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 Mon, Mar 16 1992 Date: Mon, 16 Mar 92 05:48:19 EST Message-ID: 03-16 0000 DECISIONLINE: Banking & Economy USA TODAY Update March 16, 1992 Source: USA TODAY:Gannett National Information Network ECONOMISTS SAY RECESSION OVER: A batch of rosy economic reports released last week - on top of good news a week earlier - has economists saying the recession is over. "The recovery is finally here," says economist Bruce Steinberg of Merrill Lynch Global Securities. Among evidence: Retail sales were strong the past two months; wholesale prices remained under control last month, rising just 0.2%. (For more, see special Recession package below.) STOCKS UP ON GOOD NEWS: Stock prices rose Friday after a new government report showed wholesale prices rose only 0.2% last month. The Dow Jones average of 30 industrials closed up 27.28 to 3,235.91. For the week, the index gained 14.31 points in volatile trading. Winners beat losers 996 to 669 on the New York Stock Exchange. The NYSE's composite index rose 0.51 for the week to close at 224.30. GM'S DEBT RATING DOWNGRADED: Standard & Poor's Friday cut its rating on $40 billion of General Motors senior debt to A- from A. S&P had been reviewing GM's debt since November, and the downgrade was expected. GM calls the downgrade, which dropped its debt to the seventh highest rating from the sixth-highest, disappointing. S&P cited the weak auto market and competition for the downgrade. CAR SALES JUMP: Friday's report that sales in the first 10 days of the month by five major U.S. automakers soared 15% suggests the industry may be headed for a rebound, analysts say. The improvement was led by a jump in light-truck sales. Toyota had the strongest showing, up 37% from last year. GM rose 16%, and Ford gained 15%. Ward's Automotive Reports estimates Chrysler sales rose 11%. Honda sales fell 6%. MORTGAGE RATES UP: Fixed mortgage rates rose last week to their highest level in five months, the Federal Home Loan Mortgage Corp. says. The average on 30-year, fixed-rate mortgages rose to 8.88% from 8.85% the previous week. The average has been rising since hitting 8.23% the week ended Jan. 10. One-year adjustable mortgage rates rose last week to an average 6.04% from 5.99%. AMEX NAMES 21 TO NEW LISTING: The American Stock Exchange on Friday named 21 companies lured from the over-the-counter market to trade on its new Emerging Company Marketplace, which is scheduled to start Wednesday. Firms in the new market have lower financial standards than now needed to qualify for the Amex. Amex bills it as a forum for growing companies to gain exposure and raise capital. ENERGY PRICES HEAD UP: Energy futures prices settled higher Friday in active trading. The near-month delivery contract for light sweet crude oil, which rose 33 cents on Thursday, gained another 35 cents to settle at $19.18 per barrel on the New York Mercantile Exchange. The near-month-delivery price for lower-grade sour crude settled at $16.47 a barrel, up 40 cents. Prices of refined products also gained ground. GOLD FALLS FURTHER: Gold futures fell slightly Friday in dull trading on New York's Commodity Exchange and lengthened Thursday's substantial losses. Spot gold closed on the Comex at $346.70, off 70 cents. The New York Republic National Bank set a price at 4 p.m. of $346.75, off 35 cents. Gold fell in London and Zurich. Silver turned higher. March silver rose 1.3 cents to $4.099 a troy ounce. SPECIAL PACKAGE ON RECESSION: BUSINESS INVENTORIES DOWN: In other good economic news out recently: Business inventories shrank last month, which means factories may have to beef up production so businesses can restock shelves; the University of Michigan's consumer-sentiment index rose to 74.6 early this month from 68.8 last month, suggesting consumers are feeling better about the economy; auto sales were up sharply early this month. MORE GOOD NEWS EXPECTED TUESDAY: Three reports Tuesday are expected to show more signs of recovery. Consumer prices are expected to show a modest 0.3% increase last month. February housing starts are expected to be up slightly. And factories are believed to have been a little busier last month than in January, according to MMS International's survey of economists. BOND MARKET MAY SLOW RECOVERY: Despite all the good news, economists still aren't about to predict a robust recovery. Some economists fear the bond market will squelch the recovery because investors are demanding higher yields on long-term bonds. Yields on 30-year Treasury bonds are at a four-month high. Most economists expect long-term rates to ease once investors realize the economy won't overheat. (End of package.) DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Monday at 3235.91, after closing up 27.28 points Friday. The New York Stock Exchange composite opens at 224.30, up 1.00. The American Stock Exchange market value opens at 404.06, up 0.47. The NASDAQ OTC composite opens at 618.62, up 2.70. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes violates federal law. This article is copyright 1992 Gannett News Service. 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