AD STOCKS OUTPACE SOARING DOW: ADMARKET 50 RISES 17.2% IN 1ST QTR.; AD AGENCIES CLIMB 25.1% IN PERIOD

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In the first quarter, the Advertising Age/Money.com AdMarket 50 outpaced the Dow Jones Industrial Average, now hovering around the 9,000 mark.

The AdMarket 50 index rose 17.2% to 1,172.09 between the close of the New York Stock Exchange on Jan. 2 and March 31, while the Dow Jones Industrial Average rose 10.5% during the same period to close at 8,799.81 on March 31.

The index rose even more sharply the following week, when it broke through the 9,000 mark on April 7, following the news of the merger agreement between Citicorp and Travelers Group.

Ad agency stocks were some of best performers in the index, thanks in part to wide speculation about the future of Saatchi & Saatchi PLC, London.

SAATCHI IS TOP GAINER

Saatchi's stock saw the sharpest increases among all AdMarket stocks, closing at $13.63 on March 31, up 52.5% from $8.94 at the market close on Dec. 31. The company has been rumored to be in play, including speculation that MacManus Group, New York, wanted to buy it in an effort to go public in a "reverse takeover," where MacManus would trade under Saatchi's stock listing.

A spokesman said Saatchi "categorically denies" the rumors and CEO Bob Seelert also said there was no merit to the talk in a separate statement; a MacManus spokeswoman also denied the speculation.

Saatchi's former sibling, Cordiant Communications Group, London, was a laggard, rising only 12.5% to close at $10.69 from a close of $9.50 at yearend. Saatchi & Saatchi and Cordiant both began trading at $9.25 per share when the former Cordiant split apart on Dec. 15.

Overall, the agency group rose 25.1% during the first quarter, to close at 1,250.85 on March 31. Chicago-based True North Communications, having completed its acquisition of Bozell, Jacobs, Kenyon & Eckhardt, New York, on Dec. 30, was the second-fastest mover of the agency group, rising 33.3% from a close of $24.75 on Dec. 31 to $33 per share on March 31.

CKS REGAINS GROUND

CKS Group, Cupertino, Calif., whose stock had taken a severe beating during the third quarter, regained some of its lost ground, rising 33.2% to close at $18.81 per share March 31, from $14.13 per share Dec. 31.

CKS stock underwent a meltdown Nov. 10, dropping 63.1% to $13.38 from $36.25 per share when the company announced it would earn only 6 cents to 10 cents per share during the fourth quarter, rather than match analysts' earnings projections of 24 cents per share. The company has restructured since then, and stepped up new-business development activities to improve the revenue flow and boost its share price.

The ups and downs of the marketers group closely followed the Dow Jones index -- not a shocker, since half the group repeats the blue-chip companies that make up the Dow Jones index, such as American Express Co., Coca-Cola Co., General Motors Corp., McDonald's Corp. and Procter & Gamble Co. The marketers' group closed at 1,138.43 on March 31, up 13.8% from yearend.

REVLON'S DRAMATIC CLIMB

Revlon was the marketer with the most dramatic increase in its stock price, up 40.9% to close at $49.75 per share on March 31, from $35.31 Dec. 31.

Conversely, RJR Nabisco Holdings Corp. took the worst beating among all AdMarket stocks, dropping as anti-smoking legislation continues to threaten the company. Philip Morris Cos. also faced a sharp drop in its stock price, declining 7.9%, to $41.69 from $45.25.

Kellogg Co., still facing price pressures in the cereal business, dropped 13.1% to $43.13.

The media index also tracked the Dow Jones closely, closing at 1,126.98 on March 31, up 12.7% from Jan. 2, as Academy Award-winning "Titanic," radio consolidations and improvement among cable companies helped buoy many stocks in that category.

Viacom, parent of Paramount Pictures and Blockbuster Video, has been planning to spin off various divisions. During the first quarter Viacom benefited from a rebound by the video retailer while continuing to reap a box-office bonanza from Paramount's share in the U.S. distribution rights to "Titanic." Its stock rose 30% to close at $53.13 on March 31, from $40.88 on Dec. 31.

CHANCELLOR RADIO UP 22.6%

Radio conglomerate Chancellor Media Corp., helped along by its major role in the ongoing radio market consolidation, rose 22.6% during the first quarter, to $45.75 from $37.32 at yearend.

Paramount's partner on the "Titanic" venture, Twentieth Century Fox, helped its parent News Corp., as did its Fox TV network. News Corp. stock rose 20.8% to close at $26.94 on March 31, up from $22.31 on Dec. 31.

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