, which was the big winner in 1991, a year of recession followed by the feeble beginnings of recovery.

Analysts say the trend in the economy has provided some justification for the shift to cyclical issues.

"The recovery is beginning its third year, believe it or not," observed Jeff Thredgold, chief economist at the bank holding company KeyCorp.

"The anemic growth pace of early '91 to mid-'92 gave way to decent growth during 1992's second half, particularly the final quarter. …

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