From: udcrusd@meaddata.com (Sylvia D'Cruz)
Subject: Financial News:- April  2, 1992
Organization: Mead Data Central, Dayton OH
Date: Mon, 6 Apr 1992 17:59:57 GMT
Distribution: soc.culture.indian

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                  Copyright 1992 The New York Times Company
                               The New York Times

                 April  2, 1992, Thursday, Late Edition - Final

Market Place; Cash Is Trash? Not This Time

By FLOYD NORRIS

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   "Cash," went the Wall Street refrain as 1991 ended, "is trash." So low were
the prevailing interest rates on savings accounts, money market funds and
Treasury bills that investors would have to turn to the  stock  and bond markets
to find decent returns, the conventional wisdom held.

   So what happened in the first quarter of 1992? "Cash," as the financial
community calls short-term investments, did better than  stocks  or bonds:
Investors who kept their money in cash had positive returns, albeit small ones,
while investors in  stocks  and bonds lost money.

    The Standard & Poor's 500  stock  index, for example, fell more than 2
percent in the quarter, even after adjusting for dividend income, and J. P.
Morgan's index of Government bonds showed a decline of 1.6 percent, as long-term
interest rates rose.

Soured Biotechs

    And anyone who decided to stick with last year's big winners, the
biotechnology  stocks,  could easily have lost 30 percent.

   That is not to say that no  stock  investors did well. Those wise enough, or
lucky enough, to have bought baskets of cyclical  stocks,  with a sprinkling of
previously unloved banks, had a wonderful quarter. And the Russell 2,000 index
of small  stocks  was up 7.3 percent, with many of the best performers among the
smallest  stocks,  which few money managers own.

   The general softness of  stocks  did not seem to discourage investors,
however. When March figures are in, mutual fund buyers alone will probably have
poured a record $19 billion, or perhaps $20 billion, into  stock  funds during
the quarter. That would almost be enough to absorb the entire $21.2 billion in
 stock  offerings during the quarter, as reflected in figures from IDD
Information Services.

   Such public enthusiasm in a flat market is not exactly typical, and it
reflects the fact that many investors have barely noticed that the great bull
market has paused.

   The Dow Jones industrial average, the index most investors notice most,
touched several record highs during the quarter and was up almost 3 percent for
the quarter, when dividends are included. That run-up reflects a great
performance by the Walt Disney Company and a big rebound in the General Motors
Corporation, a  stock  that should benefit greatly from the economic recovery
that Wall Street so firmly anticipates.

   Moreover, the performance figures would probably look a lot better if the
chairman of the Federal Reserve, Alan Greenspan, had not moved to slash the
discount rate on Dec. 20 and had waited until the new year began. When  stocks
soared in the final 10 sessions of 1991, it turned what had been a good year
into a great one.

   Byron R. Wien, the chief United States equity strategist for Morgan Stanley,
calls it "the Greenspan curse," since money managers could have used the late
December performance in their 1992 numbers but will not be able to. He thinks
 stocks  now are likely to move lower.

   For many  stocks,  the rally that ended in early January marked a great time
to sell. Bob Farrell, the chief market analyst at Merrill Lynch, said 28 percent
of the more than 4,000  stocks  tracked by Merrill have fallen at least 20
percent from their January highs. He thinks weakness may continue for a few
weeks but that a rally will start before the end of April.

   There are still plenty of bulls. "This is a short-lived flat spot in an
ongoing bull market," said Steve Einhorn, the co-chairman of Goldman, Sachs's
investment policy committee.

   Contrary to the arguments of many, Mr. Einhorn said  stocks  were still
fairly valued relative to interest rates, and he forecast that continued buying
by individual investors would help push shares higher. For the year, he said, he
expects total return from the Standard & Poor's 500 to be about 12 to 15
percent.

   The big winners of the first quarter among New York  Stock  Exchange  stocks
that began the year above $5 a share included Chicago's Continental Bank, up
78.6 percent; Boston's Shawmut National, up 64.3 percent, and New York's
Citicorp, up 59 percent. The balance sheets of those banks are not likely to be
compared with J. P. Morgan's, but their  stock  performance is certainly better.
Morgan, a favorite in 1991, has fallen 15.8 percent so far this year.

   Auto  stocks  were leaders in the quarter, with Chrysler up 52.2 percent, as
investors bet on recovery. But oil  stocks  reeled from weak prices and seemed
to get no benefit from expectations of economic growth.

   Fred Leuffer, an analyst for C. J. Lawrence, notes that many on Wall Street
are questioning if oil company dividends are safe. Most are, he says, and the
 stocks  are worth buying.

   With the dollar generally rising this year, most overseas investments have
been poor ones for Americans. An exception is the  India  Growth Fund, a
closed-end fund that invests in Indian equities. It was up 91.6 percent for the
quarter, making it the Big Board's best performer.

   The best performer on any market for the quarter was Dataram, a maker of
computer peripheral equipment. It soared 189.9 percent on the American  Stock
Exchange in the quarter, as it reported sharply higher sales and profits.

   The worst performers among  stocks  that began the quarter at or above $5 a
share, included Chambers Development, whose class B shares plunged 69.5 percent
on the American  Stock  Exchange, and Employee Benefit Plans, which fell 62.6
percent on the Big Board.

   Both  stocks  had been top performers based on rising profits. Employee
Benefit, a health insurance processing company, disappointed holders by saying
profits would be flat, while Chambers, a developer of landfill sites for trash,
changed its accounting in a way that decimated reported profits.
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Sylvia D. D'Cruz                                
Mead Data Central                               Systems & Product Technology
Bldg. VI, 9595 Springboro Pike                          udcrusd@meaddata.com
Miamisburg, Ohio 45342                                        (513) 865-6800   
                                               
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