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Wall Street, California: Market Plunge

Cheap Enough to Buy?

September 01, 1998

The price-to-earnings ratios of most of these popular stocks have fallen with share prices in the last six weeks. This common measure of how "expensive" a stock is varies by industry, with technology companies in particular carrying high ratios because they are expected to have strong earnings in the future. Below, current P/E ratios are compared with the higher P/Es on July 17, the market's all-time high. The ratios are the stock prices divided by the last four quarters of earnings per share. The P/E may not have fallen in step with the price because lower earnings may have been reported in the interim.

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Monday One-day Monday July 17 Stock close pct. chg. P/E P/E Dayton Hudson 36.75 -16.4 24 30 Dell Computer 100.00 -15.8 60 81 Walgreen 38.38 -14.0 39 48 Cisco 81.88 -13.5 65 100 CBS 25.75 -12.0 23 32 Morgan Stanley 58.06 -11.0 14 23 American Express 78.00 -10.9 18 28 Coca-Cola 65.13 -10.5 42 56 Disney 27.44 -10.4 28 40 Home Depot 38.13 -10.2 43 58 AT&T 50.13 -10.2 16 20 Merrill Lynch 66.00 -10.2 13 21 Bristol Myers 97.88 -10.1 30 38 McDonald's 56.38 -10.1 25 32 Amer. Home Prod. 51.00 -10.1 28 29 Schlumberger 43.81 -10.0 16 25 Wal-Mart 59.00 -9.8 36 45 Schering-Plough 86.00 -9.5 40 50 Gap 51.06 -9.4 32 45 Merck 115.94 -9.0 28 35 Microsoft 95.94 -8.8 57 70 Pfizer 93.00 -8.5 49 61 Travelers 44.38 -8.2 12 21 IBM 112.63 -8.1 19 20 NationsBank 57.50 -7.7 16 23 Safeway 39.00 -7.7 21 31 Intel 71.19 -7.5 20 24 Xerox 87.81 -7.4 22 31 BankAmerica 64.50 -7.3 14 21 Pharmacia & Upj. 44.75 -7.2 80 81 Johnson & John. $69.00 -7.0 27 31 General Electric 80.00 -6.8 31 37 Glaxo Wellcome 55.38 -6.8 29 32 Oracle 19.94 -6.5 25 33 Procter & Gamble 76.50 -6.5 30 35 Ford 44.63 -6.4 8 10 SunAmerica 61.94 -6.2 26 30 Sun Microsystems 39.63 -6.2 15 27 3M 68.50 -5.7 14 16 Hewlett-Packard 48.56 -5.7 17 21 Ingram Micro 45.00 -5.6 30 33 Sprint 67.06 -5.6 34 37 Fannie Mae 56.63 -5.5 19 22 AirTouch 56.25 -5.4 57 63 Wells Fargo 281.88 -5.2 24 37 General Motors 58.13 -4.8 9 11 Campbell Soup 50.38 -4.2 34 37 Sony 70.69 -3.9 19 27 SBC Comm. 38.06 -3.9 22 23 Kimberly-Clark 38.06 -3.6 26 31 Exxon 65.44 -3.1 21 22 GTE 50.06 -2.9 21 24 Philip Morris 41.56 -2.9 16 15 Comp. Sci. 56.56 -2.7 33 41 Lockheed Martin 87.56 -2.5 15 18 Smithkline Beech. 56.88 -2.4 35 39 Bell Atlantic 44.13 -2.4 25 27 Gillette 41.13 -1.9 32 46 DuPont 57.88 -0.3 32 35 Edison Intl. 28.44 -0.2 15 16

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