Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Fri, Jun 26 1992 Date: Fri, 26 Jun 92 05:19:54 EDT Message-ID: 06-26 0000 DECISIONLINE: Banking & Economy USA TODAY Update June 26-28, 1992 Source: USA TODAY:Gannett National Information Network STOCKS DIP ON EARNINGS NEWS: Stocks dipped Thursday as isolated reports of bad earnings news shook investors' confidence. The Dow Jones industrial average fell 6.69 points to 3284.01. Broader indexes also were down. Gainers beat losers 861 to 815 on the New York Stock Exchange, where volume was 183 million shares. SOME EXPECT IMPROVEMENT: Some market watchers are hoping that a parade of unimpressive economic figures will spur the Federal Reserve to cut interest rates and stimulate the economy. Even without a rate cut, some analysts are looking for improvement. Worries over earnings are greatest near the end of a quarter. Such anxiety should subside in a few days, Pirrone says. "We're pretty close to a rally." ECONOMY GROWS IN FIRST QTR.: The economy grew at an annual rate of 2.7% in the first quarter of 1992, the briskest pace of the Bush presidency, the government said Thursday. The increase in the GDP, the country's total output of goods and services, was revised up from a 2.4% estimate made a month ago. An accompanying report showed that after-tax corporate profits jumped 11.3% in the first three months of the year. FIRST-TIME JOBLESS CLAIMS JUMP: More Americans filed for unemployment benefits for the first time in mid-June, the Labor Department reported Thursday. Claims rose to 422,000 during the week ending June 13, up from 406,000 a week earlier. The report also showed the four-week moving average of new claims rose to 411,000. Many analysts prefer to watch the four-week average because of the volatility of the weekly filings. HOME SALES SLIDE: Sales of existing homes fell 1.7% last month from April, slowed by a sluggish economy and the lingering effects of last winter's rise in mortgage rates. The National Association of Realtors reports that sales of existing homes fell to a seasonally adjusted annual rate of 3.43 million units. That follows April's 0.6% drop. "The market continues to flatten," says economist David Berson. HOUSING MARKET NEEDS JOB GROWTH: There is some good news for the housing industry. Mortgage rates fell in April and May. The average mortgage rate last week was 8.48%. That appears to be boosting sales, but economists say the housing industry won't get back into high gear until the overall economy picks up. "We need several months in a row of good job growth," says economist David Berson. U.S. FIRMS LOOK TO SHORT TERM: A new study compiled by the Council on Competitiveness and the Harvard Business School says that shortsightedness by U.S. companies is the reason for their failings. It says the U.S. capital investment system favors short-term investments in physical assets such as plants and equipment - instead of long-term investments in intangibile assets such as training and research. M2 DOWN: A closely-watched measure of the USA's money supply dropped $2.6 billion to $3.5 trillion the week of June 15, the Federal Reserve says. So far this year, M2 has grown at an annual rate of 1.8%, below the Fed's target range of 2.5% to 6.5%. Economists consider lack of growth of the money supply a bad sign for the economy. M2 is cash, checking accounts and money market mutual funds. CITIBANK SETTLES BOND GRIPES: Citibank settled government complaints that it didn't properly handle canceled bonds, without admitting guilt, by agreeing to improve its bond cancellation procedures. What happened: Canceled bonds that were supposed to have been destroyed started turning up overseas. Eventually, the Office of the Comptroller of the Currency says, $640 million of worthless bonds were sold. CRUDE OIL TRADERS TAKE PROFITS: Crude oil gave back its gains from a day earlier Thursday as traders locked in their profits. On the Mercantile Exchange, the price of benchmark light sweet crude for August delivery dropped 31 cents to $22.58 a barrel, erasing Wednesday's 30-cent gain. Refined petroleum products futures also lost ground. Wholesale home heating oil for July delivery fell .50 cent a gallon to 63.16 cents. GOLD AND SILVER RISE: Gold and silver prices rose Thursday. Gold bullion for current delivery was $343.20 per troy ounce, up 40 cents. Republic National Bank quoted the metal at $342.80, up 15 cents. Gold prices rose in London and Zurich. Silver bullion rose in London to $4.04, up from $4.03. On the Commodity Exchange, silver finished at $4.002, down from $4.021. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Friday at 3284.01 after closing down 6.69 Thursday. The New York Stock Exchange composite opens at 221.53, down 0.28. The American Stock Exchange market value opens at 374.15, down 0.05. The NASDAQ OTC composite opens at 548.20, down 3.19. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Friday. It opens at 0.5284 British pounds, down from 0.5319; 5.8120 French francs, down from 5.2175; 1.5395 German marks, down from 1.5495; and 125.26 Japanese yen, down from 126.46. (As of 3 p.m. Thursday. 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: 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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