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 Wed, Aug 5 1992 Date: Wed, 5 Aug 92 04:32:44 EDT Message-ID: 08-05 0000 DECISIONLINE: Banking & Economy USA TODAY Update Aug. 5, 1992 Source: USA TODAY:Gannett National Information Network LEADING INDICATORS DROP: The government's index of leading indicators fell 0.2% in June. The Commerce Department said Tuesday that the index, which is supposed to forecast the economy's performance six to nine months ahead, fell from May mostly because: The nation's money supply shrank 0.6%; the average workweek fell from 41.3 hours in May to 41.1 hours in June; and stock prices fell 1.6%. COINCIDENT INDICATORS DROP: A gauge designed to show the economy's current state - the index of coincident indicators - fell 0.6% in June. That index is now almost two percentage points below its low in spring 1991, when economists say the recession ended. The drop is a sign that the economy is in a third dip, economists say. The first dip was the recession, the second was the stall in last year's second half. S&L CLEANUP COSTS LOWERED: The Congressional Budget Office cut its estimate of the cost of cleaning up failed banks and savings and loans. The S&L bailout will cost $195 billion plus interest, down from an earlier estimate of $215 billion. The CBO also cut its forecast of the cost to the Federal Deposit Insurance Corp. of closing banks from 1992 to 1996 to $39 billion from $43 billion. CHASE GETS LOWER: Chase Manhattan Bank on Tuesday became the latest large credit-card issuer to offer lower interest rates to good customers. Chase, the USA's No. 2 card issuer, says it will offer variable annual rates, now: 16.4% on Chase Classic Visa and MasterCards, vs. a fixed rate of 19.8%. Those who carry balances of more than $2,500 will get a 14.4% rate. AUTO SALES TAKE A DIVE: Auto sales slumped in late July, dragging totals for the full month 3.1% below the tally a year earlier. The July numbers also were down from a fairly healthy June, when rental-car companies fattened their fleets to accommodate a crush of travelers taking advantage of ultralow airfares. SEMICONDUCTORS STALL: The USA said Tuesday Japan isn't keeping its pledge to buy more foreign semiconductors and hinted that if progress isn't made, trade sanctions could be imposed. Japan agreed last August to increase purchases of foreign computer chips to 20% of its market by the end of this year. But Japan's chip market has remained flat at 14.6% since last year's third quarter. JAPAN TO BOOST IMPORTS: Japan's Ministry of International Trade and Imports says it plans to spend $1 billion through next year to boost imports. The initiative includes increasing government purchases of foreign goods and starting free-trade zones, where goods can be imported without paying customs duties. Japan has been under pressure from its trading partners to reduce its burgeoning trade surplus. PHAR-MOR IN HOT WATER: The FBI said Tuesday it is investigating alleged fraud and embezzlement at discount drugstore chain Phar-Mor, and the Ohio-based company says its former president, Michael Monus, and chief financial officer, Patrick Finn, are the chief suspects. Phar-Mor fired the two last week after questions arose about the company's finances. OIL PRICES FALL SLIGHTLY: Oil prices fell Tuesday. Light sweet crude oil for September delivery fell 23 cents to $21.35 a barrel; September heating oil fell .73 cent to 59.07 cents a gallon; September unleaded gasoline slipped .20 cent to 59.68 cents a gallon; September natural gas rose 0.4 cent to $1.861 per 1,000 cubic feet. GOLD BARELY MOVES, SILVER FALLS: Precious metals had a slow day. Gold on the Commodity Exchange rose 10 cents to $352.70. Republic National Bank said gold, at $353.00, was unchanged. Gold fell in London to $352.85 from $354.10. In Zurich, the metal fell to $352.15 from $353.90, and in Hong Kong, gold dropped $4.69 to $352.58. On the Comex, silver fell to $3.870, down from $3.875. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Wednesday at 3395.94 after closing down 11.08 points Tuesday. The New York Stock Exchange composite opens at 233.39, down 0.27. The American Stock Exchange market value opens at 391.82, up .95. The NASDAQ OTC composite opens at 581.32, up 1.04. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mixed on Wednesday. It opens at 0.5207 British pounds, up from 0.5200; 4.9830 French francs, down from 4.9850; 1.4757 German marks, down from 1.4763; and 127.21 Japanese yen, up from 127.20. (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: Michele Coleman. (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