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Listings (stocks) C11 MONEY & INVESTING Offerings C17 U Securities C21 V NYSE/Amex Bonds C22 И NYSE Highs & Lows C6 WS FOR 24-HOUR UPDATED NEWS, STOCK QUOT AND MORE, SEE THE WALL STREET .com INTERACTIVE EDITION ON THE WORLD 6/20/97 Tobacco Accord Worries Some, but Not 6.51 +19.45 7800 7775 Profit-Taking Tobacco-Stock Road Big I₁ 7750 S&P 500 index vs. Dow Jones tobacco industry group; Dec. 31, 1996=100 7725 Severity of Pact 140 Rumors of settlement talks Settlement talks Settlement announced Fail t confirmed under way 7700 T W T F Cited for Slump 120 Smol FROM 12/31 PCT HEARD 100 S&P 500 + 1348.24 + 20.91 Tobacco stocks + 144.72 + 20.66 ON THE + 20.43 + 13.84 STREET 80 January February March April May June + 157.96 + 21.32 By 1997 Staff Reporter + 156.07 + 12.09 By E.S. BROWNING Source: IDD Information Services/Tradeline While lots + 475.4 + 11.54 Staff Reporter of THE WALL STREET JOURNAL anti-tobacco, + 1024.19 + 5.29 Analysts agree the tobacco settlement agreed to pay $368.5 billion over 25 years. Mr. Black, one of the leading advocates of should be good news for cigarette stocks. It est so far in pc Money manager Ben Fischer of NFJ In- a settlement on Wall Street, puts the their mutual-f .86 +22.58 takes a few worst-case scenarios off the vestment Group in Dallas notes that they chances at only 60% to 65% that Congress A year af 6900 table, such as unlimited legal liability or still could be subject to some lawsuits and will enact the deal by year-end. Association c: devastating regulation. So how come so that nicotine could be banned entirely in Can the cigarette companies make the 6875 funds with tol many investors are dumping the stocks? 2009. huge settlement payments and continue to been a perce Philip Morris, the world's premier cig- 6850 Messrs. Wardlaw, Goldman and Fi- profit? Mr. Black notes that cigarettes are 'socially con arette maker, gained for about 20 minutes scher all expect the stocks to gain in the a rare case of a still-legal and relatively avoid the sec 6825 following Friday's announcement, but longer run. Mr. Fischer says he will hang cheap item that people can use to relax and tobacco, alco then closed down 2, or 4.2%, at 45½. RJR on to his group's more than one million relieve stress. He thinks demand will con- Nabisco Holdings lost 7/8 at 35. Loews, potentially ha 6800 shares of RJR, but he isn't buying more tinue. even if prices rise and ads are T W T F which owns the Lorillard brand in addition Such fund "What gets me is that this ish't the restricted. to extensive insurance activities, fell 3½ to 0.17% of the as end - this is only the beginning," Mr. How do you know people will still want 12-MO 12-MO LOW 103%. Fischer says. 'You have to ask. is this funds, about t to smokem 20 years? Well, I say, just look 6086.30 Some investors were taking profits; lower than fi 6872.86 really a panacea? And then, what happens at marijuanal' the Bernstein analyst says. others said they were surprised at the fund research 104.11 100.99 if Congress takes this for a year and chews That drug 18 neither legal nor advertised, 754.78 severity of some settlement provisions or on it?" He worries that the stocks could be cago. 680.83 notes, but upeople are still smoking 119-27 111-3 worried about possible trouble getting in for volatility. And respo needed congressional approval. Sen. Trent Lott, the Republican major 06 788.67 Mr. Addes the math this way. among investo Rex Wardlaw, who manages money for ity leader, has said it will be September or Without any settlement, he projects 1998 accepted the A Wells Fargo Bank's asset-management -0.11 October at the earliest before Congress can per-share earnings for Philip Morris of tobacco and 6.00% unit, still holds a lot of Philip Morris. But consider the issue. In the meantime, oppo- $3 45. Based on Friday's close, the com- their no-smol he says he has been taking some profits in nents will scrutinize the proposal for de- pany's stock trades at 13 times that the "AMA Co 5.80 the stock, which looks a lot less cheap than fects and mount their attack. "There is a amount, compared to 19 times for stocks in vestments.' A it did a few weeks ago. In anticipation of risk of negative news now," notes Robert the Standard & Poor's 500; liability worries tions to thous 5.60 the settlement and because of some court Bissell, chief investment officer at the mean investors today won't pay as much come up with victories, Philip Morris has gained a hefty Wells Fargo asset management unit. for a tobacco stock as for other consumer funds, out of 5.40 60% from its low of the past 52 weeks, even All the same, tobacco analysts includ- stocks. funds: Almos counting Friday's drop. 5.20 ing Mr. Goldman of PaineWebber, David To finance the settlement, the Bern- socially consci T W T F Wells Fargo is advising clients to cut Adelman of Morgan Stanley and Gary stein analyst expects cigarette makers to tobacco stocks back to the standard 2% weighting dictated Black of Sanford C. Bernstein all say they raise prices about 50 cents a pack whole- Public ser 12-MO LOW by Philip Morris's size in the Standard & expect Congress to approve the deal, prob- sale (more at retail), which he figures will ing against 5.30% 4.77% Poor's 500 index, after previously urging ably by year-end. "Too many powerful cut consumption by about 11% and knock 15 whether that ti 5.36 4.83 them to take an "overweight" position in parties, from politicians and lawyers to cents off Philip Morris per-share earnings. among investo 5.77 5.37 the stock. investors and health-care providers, stand Interest costs of financing settlement pay- Doug Cogan, W PaineWebber analyst Emanuel Gold- 5.88 5.44 to benefit. ments will knock off another 10, cents, issues for the I man says he was surprised the companies But passage is far from a sure thing. Please Turn to Page C2, Column 3 Please Tw +0.2 104.00 103.75 Rise in Profit Guidance Prediction Effects Sch As preannouncements become more popular, 103.50 positive earning surprises have lost some Dilutes Positive Surprises of their effect and negative surprises have 103.25 With become more devastating 103.00 Earnings preannouncements T W T F "We've had 17 consecutive quarters (quarterly and annual earnings) 12-MC 12-MOLOW ABREAST Isn't LATE NY where companies have reported signifi- 2,400 1.7125 1.5355 OF THE cantly more positive than negative sur- prises. says Sandip A. Bhagat. chief 1.800 MARKET officer of Travelers Investment

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    "ocrText": "Listings (stocks)\nC11\nMONEY & INVESTING\nOfferings\nC17\nU\nSecurities\nC21\nV\nNYSE/Amex Bonds\nC22\nИ\nNYSE Highs & Lows\nC6\nWS\nFOR 24-HOUR UPDATED NEWS, STOCK QUOT\nAND MORE, SEE THE WALL STREET\n.com\nINTERACTIVE EDITION ON THE WORLD\n6/20/97\nTobacco Accord Worries Some, but Not\n6.51\n+19.45\n7800\n7775\nProfit-Taking\nTobacco-Stock Road\nBig I₁\n7750\nS&P 500 index vs. Dow Jones tobacco industry group; Dec. 31, 1996=100\n7725\nSeverity of Pact\n140\nRumors of settlement talks\nSettlement talks\nSettlement announced\nFail t\nconfirmed under way\n7700\nT\nW\nT\nF\nCited for Slump\n120\nSmol\nFROM\n12/31\nPCT\nHEARD\n100\nS&P 500\n+ 1348.24 + 20.91\nTobacco stocks\n+\n144.72 + 20.66\nON THE\n+\n20.43 + 13.84\nSTREET\n80\nJanuary\nFebruary\nMarch\nApril\nMay\nJune\n+ 157.96 + 21.32\nBy\n1997\nStaff Reporter\n+\n156.07 + 12.09\nBy E.S. BROWNING\nSource: IDD Information Services/Tradeline\nWhile lots\n+ 475.4 + 11.54\nStaff Reporter of THE WALL STREET JOURNAL\nanti-tobacco,\n+ 1024.19 + 5.29\nAnalysts agree the tobacco settlement\nagreed to pay $368.5 billion over 25 years.\nMr. Black, one of the leading advocates of\nshould be good news for cigarette stocks. It\nest so far in pc\nMoney manager Ben Fischer of NFJ In-\na settlement on Wall Street, puts the\ntheir mutual-f\n.86\n+22.58\ntakes a few worst-case scenarios off the\nvestment Group in Dallas notes that they\nchances at only 60% to 65% that Congress\nA year af\n6900\ntable, such as unlimited legal liability or\nstill could be subject to some lawsuits and\nwill enact the deal by year-end.\nAssociation c:\ndevastating regulation. So how come so\nthat nicotine could be banned entirely in\nCan the cigarette companies make the\n6875\nfunds with tol\nmany investors are dumping the stocks?\n2009.\nhuge settlement payments and continue to\nbeen a perce\nPhilip Morris, the world's premier cig-\n6850\nMessrs. Wardlaw, Goldman and Fi-\nprofit? Mr. Black notes that cigarettes are\n'socially con\narette maker, gained for about 20 minutes\nscher all expect the stocks to gain in the\na rare case of a still-legal and relatively\navoid the sec\n6825\nfollowing Friday's announcement, but\nlonger run. Mr. Fischer says he will hang\ncheap item that people can use to relax and\ntobacco, alco\nthen closed down 2, or 4.2%, at 45½. RJR\non to his group's more than one million\nrelieve stress. He thinks demand will con-\nNabisco Holdings lost 7/8 at 35. Loews,\npotentially ha\n6800\nshares of RJR, but he isn't buying more\ntinue. even if prices rise and ads are\nT\nW\nT\nF\nwhich owns the Lorillard brand in addition\nSuch fund\n\"What gets me is that this ish't the\nrestricted.