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, Aug 7 1992 Date: Fri, 7 Aug 92 04:31:46 EDT Message-ID: 08-07 0000 DECISIONLINE: Banking & Economy USA TODAY Update Aug. 7-9, 1992 Source: USA TODAY:Gannett National Information Network BANK REFORM BILL APPROVED: The House Banking Committee Thursday approved a bill to reform the $2.3 trillion government securities market, a response to abuses that surfaced as a result of the Salomon Brothers trading scandal. The committee added an amendment to preserve bank regulators' authority over some aspects of the market, key to helping the government finance operations and the national debt. MARKET COULD DROP 10%: According to brokerage research director Joseph Battipaglia of Gruntal & Co., the market will drop 10% before year's end. Big reason: Lack of second-half economic zip. "Profits are coming through uneven, and the second half is in doubt," he says. "Whether you look at (factory output), the latest from purchasing managers or employment trends, demand isn't there." INTEREST RATES TO INCH UP: Interest rates will inch up before the end of the year because of a tremendous supply of Treasury offerings and higher overseas rates, according to brokerage research director Joseph Battipaglia. His strategy for smart market moves is to be ultraselective. His top stock pick: Gillette. He likes its Sensor system, because its sales have been growing 16% a quarter since its 1990 debut. TRADE AGREEMENT COULD BE NEAR: A tentative agreement on breaking down trade barriers in North America could be announced as early as this weekend, though negotiators say there are several sticking points that could prolong the talks. The proposed North American Free Trade Agreement would expand an existing free trade agreement between Canada and the USA to include Mexico. MORTGAGE APPLICATIONS SLOW: Applications for mortgages slowed 3.1% the week ended July 31, the Mortgage Bankers Association says. But the volume of applications is still 150% higher than a year earlier because of falling interest rates. Refinancings accounted for nearly 58% of all applications. COMPLAINT FILED AGAINST LENDERS: Bank of Scotland and Pilgrim Prime Rate Trust Thursday filed a complaint against six Amdura Corp. bank lenders in the Chancery court of Cook County, Ill., according to Bloomberg Business News. The complaint alleges that Continental Bank, acting as an agent for a group of lenders, wrongfully diverted about $3.84 million. Continental says the money is interest owed to the group. GM EARNINGS BELOW EXPECTATIONS: GM Thursday reported operating income of $392 million, or 31 cents a share, in the second quarter, its best quarterly showing in two years. The results fell short of analysts' forecasts of 40 cents to 55 cents a share. Chairman Robert Stempel warned that the second half of the year could be difficult for GM because of the weak economic recovery and a slowdown in European markets. PREPARE FOR FARE WAR: Salomon Brothers airline analyst Julius Maldutis says that the airlines will face "the mother of all fare wars" later this year. The half-price fare war from late May to early June diverted would-be fourth-quarter passengers to the third quarter, he says. That made management realize that advance bookings for the fourth quarter were "terribly weak. They panicked," he says. ILL. POWER BUY TIP REPEATED: Kidder, Peabody & Co. analyst Douglas Preiser Thursday reiterated his buy recommendation on Illinois Power, which Preiser called "a table-pounding buy." Illinois Power Wednesday said it would have to write off $202 million if the Illinois Commerce Commission bars the utility from recovering nuclear plant costs. Four other companies have lowered their ratings of the utility. SELLERS DON'T WANT TO GIVE UP: Many home sellers are being plagued by a single question: Whether to accept a low offer in case things get worse, or await a recovery. Sellers traditionally are reluctant to concede the tide has turned against them. That's especially true in California, where prices soared in the 1980s. The result: slumping sales - down 19%, compared with 1989 sales, in California. DOW, GOLD, OIL FALL: The Dow Jones industrial average lost 24.58 points to 3340.56 Thursday. The NASDAQ composite index fell 2.85 points to 574.02. Yields on 30-year Treasury bonds rose to 7.44% from 7.42%. The discount rate on three-month Treasury bills dipped to 3.15% from 3.16%. Comex gold fell 20 cents to $349 an ounce. Light sweet crude oil climbed 24 cents to $21.42 a barrel on the N.Y. Merc. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Friday at 3340.56 after closing down 24.58 points Thursday. The New York Stock Exchange composite opens at 231.50, down 0.79. The American Stock Exchange market value opens at 389.77, down 1.13. The NASDAQ OTC composite opens at 574.02, down 2.85. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mixed on Friday. It opens at 0.5223 British pounds, down from 0.5227; 4.9895 French francs, down from 4.9905; 1.4775 German marks, up from 1.4772; and 127.55 Japanese yen, up from 127.36. (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: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes violates federal law. 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