The Daily Dow
Tuesday, September 16, 1997
by Deborah Tidwell (TMF Debit)

ALEXANDRIA, VA (Sept. 16, 1997) --Yesterday, Paul Larson (TMF Parlay) talked about Philip Morris and AT&T swapping places in the Beat the Dow Top 10 and expected that I would carry on that discussion in today's report. Well, it isn't that I'm not grateful for the suggestion, but EASTMAN KODAK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EK)") else Response.Write("(NYSE: EK)") end if %> and CHEVRON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CHV)") else Response.Write("(NYSE: CHV)") end if %>) gave us better material today. Even TMF Parlay can surely appreciate "better material."

Since you were promised an update on the AT&T/Philip Morris "race" -- nothing has changed -- AT&T is still #2 and Philip Morris is still #1.

On to better material.

CNBC featured headlines like "Blue Chip Trouble" today after Dow component Eastman Kodak's announced that it is seeing flat growth in emerging markets, loss of market share and demand for 35mm products in the U.S., higher-than-expected R&D costs for digital products, and significant currency impact. If the trends it saw in July and August carry through September, it could see earnings that are 40-50% lower than Q3 a year ago.

Analysts cut earnings estimates, the stock price fell, and Eastman Kodak moved from #5 to #3 on the Beat the Dow Top 10 list today.

As for CNBC's headlines... whatever. The company still sees strong potential in its film and digital products and still sees no reason it can't grow earnings 10% per year average over time. That's the key here -- over time. You don't buy a stock like Eastman Kodak for a short-term pop. The company is investing to grow market share in emerging markets, which can see a lot of short-term volatility. It is also investing in new digital technologies so it will be a player when these products mature and replace older film and paper products. The company is continuing a $2 billion share repurchase program, and its cash position to fund all of these investments is still strong.

Kodak is also upgrading the in-house technologies it uses to support the whole thing. It will take actions to reduce its cost structure and thereby increase its flexibility to cope with pricing and competitive pressures. The company is taking a look at the substantial list of ongoing R&D projects for opportunities to share the cost and the rewards by working with other companies on some of the less strategic, but still promising, ones. Kodak has done a lot over the last year to restructure and focus on its core imaging businesses. To find out more about Kodak, check our special collection on today's announcement, including a report on the analyst conference call held this morning.

Chevron got a big boost today, as did the whole Dow Industrial Average, from Consumer Price Index numbers indicating that inflation is still under control, productivity is up, oil prices were higher but offset by lower clothing prices, and all of our children are above average... well okay, you get the idea though. In general, the Dow was a happy place to be today.

Tomorrow, our guest writer will be... (drum roll)... Rick Aristotle Munarriz (TMF Edible) with his wacky insights on Dow happenings -- or not, you never really know with Edible.

(c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. ________________________________

Stock  Change   Last
--------------------
T    +   9/16  44.75
GM   +   7/8   68.88
CHV  +4  1/2   87.06
MMM  -  11/16  88.56

               Day   Month    Year
        FOOL-4   +1.79%  10.89%  17.44%
        DJIA     +2.26%   3.59%  22.45%
        S&P 500  +2.81%   5.13%  27.66%
        NASDAQ   +2.06%   5.13%  29.25%

    Rec'd   #  Security     In At       Now    Change
   1/2/97  153 Chevron       65.00     87.06    33.94%
   1/2/97  179 Gen. Motor    55.75     68.88    23.54%
   1/2/97  479 AT&T          41.75     44.75     7.19%
   1/2/97  120 3M            83.00     88.56     6.70%


    Rec'd   #  Security     In At     Value    Change
   1/2/97  153 Chevron     9945.00  13320.56  $3375.56
   1/2/97  179 Gen. Motor  9979.25  12328.63  $2349.38
   1/2/97  479 AT&T       19998.25  21435.25  $1437.00
   1/2/97  120 3M          9960.00  10627.50   $667.50


                             CASH   $1009.44
                            TOTAL  $58721.38