Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 2, 1994 TAG: 9312280022
SECTION: BUSINESS PAGE: E-1 EDITION: METRO
SOURCE: By Mag Poff staff writer
DATELINE: LENGTH: Medium
John C. Parrott II of Wheat First Securities in Roanoke, who tracks the index for the Roanoke Times & World News, said that was fairly close to the performance of the Dow Jones Industrial Average.
The index, reported every Tuesday as part of the Roanoke Valley Economic Indicators, began the year at 194.78 points and closed with Friday's trading at 223.19. The regional index's low in 1992 was 203.65 at the end of January. The index rose as high as 224.90 at the end of August.
Parrott said the increase in the area index was due almost entirely to companies in the fields of communications and durable goods and companies in an income-sensitive business.
Manufacturers - chiefly General Electric Co. and ITT Corp. - had a very good year, Parrott said.
Leaders in the field of communications were BellSouth Corp. and Bell Atlantic Corp. Both started the year with common stock trading at about $51 a share. BellSouth recently hit $57, and Bell Atlantic came in at about $60.
The Virginia Electric Power utility unit of Dominion Resources Inc., which did well, is sensitive to income, Parrott said.
Small companies such as Home Shopping Network and Roanoke Electric Steel Corp. "made pretty good moves," Parrott said.
Norfolk Southern Corp. also "had a reasonably good year," Parrott said.
The index was held back by the poor performance of the stocks of banks and furniture companies. All companies representing those businesses on the index showed stock declines over the year.
Bassett Furniture Industries in particular "made a big move down" from about $50 a share to a recent price of $36.
Parrott pointed out that banks rode the crest of the wave in 1992.
During 1993, he said, they really enjoyed big interest-rate margins, the difference between the amount paid on deposits and the amount earned on loans. They also had good income.
Still, Parrott said, the margins and earnings "tightened up some."
And as the hot industry on the market in 1992, he noted, it was not unusual that they fell back the following year.
The furniture industry follows the overall economy and consumer buying. Parrott said consumers were not purchasing big-ticket items in 1992 except for automobiles. Consumer confidence was down throughout the year.
Parrott said 1992 saw "a rifle shot market."
In such a market, he explained, the stocks of all sectors improve so that it matters little what you buy.
But in the 1993 market, Parrott said, you had to be in a precise sector. Only certain industries saw an improvement.
by CNB