The Morning Call from Allentown, Pennsylvania • 16

B8 THE MORNING CAI MONDAY, AUGUST 8, 1994 Analysts split over rising inventories By BAR NAB J. FEDER Of The New York Times CRUZ Continued From Page B7 percent for administrative charges. The withdrawal charge disappears five years from the date of the contract, even if you keep adding money. There is no annual maintenance fee if you have at least $25,000 on deposit. f).

Convenience. We can transfer money into the annuity from a Fidelity money market fund, without having to write checks. For our investments in the annuity we have chosen a blend of three funds: Asset Manager, Equity Income and Overseas. f. Asset Manager allocates money among stocks, bonds and cash, with percentages changing depending on the fund manager's economic outlook.

Equity Income invests primarily in stocks that pay high dividends. Overseas seeks long-term growth by investing -mostly in foreign securities. We've been making about 9 percent a year since we bought the annuity in November 1992. For our Keogh plans, both Georgina and I have chosen conservative but steady mutual funds that generate income. But by reinvesting this income as we must, in a tax-deferred plan we achieve returns consistent with growth funds but with less volatility and risk.

Georgina has her self-employment plan with the Vanguard Wellesley Income fund (1-800-662-7447), which is almost a mirror image of the Wellington fund. About 60 percent of Wellesley's fund is invested in fixed-income securities, and the rest in dividend-paying stocks (Wellington is the other way). The fund has suffered lately because of a rise in interest rates and a choppy market. But Wellesley consistently has earned double-digit returns with low risk over the long term. Benham Income and Growth fund (1-800-321-8321), where I have my Keogh, invests in dividend-paying stocks.

For IRAs, both Georgina and I have chosen more aggressive funds. We'll tell you more next week. (Humberto Cruz welcomes questions from readers. Although he cannot respond to each one individually, he will answer those of general interest in his column. Write to Cruz in care of this newspaper, P.O.

Box 119, Orlando, Fla. 32802-0119.) Tribune Media Services Yet Wall Street analysts insist their nervousness about the inventory statistics is justified. Business executives are too prone to believe that anything making sales come in below projections is temporary, they caution. Letting inventories creep up is often easier than cutting production schedules. Executives put off cutbacks by telling themselves it could cost money to catch up if they reduce output and sales rebound, or worse still, that they could lose orders to better stocked "Every business that experiences inventory growth wants to believe they did it on purpose," said Edward Weller, who follows retailers for the stockbroking firm of Robertson, Stephens Co.

in San Francisco. i Analysts also warn against taking too much comfort from the knowledge that inventories are still unusually low in many sectors compared with past economic expansions, especially in manufacturing. Rising inventories are already a problem in some sectors of the economy. Some retailers and wholesalers have already slowed down new orders or held up payments for unsold products with painful results. Bausch Lomb, an eye care company in Rochester, N.Y., is eliminating hundreds of jobs as part of its effort to work off $75 million in excess worldwide inventories of sunglasses and contact lens inventories, said Barbara Kelly, a spokeswoman.

About half the excess inventories are in the United States, she said, and the layoffs will reduce operating profits $17 million this year. heads, had a secondary stock offering in April that raised $29 million, in part to finance an expansion of component inventories. Those inventories grew more than 40 percent in the quarter that ended June 30, while sales expanded just over 10 percent. Arthur Zafiropoulo, chairman and chief executive of Ultratech, in Santa Clara, said he thought his customers were embarking on a huge expansion of their industry and wants to be ready. "There are lead times of nine months on some Of our components," Zafiropoulo said.

"The only question I have is whether I'm getting enough material in to meet growth." Imports are another important element of the recent figures that pessimists have missed, said David Hale, chief economist for Kemper Financial Services in Chicago. Wholesalers, including importers like the companies that distribute foreign cars and electronics to dealers, are the only sector in which inventories are growing as fast as in previous post-World War II recoveries. The import share of their business has risen steadily as the economy has become more global. Because the import spigot cannot be quickly adjusted, wholesalers are less nimble than either manufacturers or retailers in managing inventories. It is no surprise, Hale said, that wholesalers accounted for 40 percent of the second quarter increase, compared with 25 percent for retailers and 14 percent for manufacturers.

The statistics suggest that any slowdown in the future to correct inventory imbalances will fall more heavily on foreign manufacturers than in the past, and hurt the American economy less. CHICAGO Last week's government figures showed that more than two-thirds of the nation's economic growth in the second quarter came from rising inventories, and that spooked Wall Street more than Main Street. Rising inventories have often been an early warning sign of future downturns in production and general economic trouble to come, and that is just how Wall Street interpreted the figures. Bond prices rose sharply as investors bet that the economy would weaken and undercut pressures to raise interest rates. But some economists and a wide range of businesses say the inventory increases tell a more cheerful story.

