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PNC FINANCIAL ANALYSTS: A MARKET OF STOCKS, NOT NECESSARILY A STOCK MARKET

 AMELIA ISLAND, Fla., Nov. 19 ~PRNewswire~ -- Key economic and market indicators suggest that investors should construct a good deal of their portfolios around stocks, being careful to use specific stock selection rather than base their purchase on a particular industry because "this is a market of stocks, not necessarily a stock market," PNC Financial Corp analysts said today.
 The analysts, speaking to a PNC Institutional Investment Service conference for clients, said it is important for investors to look at the performance of individual companies rather than industries when they buy stocks. In the current environment, only companies that have been able to cut costs, achieve efficiencies in terms of product and service delivery and technology, and aggressively seek revenue growth will turn in the kind of earnings that can provide strong returns for an investor.
 "Companies that are focusing on revenue growth rather than control will perform best," said Lucinda Mezey, director of equity management for PNC. "That's why we say this is a market of stocks, not necessarily a stock market."
 However, the analysts issued the caveat that returns in the 1990s should be lower than they were in the 1980s. The same holds true for earnings growth. A company's growth should be considered favorable if it runs about 12 percent, said Mezey.
 The relationship between price earnings ratios and inflation, while not a new concept, is key to PNC's outlook for the equity market in the 90s, Mezey said. Historically, low, flat or "benign" inflation -- in the stage we are currently experiencing -- indicates positive returns in the equity market, Mezey said, adding that PNC is forecasting a range for the DJIA of 5,000 to 5,510 by 1996.
 The analysts said the economy is still lowered by lackluster consumer sentiment; continued business restructuring; a decline in the number of 20 to 34 year olds who are most likely to make major purchases; and falling defense expenditures. President-elect Bill Clinton's efforts to jump start the economy will be jarred by those factors, along with Federal Reserve policy, the huge budget deficit and bond "vigilantes" on Wall Street who wield enormous power over the market, PNC economist J. Patrick Bradley said.
 "Clintonomics are a little less than meets the eye right now because they will only be mildly stimulative to the economy," Bradley said. "These constraining forces will prohibit the administration from being more stimulative."
 All is not bleak, however, Bradley said, because there are several factors on the horizon that could help ignite the economy. Among these are the higher proportion of 45 to 69 year olds who tend to save more, thus keeping the savings or investment rate high; and profit margins showing signs of improvement and continued export growth.
 PNC Financial Corp, headquartered in Pittsburgh, is the nation's 13th-largest bank holding company, with assets of $46.6 billion. It operates approximately 550 community banking offices in Pennsylvania, Kentucky, Ohio, Indiana and Delaware and conducts business through additional offices in 16 states.
 PNC's principal banking affiliates include: Pittsburgh National Bank, Pittsburgh; Provident National Bank, Philadelphia; Citizens Fidelity Bank, Louisville, Ky.; Central Trust, Cincinnati; Bank of Delaware, Wilmington, Del.; PNC Trust Co. of Florida, Vero Beach and Tampa, Fla.; Northeastern Bank, Scranton, Pa.; Marine Bank, Erie, Pa.; PNC National Bank, Wilmington, Del.; CCNB Bank, N.A., Camp Hill, Pa.; Hershey Bank, Hershey, Pa.; and The First Bank and Trust Company, Mechanicsburg, Pa.
 For more information, or if you would like to interview PNC investment analysts, call Linda Wolohan of PNC at Amelia Island, 904-261-6161.
 ~delval~
 -0- 11~19~92
 ~CONTACT: Linda Wolohan, 904-261-6161, or Leah Smith, 215-585-5903, both of PNC Financial~
 (PNC)


CO: PNC Financial Corp ST: Pennsylvania, Florida IN: FIN SU: ECO

CC -- PH057 -- 3133 11~19~92 17:09 EST
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Date:Nov 19, 1992
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