L.A. stocks can't keep market pace.

As the soaring stock market pushed the Dow Jones Industrial Average to close above 9,000 for the first time ever last week, L.A.'s publicly held companies, on average, are trailing far behind the gains posted by companies nationwide.

The Dow, the S&P 500 and the Nasdaq Composite Index all posted double-digit gains in the first quarter, while by comparison the Los Angeles Business Journal 100 rose just 7.5 percent.

The LABJ 100 is an index of 100 public companies representing a cross-section of L.A. business, and includes about one-fourth of the publicly traded companies in the county.

Its single-digit increase compares with a 17.7 percent boost for the Nasdaq index, a 14.2 percent increase for the S&P 500 and a 12.1 percent rise for the Dow.

Economists and analysts say L.A.'s public companies have not kept pace with the rest of the country for two reasons: the industries that dominate Los Angeles took major hits during the first three months of the year; and the industries that did perform are scarcely here at all.

"The problem is just the mix." said Harold Harrigian, a partner at Crowell, Weedon & Co., which compiles the LABJ 100. "The fact is that we're overweighted with real estate investment trusts and oil companies, both of which have performed poorly in the last three months."

Three of the largest public companies in L.A. County are Atlantic Richfield Co., Occidental Petroleum Corp. and Unocal Corp. all of which suffered in the first quarter from rock-bottom oil and gasoline prices.

The LABJ 100 also trailed national indexes because the county has few companies in the industries that did particularly well nationwide during the quarter: financial services, technology and pharmaceuticals.

Some of the nation's big gainers last quarter included SCM Microsystems Inc., a Los Gatos-based hardware and software manufacturer, whose stock soared 235.4 percent over the three-month period; and IGEN International Inc., a large pharmaceuticals company based in Gaithersburg, Md., which saw its share price rise 219 percent last quarter.

Redmond, Wash.-based Microsoft Corp. was up a more modest but still impressive 38.5 percent over the period.

L.A. lacks these large technology firms.

The publicly held technology companies that are based in Los Angeles were some of the LABJ 100's biggest first-quarter gainers.

Earthlink Network Inc., the Pasadena-based Internet service provider, was the index's top performer, with its stock price rising from $25.75 on Dec. 31 to $56.44 on March 31 - a boost of nearly 120 percent.

El Segundo-based Computer Sciences Corp. rose from $41.75 a share at the end of last year to close at $55 a share on March 31 a rise of 31.7 percent.

Of course, a high-tech orientation was not necessarily a recipe for success.

Santa Monica-based CyberMedia Inc., for example. which makes computer software, was the worst performer on the LABJ 100, with its stock price plunging from $15.06 on Dec. 31 to $6.88 a share on March 31.

The recent spate of bank mergers, which has transformed L.A.'s financial landscape. also is taking a toll on the performance of the LABJ 100.

"The financial industry has been doing tremendously in the first quarter of 1998 in terms of stock appreciation," said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange. "But we don't have many major financial corporations headquartered in the county."

Many banks that once were headquartered here - Security Pacific, First Interstate and others - have been scooped up in recent years by outsiders.

L.A. County's last remaining bank, H.F. Ahmanson & Co., parent of Home Savings, kept pace with the national stock market, with its stock gaining 15.8 percent in value in the first quarter. But Ahmanson is in the process of being taken over by outsider Washington Mutual Inc., which last year bought another L.A.-based financial institution, Great Western Financial Corp.

The LABJ 100, like the S&P 500, is weighted based on market capitalization, meaning that the largest companies on the list - Walt Disney Co. Arco. Mattel Inc., Edison International and Unocal - are given more weight than smaller. less valuable companies.

Part of what drove down the LABJ 100 in the first quarter. according to analyst Doug Christopher of Crowell, Weedon, is that Burbank-based Disney did not have an outstanding quarter.

Disney's stock closed at $106.75 on March 31, up 7.8 percent from $99 on Dec. 31.

"They haven't really had the stellar performance of some of the larger names of the S&P and the Dow Jones," Christopher said.

L.A.'s oil companies, meanwhile, remained essentially flat. Unocal fell from $38.81 on Dec. 31 to $38.69 on March 31. Occidental and Arco posted similarly lackluster results, with their stock prices falling 0.4 percent and 1.2 percent, respectively.

Real estate investment trusts - six of which are on the LABJ 100 - also fared poorly in the first quarter, driven down by surging property prices and uncertainty about the future federal tax status of REITs.

Shares of Arden Realty Inc. fell from $30.75 on Dec. 31 to $28.50 on March 31 - a drop of 7.3 percent.

Other REITs on the LABJ 100, such as Kilroy Realty Corp. and Alexander Haagen Properties Inc., also saw their stock prices drop in the first quarter.

L.A.'s lackluster performance shows little sign of abating. For the first week of April, the LABJ 100 dropped 0.7 percent, compared with a 0.6 percent gain in S&P and a 1.3 percent rise in the Nasdaq. The Dow was flat.

So does the poor performance L.A.'s public companies bode ill for L.A.'s overall economy? Analysts had varying reactions.

"It does matter," said Adibi of Chapman University. "The health of our companies. whether public or private, is important to the health of the local economy."

But Jack Kyser, chief economist with the Economic Development Corp. of L.A. County, said the large number of small, privately held companies in L.A. means that public companies do not drive the economy to the extent they do in other regions.

"We're just so different," Kyser said. "You have this huge base of privately owned industries, so the stock index doesn't give you a huge flavor of what's going on out there."

Robert Franko, president of Century City-based Imperial Financial Group Inc., added that much of the county's workforce is employed by public companies not based in L.A. - such as Seattle-based aerospace giant Boeing Co., the county's largest private employer, and Tokyo-based Sony Corp.

The well-being of those companies may have a greater impact on the local economy than small, local public companies, he said.

Top Five Gainers

Company              Closing        Closing
                      Price          Price         %
                    (12/31/97)     (3/31/98)     Change

Earthlink            $25.75         $56.44       119.18
3D Systems             6.19          11           77.71
Wellpoint             42.25          67.50        59.76
Kaufman & Broad       22.44          32.69        45.68
SmarTalk              22.75          31.94        40.40
Top Five Losers

Company             Closing        Closing
                     Price          Price         %
                   (12/31/97)     (3/31/98)     Change

CyberMedia           $15.06         $6.88       -54.32
Hollywood Park        22            11.75       -46.59
Learning Tree         28.88         22.13       -23.37
Westwood One          37.13         31          -16.51
Ducommun              34.94         29.25       -16.29
Trailing the Market

The LABJ 100 index of L.A. companies lagged the national stock
indices, based on weekly averages.

                                       Point       %
Index         12/31/97     3/31/97      Chg.       Chg.

LABJ 100        868.53      933.34      64.81      7.46
Dow Jones      7908.25     8868.32     960.07     12.14
S&P 500         970.22     1108.15     137.93     14.22
Nasdaq         1570.35     1847.66     277.31     17.66