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 25 1992 Date: Wed, 25 Mar 92 05:43:34 EST Message-ID: 03-25 0000 DECISIONLINE: Banking & Economy USA TODAY Update March 25, 1992 Source: USA TODAY:Gannett National Information Network AUTO SLUMP RETURNS: A mild recovery in auto sales stalled in mid-March, as U.S. auto sales fell 1.4%. Also, the seasonally adjusted annual selling rate of cars fell to 5.8 million March 11-20 vs. 6.2 million a year earlier. Only Toyota showed strength: Sales soared 32%. Ford sales edged up 2% while GM dropped 9%. Honda sales were off 12%. Ward's Automotive Reports estimates Chrysler sales were flat. DOW DOWN TUESDAY: Concerns over the economy and corporate profits sent stocks down Tuesday for the second straight day. The Dow Jones industrial average slipped 11.18 points to 3260.96. Other market indexes also slumped. Falling stocks beat winners 1,001 to 740 on the New York Stock Exchange, where volume was 192 million shares. AUTO SALES DRIVE DOWN STOCKS: News that auto sales took a turn for the worse in mid-March caused stocks to fall Tuesday. Al Goldman, analyst at A.G. Edwards & Sons, says the news cooled investors' hopes that the economy - and, therefore, corporate profits - are emerging from recession at a rapid pace. "It was a reminder that hey, we don't have an over-heated recovery on our hands," Goldman says. SELLING COULD MEAN TROUBLE: Stock analysts are concerned that recent selling by computer industry insiders spells trouble for tech stocks and possibly for all stocks. Selling by insiders at high-tech companies in early 1990 came before a drop in the market that summer. Eight executives and directors sold $203 million of Microsoft stock last month. Nine insiders sold at Sun Microsystems and seven at Apple Computer. HIRSCH SEES CORRECTION: Mutual-fund picker Michael Hirsch, who invests more than $400 million in mutual funds for private clients and the five FundTrust mutual funds, which invest only in other funds, sees a market correction of 15% to 25% on the way. "Unless you think we're going to have one of the most bombastic recoveries in history, the stock market is neither undervalued nor fairly valued." Hirsch says. BANKS EXPECT PREMIUM INCREASE: Banks expect the Federal Deposit Insurance Corp. to soon increase the premiums they pay for deposit insurance. The FDIC is expected to raise bank premiums by summer to 30 cents for every $100 in deposits from 23 cents. Forcing the increase: The large number of banks that have failed in the past seven years, draining the fund that pays off depositors when banks fail. COSTS WILL BE PASSED ON: Bank depositors will likely pay part of the expected increase in premiums for deposit insurance that banks pay to the FDIC, analysts say. "Any bank that wants to stay profitable and solvent is going to have to pass on those costs," says Charles Held, president of Bank One of Dayton, Ohio. Results: Higher monthly fees or lower rates of interest for depositors. RTC FUNDING APPROVED: The Senate Banking Committee Tuesday approved an additional $25 billion in financing for the Resolution Trust Corp. for the continued bailout of the savings and loan industry. The bill, which was sent to the full Senate, includes a provision that requires regulators to make public examination reports of banks and S&Ls that later failed. LAW USED INCORRECTLY: The Supreme Court Tuesday refused to let a brokerage account insurer use anti-racketeering laws to recoup money investors lose if a brokerage fails. The justices said the Securities Investor Protection Corp. wrongly invoked an anti-racketeering law in efforts to recover money paid to customers of two brokerage firms that went out of business. OIL PRICES RISE: Light sweet crude oil for delivery in May settled at $19.22 per barrel, up 9 cents Tuesday on the New York Mercantile Exchange. Lower-grade sour crude for delivery in May settled at $16.50 per barrel, up 12 cents. Home heating oil for delivery in April settled at 53.21 cents a gallon, down .33 cent. Unleaded gasoline for delivery in April settled at 57.79 cents a gallon, up .03 cent. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Wednesday at 3260.96, after closing down 11.18 Tuesday. The New York Stock Exchange composite opens at 225.89, down 0.50. The American Stock Exchange market value opens at 399.57, down 1.79. The NASDAQ OTC composite opens at 618.68, down 3.15. DOLLAR OPENS DOWN: The dollar opens down on foreign markets Wednesday. It opens at 0.5811 British pounds, down from 0.5826; 5.6395 French francs, down from 5.6561; 133.43 Japanese yen, down from 133.73; and 1.6625 German marks, down from 1.6688. (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