Starting with the index of 30 Washington-area stocks in today's editions of The Washington Post, there have been significant changes in both the composition and numerical base of the market indicator.
Johnston, Lemon & Co., a Washington investment firm, designed the index and has been computing market activity as measured by the local stocks since the mid-1970s.
Because of active merger and acquisition developments affecting local firms in recent months, three corporations that were part of the index no longer have a separate corporate identity. Drug Fair Inc., a retail drug chain, was acquired by Gray Drugs of Cleveland; the Macke Co., a vending firm, was acquired by Alleghny Beverage of Baltimore and Quality Inns International, a hotel company, was merged into Manor Care Inc., a nursing center operator.
To replace Drug Fair, Macke and Quality in the Johnston, Lemon index, the following firms have been added:
Manor Care, now the parent of Quality Inns. Based in Silver Spring, Manor Care is listed on the American Stock Exchange.
Fairchild Industries, a Montgomery County company listed on the New York Stock Exchange that is a leading defense contractor through its aerospace business. Fairchild also owns half of American Satellite, a domestic communications firm.
Scope Inc., a diversified electronics company in Reston that manufactures communications and weighing and counting equipment. Scope is traded over-the-counter.
By substituting three new companies, the numerical base of the index has been changed. Johnston, Lemon uses 1970 and 1971 prices for a base period equal to 100 on the index. The index closed Friday, using the new formula, at 225.758, down from 227.668 a week ago and 232.527 the week before that. In contrast, the old index a week earlier was 172.594, down from 175.564.