Yes, the growth rate of new purchases fell to 1.5 percent from 2.2 percent in the first quarter and 6.4 percent in the last three months of 1993. Yes, that slowdown in sales growth left some businesses saddled with more goods than they had projected. Nonetheless many other businesses were building inventories based on confidence that the economy is set to continue to expand. "The anecdotes we hear and our business suggest the buildup was voluntary," said Rich- ard Stuckey, chief economist for E.I duPont de Nemours Co. He said many companies seemed to be buying more inventory because they were afraid of running short or of price increases from companies like DuPont.

Ultratech Stepper a supplier of lithography systems that electronics companies use to manufacture microchips and disk drive a Quakertown-based Furniture Unlimited has purchased a store in Deptford, N.J., the company's fifth. Terms were not disclosed. The showroom is scheduled to open Oct. 1. five years.

East Penn Manufacturing Co. of Lyon Sta- tion recently received an award from Ford Motor Truck Operations division for exceptional quality planning, statistical methods, documentation and calibration and process control. The Insurance Marketing Communications Association has paid tribute to Harleysville Insurance employee volunteer program Care Force for its ability to increase employee morale, creative execution and more. Tower Products Inc. of Palmer Township, a manufacturer of environmentally sensitive products used in the printing industry, has been recognized by the Chicago Tribune for outstanding technical support, innovation and specific project excellence.

The company provides the newspaper with, products for press cleaning applications. Sears, Roebuck has opened a retail operation in the Stroud Mall, Stroudsburg, with layout and decor reflecting the company's continuing emphasis on female shoppers. One hundred new jobs have been created, 95 percent filled from the immediate community. Henry S. Lehr Inc.

of Bethlehem has introduced the Pennsylvania Community Providers Service Group Self Insured Workers' Compensation Fund, a non-governmental workers' compensation trust approved by Pennsylvania to serve the health and human service marketplace. J.P. Mascaro and Sons of Harleysville has been awarded a $1.6 million per year contract for trash transfer and disposal by the city of Wilkes-Barre. The contract is for two years with renewal options for a possible extension to Market mirroring Clinton's approval ratings? By GUY HALVERSON Of The Christian Science Monitor ties over such issues as health-care reform and crime could put a damper on the market. Nie says he does not anticipate a sustained rally until fall.

In reaching his conclusion, Shulman looks back over 60 years of U.S. presidents, starting with Franklin D. Roosevelt in 1933. Rising stock markets, he argues, invariably occur at the same time as high approval ratings (under FDR, Eisenhower, Kennedy, and Reagan, for example.) Slumping markets, such as those under Richard Nixon in 1973 and 1974, or Jimmy Carter in the late 1970s, come at a time of slumping presidential approval ratings. Shulman's thesis, which has captured a lot of attention on Wall Street, is not uniformly accepted.

"The market is having problems because there are problems with the underlying economic fundamentals," says Larry Wachtel, a vice president with investment house Prudential Securities Inc. "Up until the past year, the market had been rising because interest rates were falling. Now, interest rates are rising. It's the rise in rates, not Clinton's popularity, that's directly affecting this market," Wachtel says. To many investors, a strong economy suggests that inflation will increase, which works against rising stock prices.

Shulman "raises an interesting thesis, but I would argue that what's happening is the other way around," says James Stack, pub-, lisher of InvesTech, a market newsletter. "The approval rating of a president mirrors what is occurring within the economy, including the stock market. The same forces that create market nervousness often create the low approval ratings." Whatever the causeeffect relationship, Shulman's study links low presidential ratings with weak markets. That would suggest, some analysts say, that until Clinton's popularity rises, investors in common stocks should stay wary. Los Angeles Times Syndicate PILE Continued From Page B7 1928D is worth only a few dollars if it has been circulated.

If it is uncirculated, it is only worth between $15 and $20. But if it is a "star note" one that has replaced a damaged bill it is worth about $200 in uncirculated condition. This type of bill would have a star replacing the suffix like the in the serial number. w. The silver certificates typically go for about $1.50 each, says Gilkes.

My husband recently passed away and in his belongings I came across a certificate for Argus Inc. stock. I have some vague recollection of the stock. If wonder if this company may have been incorporated under a different name. Is this certificate valuable or can it be destroyed.

