News of the Week
Chemical stock index underperforms other major indexes June 2, 1989
''In the Soviet Union now there's the same problem as you have here in the U.S.—to make the sciences better understood by the general public and the young generation," says Alexander Pokrovsky, director of the Moscow office of UNESCO. Pokrovsky believes that the new international curriculum could be just what is needed to help address this problem. Stu Borman
Chemical stocks lag other market sectors The stock market hit a new high early last week, but chemical stocks are not joining in the action. On Friday, June 1, weak employment figures for May, the third straight month, along with continued speculation that interest rates might drop—indicating a possible slowdown but not a recession—led investors to drive the Dow Jones Industrials Average just above the 2900 mark. The Dow Jones average jumped to a new high of 2935 on Monday, June 4. Technology stocks led the market, followed by financial, utilities, and transportation issues. However, chemical stock prices, as measured by the C&EN stock price index, remained at 534 on Friday (1954 = 100), the same as for the previous two weeks. By the close of trading on Monday, the index rose to only 542. The C&EN index is based on the weighted market value of the stocks of American Cyanamid, Dow Chemical, W. R. Grace, Hercules, Monsanto, Rohm & Haas, and Union Carbide. Overall, the chemical index is down 7% from a year ago this time, underperforming all other major indexes—which rose an average of 9%. The chemical index's all-time high was 634, reached last September. That chemical stocks are lagging other sectors of the market is not entirely unexpected in view of the latest overall performance of the chemical industry. After six years of profit growth in the past seven, earnings declined through 1989, ending the year 6% below 1988 levels. And the first quarter of 1990 started off bad6
June 11, 1990 C&EN
C&EN chemical stock index Dow Jones Industrial Average
575
June 1, 1990
534
% change
-7.1 %
2517.83
2900.97
New York Stock Exchange Composite
181.49
198.03
9.1
New York Stock Exchange Industrials
218.10
243.65
11.7
American Stock Exchange Index
360.47
363.83
0.9
Over-the-Counter Composite
451.63
462.13
2.3
Over-the-Counter Industrials
447.78
492.15
9.9
Standard & Poor's 500
325.52
363.16
11.6
Standard & Poor's 400 Industrials
372.99
423.95
13.7
ly; earnings at 30 major chemical companies fell an average of 26% from year-earlier levels (C&EN, May 21, page 12). Lower chemical prices, only slight gains in productivity, and a decline in chemical industry employment in May after three flat months all contribute to the poor outlook reflected in stock values. Other factors are the continued weakness in downstream markets such as housing, automobiles, and agriculture. After the record high on June 4, the stock market declined slowly
15.2
through the week. With news reports that the Federal Reserve board was not looking to change its monetary policy and ease interest rates, investors began selling and taking their profits from the market. The Dow Jones Industrials Average dropped 10 points on Tuesday, 13 points on Wednesday, and another 14 points on Thursday. At the same time, the chemical stock index rose slightly, about 1%, to 547, because of gains in stock values of Union Carbide and Monsanto. Ann Thayer
Ground broken for Advanced Photon Source Construction of the Advanced Photon Source (APS) formally got under way last week with groundbreaking ceremonies at Argonne National Laboratory. The APS, described as "a third-generation synchrotron radiation source" (C&EN, Sept. 19, 1988, page 22), will provide x-ray beams roughly 10,000 times brighter than those obtainable from existing x-ray sources. A r g o n n e d i r e c t o r A l a n L. Schriesheim notes that the $456 million project, set for completion in 1995, is the largest federal science project to start up this year, and the biggest federal construction project for Illinois since the building of Fermilab a quarter-century ago. U.S. Senators and Representatives from Illinois, setting aside party lines and regional hostilities, worked together to push funding for the project through Congress. Sen. Alan J. Dixon (D.-Ill.) calls the APS "a success story for the entire Illinois Congressional delegation." Rep. Harris W. Fawell (R.-I11.), who has been called "Argonne's Congressman/' adds, however, that it's not a pork-barrel project. Instead, he
asserts, the APS is "one of the most peer-reviewed projects ever organized by the Department of Energy" The APS will be a "national resource" available for use by academic, industrial, and government researchers from all over the U.S., Argonne points out. Consequently, the facility will be "user-oriented," and potential users have participated in its planning and design. Users are expected to spend another several hundred million dollars (over the $456 million cost of the APS itself) to build their beam line stations. Before the end of the century, more than 1000 visiting scientists and engineers will be using the facility every year, Argonne predicts. The superbright x-rays are expected to promote both basic research and practical advances in many scientific fields. In chemistry, for example, the APS will make it possible to study intermediates in reactions taking place in only 40 billionths of a second. In medicine, the APS could lead to simpler and safer x-ray studies of coronary arteries. Ward Worthy
