A widely respected Wall Street strategist on Monday placed Fannie Mae alongside stock market titans General Electric Co., Microsoft Corp., and Wal-Mart Stores Inc. as one of the few sure bets for 1998.
"This is a time when we have to focus on individual stocks," said A. Marshall Acuff, equity strategist with Salomon Smith Barney. "The key is on consistency of growth, and Fannie Mae has delivered for the last 10 years."
Mr. Acuff was speaking at an investors conference that Salomon Smith Barney hosted to discuss the recent twists and turns of the equities market.
Fannie Mae, whose shares stayed at $58.4375 on Monday, is likely to remain a solid bet because of low interest rates and strong demand for housing, Mr. Acuff said.
As for Salomon Smith Barney's view of bank stocks in general, the company has pulled back its enthusiasm for money-centers and thrifts, but remains very bullish on regionals.
Banks' shares in general rose modestly Monday, after last week's string of declines.
Investors appear to have mixed opinions about trust banks that, because of their focus on money management and private banking, have more exposure to overseas volatility - though the exposure is indirect - than many similar-size mainstream commercial banks.
Northern Trust Corp. rose $2.875, to $64.375, after being named to the Standard & Poor's 500 stock index - a profile-raising designation. The Chicago banking and trust services company replaces Whitman Corp., a beverage and consumer goods company that is restructuring.
Bankers Trust New York gained $1, to $105.1875, after reporting solid fourth-quarter earnings and easing analysts' fears that its operations, like those of J.P. Morgan & Co., would be hit by large trading losses.
"We were apprehensive about what the Bankers Trust report might hold," said David Berry, research director at Keefe, Bruyette & Woods.
Mr. Berry raised shares to "attractive" from "market perform," citing the banking company's "reassuring performance, including evidence of good risk management and strong corporate finance results."
Still, Bankers Trust has not been untouched by the Asia financial flu - the company's risk management group posted a $41 million loss from developments overseas. But the bank's trading and sales unit earned $61 million, due to strong foreign exchange results.
U.S. Trust fell $1.0625, to $56.875, after analyst Neal M. Epstein of Putnam, Lovell & Thornton initiated coverage with a "hold" ranking.
The Standard & Poor's bank index gained 0.31%, and the Dow Jones industrial average rose 0.16%. The Nasdaq bank index increased 0.11%, and the S&P 500 was down 0.06%.
TCF Financial climbed $1.125, to $31.875, after McDonald & Co. initiated coverage with a "buy" ranking.
The $10 billion-asset Minneapolis company "is the best-run bank next to Norwest Corp.," said McDonald analyst Gerry Cronin.
He credits TCF chairman William Cooper for turning "what was essentially a dead thrift into a successful banking company with a focus on lower and middle income people."
From an operational standpoint TCF "is in the company of Fifth Third Bancorp, Star Bank," among others, Mr. Cronin said. "And I like that company."
He also likes Mr. Cooper's commitment, as chief stockholder. "You know where his interest lies," Mr. Cronin said.