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 Wed, Mar 18 1992 Date: Wed, 18 Mar 92 05:44:27 EST Message-ID: 03-18 0000 DECISIONLINE: Banking & Economy USA TODAY Update March 18, 1992 Source: USA TODAY:Gannett National Information Network INFLATION REMAINS LOW: The Labor Department said Tuesday that consumer prices rose just 0.3% last month - only 3.5% annually. For the first two months of 1992, inflation is up at just a 2.2% annual rate. Excluding the volatile food and energy categories, consumer prices were up 0.4% in February. Also, Labor said Workers' average weekly earnings grew by 4.1% in the year ending in February. HOUSING STARTS SURGE: The Commerce Department said Tuesday that housing starts jumped 9.6% from January to February, for an annual rate of 1.3 million homes - highest since March 1990. Most of the gain came from starts of single-family homes, which were up 14.7%. Starts are up 37.6%, even though mortgage rates have begun to edge up to the 9% mark from close to 8% in early January. FACTORY OUTPUT RISES: Output at the nation's factories, mines and utilities rose 0.6% in February - the biggest increase since July - after dropping in November, December and January, the Federal Reserve said Tuesday. Auto and truck production led the way, up 11.9% last month. The Fed's industrial production index stood at 107.2% of its 1987 base, up from 106.6% in January. GOLD HITS SIX-YEAR LOW: Low inflation has brought gold prices down to their lowest level in six years. Comex gold dropped to $340.60 an ounce, and was as low as $337.30 in early trading. The last time gold closed that low: June 24, 1986, when it fell to $342.09. Also weighing down gold: Widespread expectation that South African whites would vote for political reform. U.S. TRADE DEFICIT FALLS: Payments from allies toward the cost of the gulf war helped the U.S. current account trade deficit shrink to its lowest level in nine years last year, the Commerce Department said Tuesday. The deficit dropped to $8.6 billion from $92.1 billion in 1990. Record exports and lower demand for imports due to the recession also helped narrow the gap. STOCKS RISE ON REPORTS: Government reports that housing starts picked up in February and inflation remained under control pushed stocks higher Tuesday. The Dow Jones industrial average rose 19.68 points to 3256.04. Other indexes also rose. Advancers beat decliners 1,051 to 651 on the New York Stock Exchange, where volume was light at 188.8 million shares. STOCKS COULD SURGE: With inflation low, some analysts say stocks are ready to break out of a narrow trading range - Dow between 3200 and 3290 - at the first report of improved corporate earnings. Tucker Anthony market strategist William LeFevre says, "Once we get enough evidence to convince people the recovery is real, we could get an explosion in the stock market. We just don't know how long it is." YIELDS DROP TUESDAY: Yields on notes and bonds fell Tuesday on news that consumer inflation remained low in February. Yields on 30-year Treasury bonds fell to 8.00% from 8.07% Monday. Bond traders had pushed up yields on those bonds from 7.79% at the end of February on worries about inflation. MACY'S REPORTS LOSS: Retailer R.H. Macy, which filed for Chapter 11 bankruptcy court protection Jan. 27, said Tuesday it lost $671.6 million the latest quarter. Though most of the loss came from one-time charges of more than $600 million related to its reorganization, Chairman Edward Finkelstein says Macy's bankruptcy filing will gives it a chance to clean up its balance sheet and improve operating results. OIL PRICES MIXED: Oil prices were mixed Tuesday in largely technical trading. Light sweet crude oil for delivery in April settled at $19.24 per barrel, up 9 cents, at the New York Mercantile Exchange - its highest close since $19.46 Feb. 14. Lower-grade sour crude for delivery in May settled at $16.50 per barrel, up 10 cents at the Mercantile Exchange. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Wednesday at 3256.04, after closing up 19.68 Tuesday. The New York Stock Exchange composite opens at 226.01, up 1.57. The American Stock Exchange market value opens at 405.64, up 2.76. The NASDAQ OTC composite opens at 623.27, up 5.33. DOLLAR OPENS DOWN: The dollar opens down on foreign markets Wednesday. It opens at 0.5757 British pounds, down from 0.5807; 5.6390 French francs, down from 5.6610; 132.85 Japanese yen, down from 133.84; and 1.6455 German marks, down from 1.6617. (As of 3 p.m. Tuesday. 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