\nto extensive insurance activities, fell 3½ to\n0.17% of the as\nend - this is only the beginning,\" Mr.\nHow do you know people will still want\n12-MO\n12-MO LOW\n103%.\nFischer says. 'You have to ask. is this\nfunds, about t\nto smokem 20 years? Well, I say, just look\n6086.30\nSome investors were taking profits;\nlower than fi\n6872.86\nreally a panacea? And then, what happens\nat marijuanal' the Bernstein analyst says.\nothers said they were surprised at the\nfund research\n104.11\n100.99\nif Congress takes this for a year and chews\nThat drug 18 neither legal nor advertised,\n754.78\nseverity of some settlement provisions or\non it?\" He worries that the stocks could be\ncago.\n680.83\nnotes, but upeople are still smoking\n119-27\n111-3\nworried about possible trouble getting\nin for volatility.\nAnd respo\nneeded congressional approval.\nSen. Trent Lott, the Republican major\n06\n788.67\nMr. Addes the math this way.\namong investo\nRex Wardlaw, who manages money for\nity leader, has said it will be September or\nWithout any settlement, he projects 1998\naccepted the A\nWells Fargo Bank's asset-management\n-0.11\nOctober at the earliest before Congress can\nper-share earnings for Philip Morris of\ntobacco and\n6.00%\nunit, still holds a lot of Philip Morris. But\nconsider the issue. In the meantime, oppo-\n$3 45. Based on Friday's close, the com-\ntheir no-smol\nhe says he has been taking some profits in\nnents will scrutinize the proposal for de-\npany's stock trades at 13 times that\nthe \"AMA Co\n5.80\nthe stock, which looks a lot less cheap than\nfects and mount their attack. \"There is a\namount, compared to 19 times for stocks in\nvestments.' A\nit did a few weeks ago. In anticipation of\nrisk of negative news now,\" notes Robert\nthe Standard & Poor's 500; liability worries\ntions to thous\n5.60\nthe settlement and because of some court\nBissell, chief investment officer at the\nmean investors today won't pay as much\ncome up with\nvictories, Philip Morris has gained a hefty\nWells Fargo asset management unit.\nfor a tobacco stock as for other consumer\nfunds, out of\n5.40\n60% from its low of the past 52 weeks, even\nAll the same, tobacco analysts includ-\nstocks.\nfunds: Almos\ncounting Friday's drop.\n5.20\ning Mr. Goldman of PaineWebber, David\nTo finance the settlement, the Bern-\nsocially consci\nT\nW\nT\nF\nWells Fargo is advising clients to cut\nAdelman of Morgan Stanley and Gary\nstein analyst expects cigarette makers to\ntobacco stocks\nback to the standard 2% weighting dictated\nBlack of Sanford C. Bernstein all say they\nraise prices about 50 cents a pack whole-\nPublic ser\n12-MO LOW\nby Philip Morris's size in the Standard &\nexpect Congress to approve the deal, prob-\nsale (more at retail), which he figures will\ning against\n5.30%\n4.77%\nPoor's 500 index, after previously urging\nably by year-end. \"Too many powerful\ncut consumption by about 11% and knock 15\nwhether that ti\n5.36\n4.83\nthem to take an \"overweight\" position in\nparties, from politicians and lawyers to\ncents off Philip Morris per-share earnings.\namong investo\n5.77\n5.37\nthe stock.\ninvestors and health-care providers, stand\nInterest costs of financing settlement pay-\nDoug Cogan, W\nPaineWebber analyst Emanuel Gold-\n5.88\n5.44\nto benefit.\nments will knock off another 10, cents,\nissues for the I\nman says he was surprised the companies\nBut passage is far from a sure thing.\nPlease Turn to Page C2, Column 3\nPlease Tw\n+0.2\n104.00\n103.75\nRise in Profit Guidance\nPrediction Effects\nSch\nAs preannouncements become more popular,\n103.50\npositive earning surprises have lost some\nDilutes Positive Surprises\nof their effect and negative surprises have\n103.25\nWith\nbecome more devastating\n103.00\nEarnings preannouncements\nT\nW\nT\nF\n\"We've had 17 consecutive quarters\n(quarterly and annual earnings)\n12-MC\n12-MOLOW\nABREAST\nIsn't\nLATE NY\nwhere companies have reported signifi-\n2,400\n1.7125\n1.5355\nOF THE\ncantly more positive than negative sur-\nprises. says Sandip A. Bhagat. chief\n1.800\nMARKET\nofficer of Travelers Investment"
}