Buffalo. The company is no longer in existence. According to Robert Fisher of R.M. Smythe Argus Inc. was incorporated in Delaware but was located at 200 Roosevelt Place, Palisades Park, N.J.

07650. In October 1988, its name was changed to Spiratone International. The last published stock quote, according to Fisher, was on Dec. 29, 1989, with the stock being offered at five cents a share. Fisher, who can be reached at 1-800-622-1880, says the stock is worthless.

My wife and I have access to a Stella music box and are wondering if there is any value to it. It is encased in a well-crafted, decorative, polished wooden cabinet that is approximately 24-by-18-by-10 inches. Etched on a silver metal plate is Brevete Sgdg British tent, Swiss made, Patented Sept. 22, 1855. It is still functional.

Is it worth anything? Walnutport, Pa. You should contact the Musical Box Society International at 887 Orange Ave. St. Paul, Minn. 55106.

Or call Angelo Rulli at (612) 774-2590 for information. Rulli tells me that a music box like this could be worth between $2,500 and $5,000. But he needs more information to give you an honest appraisal. (John Crudele is a financial columnist with the New York Post. His mailing address is P.O.

Box 610 Lincroft, N.J. 07738.) 1 NEW, YORK President Clinton, who has been criticized for his handling of United States foreign policy in such crises as Bosnia, Somalia, and Haiti, is also finding himself faulted for a domestic economic problem: the lackluster U.S. stock market. Since hitting close to 4,000 points on the Dow Jones industrial average on Jan. 31, the stock market has been largely heading south.

Stocks have recouped some of their losses from earlier this year, with the Dow now back up around the 3,800 point level. -i But to date, there has been no protracted rally, as often occurs during summer. The reason, according to a controversial new study by David Shulman, chief market analyst with investment firm Salomon Brother is that the stock market is mirroring, to a significant extent, the poor approval ratings of Clinton. Strong markets are associated with strong presidents who have approval ratings of 60 percent or better, Shulman says. Weak markets are linked to presidents such as Clinton who have weak approval ratings of below 50 percent, he adds.

Because Clinton's approval rating, now at around 43 percent, is expected to remain weak, "the bull market is not likely to resume in the near future," Shulman concludes. "Simply put," he writes in the study, "leadership counts." For investors eager to profit from a rising market, Shulman's thesis hardly comes as cheery news. "A president's popularity, or lack of it, can certainly be the catalyst for a particular phase in the market," says Gregory Nie, chief market technician for investment house Kemper Securities Inc. "Historically, the market wants a president to do well." "In fairness, the market has been trying to do a little better in recent days," Nie says. "Volume has been on the rise." But uncertain 1 2 times, where known, are Eastern time): TODAY Nothing scheduled.

TOMORROW WASHINGTON Labor De- By The Associated Press Major business events and economic events scheduled for this week (some dates are tentative; claims and July Producer Price Index, 8:30 a.m.; Commerce reports on July retail sales, 8:30 a.m. WICHITA, Kan. White House Conference on Small Business. FRIDAY WASHINGTON Labor Department reports on the July Consumer Price Index and real earnings, 8:30 a.m.; Commerce reports June business inventories, 10 a.m. partment reports on second-quarter productivity, 10 a.m.

PITTSBURGH Mellon Bank to hold shareholders meeting seeking approval for proposed merger with The Dreyfus Corp. WEDNESDAY Nothing scheduled. THURSDAY WASHINGTON Labor Department issues weekly jobless tUJ DRYCLEANING SUPER SPECIAL for August CORPORATION Wl MOT rout USiKESS IKE CXLTDEAISCX KEW I9M IUKXS WICJUrTMJUQE JUtiTXECKESWI BOOT Sit CHECK US OUT. 1 wwv KEN SALABSKY NEWTON Continued From Page B7 pie's Macintosh. The company says there are more than 40 programs for individual users and scores more in existence or under development for specific corporate use, a market Apple is courting more aggressively.

Asked whether Apple should have skipped the first Newton and instead begun sales with the current version, Capps said it was more important to get Newton on the market and respond to feedback. "You learn much more from a real customer than you do just thinking about it," Capps said. "There's never a final product." Mir Sport OCoats 110 YEARS UNINTERRUPTED DIVIDENDS UQ has declared the quarterly common stock dividend of 34.5 cents a share, payable October 1, 1994, to holders of record August 31, 1994. For latest reports, write to Box 858, Valley Forge, PA 19482. Telephone (610) Gas Electric Utilities AmeriGas Propane America's Propane Company 325 W.

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