Friday, December 19, 1997


The Daily Dow
by Robert Sheard

LEXINGTON, KY. (Dec. 19, 1997) -- Despite the market's plunge and partial recovery (which some talking heads still won't admit is related to options expiration), it was a newsworthy day for Dow components.

AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> chairman Michael Armstrong reinforced the idea that he's out to slash costs. In addition to the announced sale of AT&T's Universal Card to Citicorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CCI)") else Response.Write("(NYSE: CCI)") end if %>, Armstrong put a freeze on all hiring, an expected prelude to a new round of job cuts. Two years ago, AT&T slashed 17,000 positions and the buzz surrounding the company suggests that the number may be even larger this time.

Armstrong is also looking for ways to cut costs on local traffic by going around local phone companies if possible. And in perhaps the most important move for shareholders, Armstrong is tying managers' compensation to the financial success of the company, a situation that has not been the case in the past. The news was greeted so positively that AT&T shares closed higher by more than $2. The rise was great enough, in fact, that AT&T fell out of the top ten yielders -- an amazing achievement considering how AT&T looked some six months ago.

AT&T wasn't alone today in the news. General Electric <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GE)") else Response.Write("(NYSE: GE)") end if %> authorized an additional $4 billion buy-back of its own stock, hiked its quarterly dividend 15%, and announced a new direct-purchase stock plan for shareholders. Since GE's current share buy-back plan commenced in December 1994, the company has already bought some 243 million shares, worth approximately $9.8 billion.

Late in the day, Chevron <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CHV)") else Response.Write("(NYSE: CHV)") end if %> also announced a share buy-back, totaling $2 billion. In addition, the company sees 1997 earnings setting yet another new record.

And finally, if you own General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> and haven't seen the news flashes, you're probably wondering what's up with the stock price. Although the stock technically opened higher this morning (at $60 5/16), that's $3.25 a share lower than Thursday's closing price in New York ($63 9/16). The reason for the discrepancy is a distribution of Raytheon's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RTN)") else Response.Write("(NYSE: RTN)") end if %> Class A shares.

The distribution comes about as part of the spin-off of Hughes Electronics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GMH)") else Response.Write("(NYSE: GMH)") end if %> and the sale of Hughes's defense business to Raytheon. Included in the $9.5 billion deal is a payment in Raytheon Class A shares to GM shareholders. According to Dow Jones News Center, GM shareholders will get $3.59 a share in today's distribution.

TODAY'S NUMBERS
Stock  Change   Last
--------------------
T    +2  1/8   61.31
GM   -4 15/16  58.63
CHV  +   1/8   74.19
MMM  -2  5/16  83.63



           
                  Day   Month    Year
        FOOL-4   +0.83%   0.41%  26.60%
        DJIA     -1.15%  -0.85%  20.28%
        S&P 500  -0.89%  -0.90%  27.82%
        NASDAQ   +0.09%  -4.74%  18.09%

    Rec'd   #  Security     In At       Now    Change

   1/2/97  479 AT&T          41.75     61.31    46.86%
   1/2/97  153 Chevron       65.00     74.19    14.13%
   1/2/97  179 Gen. Motor    55.75     58.63     5.16%
   1/2/97  120 3M            83.00     83.63     0.75%


    Rec'd   #  Security     In At     Value    Change

   1/2/97  479 AT&T       19998.25  29368.69  $9370.44
   1/2/97  153 Chevron     9945.00  11350.69  $1405.69
   1/2/97  179 Gen. Motor  9979.25  10493.88   $514.63
   1/2/97  120 3M          9960.00  10035.00    $75.00


                             CASH   $2051.96
                            TOTAL  $63300.21