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 Tue, Jul 21 1992 Date: Tue, 21 Jul 92 06:06:53 EDT Message-ID: 07-21 0000 DECISIONLINE: Banking & Economy USA TODAY Update July 21, 1992 Source: USA TODAY:Gannett National Information Network STOCK MARKETS FALL WORLDWIDE: Worries over a plunging dollar and other global economic problems sent stock markets tumbling around the world Monday. The Dow Jones industrial average, down as much as 40 points, ended 29 points down at 3303. In Tokyo, the benchmark Nikkei average fell 4%. Hong Kong's main index fell 2%. The main German stock index sank 3%. Italy's Milan stock index fell 6%. (For more, see special World package below.) BANKAMERICA REPORTS RESULTS: BankAmerica, the USA's second-biggest bank company, said Monday it earned $240 million, or 63 cents a share, in the second quarter. But the company said the results, the first since it acquired Los Angeles' Security Pacific April 22, weren't comparable to any past quarters. Throw out one-time items, and BankAmerica earned $421 million, or $1.19 a share, better than many analysts expected. DOLLAR ON THE SKIDS: The dollar is trading close to post-war lows against the German mark. Low U.S. interest rates - and rising German rates - are hurting the dollar. The U.S. Federal Reserve Board's key discount rate has fallen to 3% from 5.5% a year ago. Germany's discount rate has risen from 6.5% to 8.75%. Investors are selling dollar-denominated investments and buying German investments. GREENSPAN TO FACE SENATE PANEL: Alan Greenspan likely faces tough questioning when he gives his semiannual report on the state of the economy to the Senate Banking Committee Tuesday starting at 10 a.m. ET. Greenspan, chairman of the Federal Reserve, will testify before the House Banking Committee Wednesday. RATES DOWN AT TREASURY AUCTION: Interest rates on six-month Treasury securities fell in Monday's auction to the lowest level in 29 years, while rates on three-month securities hit a 20-year low. The Treasury Department sold $11.7 billion in six-month bills at an average discount rate of 3.24% vs. from 3.31% last week. And $11.6 billion in three-month bills were sold at an average discount rate of 3.16% vs. 3.22% last week. JAPAN GETS MARKET WATCHER: Japan's first securities watchdog - the Securities and Exchange Surveillance Commission - started work Monday, but it is already facing criticism. The SESC is part of the Ministry of Finance, which was widely assailed for failing to prevent securities and banking scandals last summer. Critics say an independent commission is needed to watch over the Ministry of Finance. OIL PRICES RISE: Oil prices rose Monday, strengthened by U.N.-Iraqi tensions that intensified speculation of a military move against Saddam Hussein. The August-delivery price of benchmark light sweet oil settled at $21.79 a barrel on the New York Mercantile Exchange, up 21 cents from the Friday close. Refined products traded on the exchange also rose. GOLD HIGHER IN NEW YORK: Gold prices rose $1.60 to $359.10 a troy ounce on the Commodity Exchange in New York Monday. Republic National Bank of New York quoted a later bid of $358.70, up $1.20 from late Friday. Gold fell in London and Zurich. On the New York Commodity Exchange, silver prices fell to $3.963 a troy ounce from $3.971 late Friday. Silver was unchanged in London at $3.97. SPECIAL PACKAGE ON WORLD: CENTRAL BANKS BUY DOLLARS: Analysts say various economic problems are driving investors to sell. Investors are especially worried about the weakening dollar. Last week, it plunged to post-World War II lows against other major currencies. Monday, central banks from industrialized countries actively bought the dollar, which ended sightly up against the Japanese yen and German mark. HOPES NOT FULFILLED: "What had bolstered stock markets was the hope that rates in Europe would actually decline, the U.S. dollar would rise, and economies would turn up," says fund manager Michael Gerding. The exact opposite happened. The German central bank last week raised its discount rate to 8.75% from 8%, putting pressure on other countries' central banks to do the same. EARNINGS MAY PUSH STOCKS LOWER: Analysts say they wouldn't be surprised if stocks continue to fall. In the USA, earnings look disappointing this quarter. Ditto Germany and Japan. Monday, Daiwa Securities fueled the sell-off in Japanese stocks by issuing negative comments about the earnings prospects of technology companies. "Looks like we're in for a rough period for a while," says a fund executive. (End of package.) DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Tuesday at 3303.00 after closing down 28.64 Monday. The New York Stock Exchange composite opens at 227.51, down 1.00. The American Stock Exchange market value opens at 384.52, down 2.03. The NASDAQ OTC composite opens at 564.28, down 6.24. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Tuesday. It opens at 0.5253 British pounds, up from 0.5130; 5.0520 French francs, up from 4.9290; 1.4950 German marks, up from 1.4575; and 125.46 Japanese yen, up from 124.32. (As of 3 p.m. Monday. 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. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM