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 Thu, Jul 2 1992 Date: Thu, 2 Jul 92 05:20:10 EDT Message-ID: 07-02 0000 DECISIONLINE: Banking & Economy USA TODAY Update July 2-5, 1992 Source: USA TODAY:Gannett National Information Network CUTS ARE PART OF RESTRUCTURING: Some economists say the economy is in a recovery, but the more than 16,000 job cuts announced by four major U.S. employers this week have people asking what a recovery is supposed to look like. Among the most alarming news is Hughes Aircraft cutting 9,000 jobs and Aetna eliminating 4,800. Many experts regard the cuts as an ongoing restructuring of the USA's largest companies. CUTS CALLED `NOTHING': Most economists say the 16,000 job cuts announced this week won't damage the recovery. "These are peanut numbers," says economist Robert Brusca of Nikko Securities. "Nine thousand and 4,800 stretched over 18 months - that's nothing. In periods of employment growth we get between 200,000 and 300,000 jobs in one month." He says this weeks news ignores hiring at smaller firms. EXPECTED RATE CUT BOOSTS STOCKS: Stocks climbed Wednesday on expectations that the Federal Reserve might push interest rates lower to try to stimulate the sluggish economy. The Dow Jones industrial average gained 35.58 points to 3354.10. Speculation about whether the Fed might ease rates increased as the Federal Open Market Committee, the Fed's policymaking arm, met in Washington on Tuesday and Wednesday. (For more, see special Fed package below.) BILL TO TIGHTEN FINANCING: The Senate passed a bill Wednesday that would tighten controls on two government-sponsored agencies which provide financing for much of the USA's home mortgages. The bill, aimed at preventing a thrift-style loan disaster, sets minimum levels of capital the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. must maintain to guard against losses. DR PEPPER CANCELS STOCK SALE: Dr Pepper:Seven-Up, the nation's third-biggest soft-drink maker, withdrew plans to make an initial public offering of stock worth about $602 million. "The decision to cancel the IPO is based clearly on market conditions," says John Albers, chairman and chief executive. He says the offering did not attract enough institutional investors. CD YIELDS FALL: Bank certificate of deposit yields fell this week, Bank Rate Monitor says. The average yield on six-month CDs fell to 3.68% from 3.69% last week. Average yields on one-year CDs were 4.03% vs. 4.04%; 2 1:2-year, 4.91% vs. 4.93%; five-year, 6.10% vs. 6.14%. OIL PRICES INCREASE: Oil prices rose Wednesday, rebounding partially from Tuesday's big drop as traders learned the U.S. supply of crude oil had fallen sharply last week. Light sweet crude oil for delivery in August settled at $21.86 per barrel, up 26 cents, at the New York Mercantile Exchange. A day earlier, oil fell 64 cents a barrel as speculators staged a panicky sell-off. GOLD PRICES FIRM: On the New York Commodity Exchange, gold bullion for current delivery settled at $344.30 Wednesday, up $1.20 a troy ounce from Tuesday. Republic National Bank said gold rose $1 to a late bid price of $344. The metal fell in London and Zurich. Silver bullion was unchanged in London at a late bid price of $4.03. On the Comex, Silver rose to $4.029 a troy ounce from $4.028 late Tuesday. SPECIAL PACKAGE ON FED: NAPM INDEX SLIPS IN JUNE: Reports, including two Wednesday, indicating growth is slowing fueled speculation that the Fed will act on rates. The National Association of Purchasing Management said its business index slid to 52.8% in June from 56.3% in May, indicating the pace of expansion in manufacturing has slowed. Construction spending in May rose to an annualized rate of $423 billion, just 0.2% above April. EMPLOYMENT REPORT OUT THURSDAY: If the Fed does ease rates, most economists believe it will push the federal funds rate - what banks charge each other for loans - from 3.75% to 3.5% later this month. June's unemployment report is due Thursday. If it is disastrous, it could prompt the Fed to move as soon as Thursday. But most experts say the Fed will wait a bit to avoid the appearance of bowing to pressure from President Bush. (End of package.) DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Thursday at 3354.10 after closing up 35.58 Wednesday. The New York Stock Exchange composite opens at 226.75, up 2.42. The American Stock Exchange market value opens at 383.01, up 3.73. The NASDAQ OTC composite opens at 568.99, up 5.40. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Thursday. It opens at 0.5249 British pounds, down from 0.5260; 5.1015 French francs, down from 5.1265; 1.5208 German marks, down from 1.5243; and 125.28 Japanese yen, down from 125.77. (As of 3 p.m. Wednesday. Source: First American Bank of New York.) ADVISORY: Decisionlines will not be published Friday, July 3, in observance of Fourth of July. Decisionlines will resume publication on Monday, July 6. 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. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM