DEVELOPMENTS PROVIDE MARKET FOR BARGAIN HUNTERS

News of the ouster of Soviet President Mikhail Gorbachev prompted a 3.2 percent drop in the Dow Jones but offered investors a chance for bargain hunting, said local stock brokers.

On Monday the Dow Jones average of 30 industrial stocks fell 69.99 to a close of 2,898.03.

"There were bargain hunters out there today. Those who bought early did very well," said Marsha Limbaugh of A.G. Edwards & Sons.

"Overall, it created some excellent buying opportunities," Limbaugh said. "In a way it was good for those investors waiting for an opportunity to buy. The market (Monday) provided them the ability to buy in at reasonable levels.

"People seemed to have learned their lesson from the October 1987 debacle and the Gulf War. Investors learned that selling was the wrong thing to do; they are better off holding or buying into those dips which created more reasonable buying opportunities."

She said Monday's trading reflects "more confidence in our domestic market."

The 70-point drop was the largest drop since Oct. 9, 1990, when the index shed 78 points, said Bob Etherton of Edward D. Jones, 211 N. Sprigg.

But, he said, "The developments created some good buying opportunities. Local investors were looking for a bargain."

Donna Domian of Edward D. Jones, 1749 Independence, said: "We are seeing this as an opportunity. We had some bargain hunters. Many buyers saw they could buy stocks at substantially lower costs.

"At the same time we saw a flight to quality. People were looking for quality stocks and a chance to pick up a favorite stock a dollar or two cheaper."

Domian said, "We would label this, at this point, an events risk rather than a severe crisis."

A market crisis would be prompted by a recession, a war, or a major change in interest rates.

Brokers this morning were greeted with the news that the German market was down 10 percent.

Domian said: "If the American market would have been down 10 percent, that would be 300 points. In fact, the market was down only 2.3 percent. So in terms of what could have happened and what did happen, we finished better."

When the Dow Jones opened Monday it dropped more than 100 points but recovered by about 50 points by noon. The market closed down 70 points.

While the market news was fairly positive Monday, Domian said investors should continue to monitor the Soviet situation.

"If events continue to decline and an outright civil war breaks out, things could change," she said. "The stock market is certainly a worldwide situation; the U.S. market certainly has worldwide economic ties."

The drop in the market was expected by brokers who watched as foreign markets closed down. But they said the U.S. market situation, at the present time, is fairly stable.

"Nobody can predict the market in the short-run," Limbaugh said. "It is always subject to overnight developments.

"We just encourage our investors to look long-term, to look at individual companies, and not to worry.

"We will be looking more toward the economic recovery," Limbaugh said. "We're in the early stages of the recovery and we believe that's where investors should focus their attention, more so than on developments in Russia."