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 SEATTLE, Sept. 30 /PRNewswire/ -- The Dain Bosworth Northwest 100 rose 12.06 percent during the third quarter of 1993, beating several other indices, Dain Bosworth announced today. Local stocks outperformed the Dow Jones Industrial Average, which rose 3.49 percent; the S&P 500, which rose 1.61 percent; and even the NASDAQ Composite, which rose 10.53 percent.
 Every industry in the pack ended the quarter up. Double-digit increases were recorded by healthcare stocks, which were up 16.22 percent; manufacturing stocks, up 14.75 percent; natural resources firms, up 13.24 percent; technology stocks, up 11.32 percent; and utility stocks, up 10.06 percent.
 "The market continues to trade at historically high valuations on an absolute basis, but relative to inflation and interest rates, I don't think it's unreasonable," said Glenn Powers, vice president of research at Dain Bosworth. "I doubt there will be an October correction. Even when the market sold off earlier this month in reaction to political unrest in Russia, individual and institutional investors rushed in to pick up the bargains. Most people in the market actually were buying."
 "The only problem with these high valuations is there's little room for error," Powers said. "Stocks that come through with earnings in the third quarter and beyond will do well, but stocks that suffer earnings disappointments may underperform."
 The Quarter's Big Gainers, Losers
 The biggest gainer in the Dain Bosworth index was Micron Technology Inc. (NYSE: MU), which ended the quarter up 132 percent to close at $54.88. It was followed by Sunshine Mining Co. (NYSE: SSC), which ended the quarter up 100 percent to $2.25. Electro Scientific Industries Inc. (NASDAQ: ESIO) finished up 100 percent, to $16.25; and BMC West Corp. (NASDAQ: BMCW) rose 79 percent to $12.50. Utilx Corp. (NASDAQ: UTLX) was up 58 percent to $6.50.
 Hit hard were Immunex Corp. (NASDAQ: IMNX), down 59 percent to $18.50; Nike (NYSE: NKE), down 41 percent to $45.00; Digital Systems International (NASDAQ: DGTL), down 39 percent to $4.13; Edmark Corp. (NASDAQ: EDMK), down 38 percent to $9.50; and Data I/O (NASDAQ: DAIO), down 33 percent to $3.00.
 Trends Powers noted include:
 -- Strong interest in companies with a global focus. "While countries with a soft economy carry near-term risk," Powers said, "others, like China and the former Soviet Union, represent massive markets and a huge opportunity long-term for companies that follow the footsteps of Motorola, Coca-Cola and McDonalds there."
 -- Continued interest and commitment to cyclical stocks. "Over the past few years, earnings of cyclical companies have not come through in the second half, and these stocks gave up gains they won in the first half when the economy was improving," Powers observed. "This year, labor is cost-competitive, various technologies have permitted companies to keep themselves lean and mean, and generally earnings seem to be improving. So cyclicals seem likely to hold their ground."
 -- Small stocks outperforming large stocks. "Small-cap stocks that have beeen in favor since late 1990 continued to outperform in the past few months," Powers said. He expects the trend to continue.
 -- An environment perfect for most stocks. "Interest rates are at levels we haven't seen since the 1960s. Inflation is under control, especially in light of new pressures on health care costs, which largely contributed to inflation in the 1980s. Investors shouldn't underestimate the positives for stocks."
 -- Continued flow of funds into stocks. "Just under $3 trillion is invested in vehicles earning a return of 3 percent or less," Powers said. "That compares to a total market capitalization of $5 trillion. Clearly there's potential for the huge net inflow of funds into the market to continue. That has a strong upward influence on stock prices."
 Market Outlook
 Powers expects these positive trends to continue. "The only wild card is foreign economies," he said. "Expectations for Germany and Japan are depressed, although there are a few signs of recovery. Foreign economies are important, given that 40 percent of S&P 500 companies' earnings come from outside the country."
 Powers is watching basic industries with interest -- including metals, forest products, technology, chemicals, machinery and equipment, consumer durables and building-related industries. This is where general analyst earnings expectations are the highest, and these groups historically outperform in later stages of a bull market.
 Dain Bosworth Inc., a subsidiary of Inter-Regional Financial Group Inc., is a full-service brokerage and investment banking firm with 11 offices and nearly 300 employees in the Pacific Northwest. Founded in 1909, Minneapolis-based Dain Bosworth is a member of the New York Stock Exchange and other major stock and option exchanges. The Seattle offices are located at 1201 Third Ave.
 Percent change from:
 Index/Industry 9/30/93 Qtr. YTD
 Dain Bosworth NW 100 461.04 12.06 19.51
 Dow Jones Industrial Avg. 3,555.12 3.49 7.69
 Standard & Poor 500 458.93 1.61 5.33
 NASDAQ Composite 762.78 10.53 12.68
 Financial Services 512.37 8.38 21.84
 Health Care 1,115.45 16.22 (0.24)
 Manufacturing 399.84 14.75 23.41
 Natural Resources 312.12 13.24 50.29
 Services 452.46 5.59 1.08
 Technology 521.15 11.32 24.80
 Utility 182.52 10.06 22.13
 -0- 9/30/93
 /CONTACT: Glenn Powers, vice president - research, 206-621-3116, or Jennifer Driscoll, public relations manager, 612-373-1647, of Dain Bosworth/

CO: Dain Bosworth ST: Washington IN: FIN SU:

JH-RB -- SE014 -- 7588 09/30/93 20:08 EDT
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Publication:PR Newswire
Date:Sep 30, 1993

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