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A War Portfolio

Inside Wall Street


The Bush Administration's Jan. 15 deadline for Saddam Hussein to give up Kuwait is creating a sort of deadline for pros designing "war or peace" portfolios, too.

Sandra Dunekacke, a vice-president at Piper, Jaffray & Hopwood in Minneapolis, believes that if a war erupts, it will be swift and short. The market will react "quickly and emphatically" on the downside, she predicts, but only temporarily. One stock that Dunekacke has picked as a immediate winner in a war portfolio is Alliant Techsystems, a supplier of high-precision arms and ammunition to the U. S. government.

Dunekacke's other picks may get hit if war erupts but should bounce back faster than the rest of the market. A few of them, such as Fluor, an engineering and construction company, have the potential to be involved in the rebuilding of the infrastructure of countries in the gulf. Also included in this group are Halliburton, an oil-service company, and Johnson & Johnson, a maker of hospital supplies.

For investors who think that war will be averted, Dunekacke has constructed a peace portfolio of stocks that would benefit from lower oil prices and greatly improved consumer confidence. Among them: AMR, the parent of American Airlines; aircraft maker Boeing; hotel-and-theme-park operator Walt Disney; department-store chain Nordstrom; and lumber-and-plywood producer Louisiana-Pacific.GENE G. MARCIAL

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