While the uncertainty about the short-term investment outlook clouds the local as well as the national scene, brokers in the Washington area are optimistic and report that regional stocks generally have outperformed the national bear market.
"Our favorite stocks have held very well . . . they're just sitting there like rocks, except for Scope, Inc., which has gone up," noted William Godden, research specialist at Ferris & Co.
Timothy Corsini, director of research at Johnston Lemon & Co., Inc., said he thinks the recent increases in bank prime and short-term rates have stabilized, sending "a very bullish sign to investors to commit funds."
"Among the local investors, there's a mixed attitude," he said. "There are still a number of people who will walk in and buy a stock when the market is down on the theory that the best time to buy is when nobody else wants a stock. Others take a wait and see attitude."
Corsini attributed the continued slide in Wall Street prices to a lack of confidence in the administration and a number of uncertainties over the energy package, the tax package, and whether a tax cut will be forthcoming.
"I think we've seen the market just about bottom out for now," he said, "but I don't think the market will advance significantly until there's a true restoration of confidence."
He said, "As a matter of fact, things are pretty good now . . . corporate profits are up, things are in pretty good shape for internal investment. But until people individually are really sure the economics for business are better than they think they actually are now, the market will be stagnated.
Corsini said a number of local stocks "are extremely good buys, valued well under their worth," he cited Government Employees Insurance Co., and Criterion Insurance Co. as two of the "sourdest" purchases recommended by Johnston Lemon.
"They've done an awful lot for internally to improve their operations," he said. "Garfinckel, Brooks Brothers, Miller & Rhoads) on a yield an expansion basis is an extremely good purchase. We're estimating their earnings at $2.40 this year," compared with $9.7 million ($2.25 a share) in the year ended last Jan. 29.
Among his other recommendations were Marriott Corp., as a long term investment, most area retailers and the drug chains. The Washington Post Co. and Hechinger Co.
Godden said Ferris' recommendations to local investors include Scope, Giant Food, Preston Trucking, The Post Co., many of the regional bank holding companies and high-yield utility stocks.