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FOOD STOCKS POST RECOVERY FROM WILD WALL STREET RIDE

NEW YORK -- Major retail food stocks recovered fairly well during last week's roller-coaster ride on Wall Street, according to financial analysts.range of retail, wholesale and diversified stocks, showed food shares overall slightly underperformed the Standard & Poor's 500 in the week ended Sept. 3 (see table at right).Analysts said food retail stocks had not been affected by earlier market turmoil

September 7, 1998

1 Min Read
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NEW YORK -- Major retail food stocks recovered fairly well during last week's roller-coaster ride on Wall Street, according to financial analysts.

range of retail, wholesale and diversified stocks, showed food shares overall slightly underperformed the Standard & Poor's 500 in the week ended Sept. 3 (see table at right).

Analysts said food retail stocks had not been affected by earlier market turmoil two weeks ago. However, as the Dow Jones Industrial Average fell more than 500 points last Monday, "investors began wandering around looking for sectors that had not been hit," said Mark Husson, an analyst with Merrill Lynch here. "And when they found the retail food sector, they gave it a good hard shove to see if it would fall over -- and it did."

But the sector bounced back Tuesday "because the fundamentals of these stocks is so good, and when the market is down, people come back to these stocks," Husson said. Chuck Cerankosky, an analyst with McDonald & Co., Cleveland, said food stocks "recovered to some degree during a pretty nasty week," and several were showing signs of recovery at mid-week from their performance last Monday -- "a day there was a lot of red on my computer screen as the whole sector went down as a group."

"But their recovery was a little better than the market overall," Cerankosky said.

Ted Bernstein, a high-yield analyst with Grantchester Securities here, said last week the high-yield market "weakened significantly across the board -- supermarkets less so than more cyclical industries.

"But on days with big selloffs, like last Monday, everything gets hit indiscriminately. Since then, investors have been looking again at high-yield supermarket bonds [that] are a defensive investment alternative."

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