Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Tue, Mar 10 1992 Date: Tue, 10 Mar 92 05:44:45 EST Message-ID: 03-10 0000 DECISIONLINE: Banking & Economy USA TODAY Update March 10, 1992 Source: USA TODAY:Gannett National Information Network BANK MERGERS ANNOUNCED MONDAY: Last year's bank-merger mania is continuing this year. Monday, Albany, N.Y.-based KeyCorp said it will buy Puget Sound Bancorp in a deal valued at $807 million. Each Tacoma, Wash.-based Puget Sound share will be exchanged for 0.88 KeyCorp share. Also, Charter One Financial agreed to buy First American Bancorp for $42 million, or $19.06 per First American share. DOW STARTS WEEK DOWN: The Dow continued last week's losses, starting the week down Monday. The Dow Jones industrial average fell 6.48 points to 3215.12 Monday after closing last week down 46.07 points. Over-the-counter stocks also slid, but other averages eked out gains. On the New York Stock Exchange, gaining stocks beat losers 884 to 852. CONSUMER DEBT LOWER: The Federal Reserve Board said Monday that consumer debt fell in January - the third month in a row. Consumer installment loans fell at a 0.3% annual rate after dropping at a 1.2% rate in December. Consumer credit includes all loans except mortgages and home equity loans. Also, in a positive sign for the economy, car loans increased 1.5%. BANK EARNINGS GROW: U.S. banks earned $18.6 billion last year, the most since 1988 and up 15% from 1990, the Federal Deposit Insurance Corp. said Monday. But the FDIC attributed the improvement entirely to one-time gains from the sale of bonds and other securities. Bank operating earnings - which exclude securities sales - fell slightly to $14.8 billion last year from $15 billion in 1990. GROWTHS PLANS SLOW RECOVERY: Economic growth packages proposed by President Bush and congressional Democrats are hurting the economic recovery because buyers and businesses are waiting for the anticipated tax breaks, a group of private economists says. The Shadow Open Market Committee also called for policies to curb inflation and urged the Federal Reserve to resist pressure to cut interest rates. ECONOMISTS OPTIMISTIC: The latest survey of 53 economists by Blue Chip Economic Indicators newsletter shows optimism about the economy. The consensus estimate of growth this quarter fell slightly to a 0.4% annual rate from 0.5%, but estimates for the rest of 1992 were raised. For the next three quarters, estimates rose to annual growth rates of 2.4%, 3.3% and 3.4% from 2.2%, 3.1% and 3.3%. RATES REMAIN HIGH: Long-term interest rates remain high despite efforts by Federal Reserve Chairman Alan Greenpsan and others to bring them down. Last week, Greenspan tried to talk the bond market into pushing rates down. Inflation, he said, is moving lower, which should mean "lower longer-term rates as well." But Monday, the yield on 30-year Treasury bonds was 7.87%, vs. its recent low of 7.39% Jan. 7. FDIC APPROVES MILKEN DEAL: A deal to settle more than 150 lawsuits against jailed financier Michael Milken won approval from the Federal Deposit Insurance Corp. Monday. The $1.3 billion plan was rejected last week by the FDIC, which said it needed more information about Milken's finances. The approval came after the agency received concessions on access to information and the ability to pull out. DISCOUNT RATE STEADY: The Treasury Department sold $11.4 billion in three-month bills at an average discount rate of 4.02%, unchanged from last week. Another $11.4 billion was sold in six-month bills at an average discount rate of 4.13%, up from 4.10% last week. OIL RALLIES AT CLOSE: Oil prices staged a late rally Monday, ending a slow trading session. Light sweet crude oil for delivery in April settled at $18.67 per barrel, up 16 cents, at the New York Mercantile Exchange. Sour crude for May delivery settled at $16.02 per barrel, up 11 cents. Traders said the market is waiting for news that could send crude either below $18 or above $19 per barrel. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Tuesday at 3215.12, after closing down 6.48 Monday. The New York Stock Exchange composite opens at 224.15, up 0.36. The American Stock Exchange market value opens at 407.21, down 0.74. The NASDAQ OTC composite opens at 615.82, down 0.13. DOLLAR OPENS MOSTLY DOWN: The dollar opens mixed on foreign markets Tuesday. It opens at 0.5807 British pounds, down from 0.5822; 5.6665 French francs, down from 5.6721; 131.90 Japanese yen, up from 131.75; and 1.6635 German marks, down from 1.6676. (As of 3 p.m. Monday. Source: First American Bank of New York.) 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: Jason P. Smith. (919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM