Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.banks,americast.usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Thu, Oct 1 1992 Date: Thu, 1 Oct 92 04:57:26 EDT Message-ID: 10-01 0000 DECISIONLINE: Banking & Economy USA TODAY Update Oct. 1, 1992 Source: USA TODAY:Gannett National Information Network NEW HOME SALES STILL SLIDING: Low interest rates didn't help the new home market in August - another sign of a struggling economy. New home sales tumbled 6.1% from July to August, to a seasonally adjusted annual rate of 570,000, the Commerce Department said Wednesday. That's a three-month low and 97,000 houses below the annual rate in January, when the economy appeared to be picking up steam. SOME EXPERTS ARE HOPEFUL: Despite the grim figures on home sales out Wednesday, some experts take hope. New home sales may have slipped in August, but they still are up 9% over the same month last year. Also: July's annual sales rate was revised up 8%, to an annual rate of 607,000 from a first estimate of 563,000. And June new home sales were revised up 3,000 to 581,000. CYCLICAL STOCKS ARE SHAKY: Economic optimists lost big in the stock market the past three months. Economically sensitive companies - especially makers of autos, metals and machine tools - were among the worst performing stock groups in the third quarter. What's happening: The anticipated recovery isn't here. Expectations of improved earnings aren't panning out and cyclical stocks have floundered. BUSINESS OUTLOOK DIM: Business executives have lower expectations for sales and profits the final three months of 1992 than they did for the third quarter, according to a Dun & Bradstreet survey of 2,000 executives questioned Aug. 10-26. Still, 63% of executives expect an increase in sales and 55% expect an increase in profits vs. the fourth quarter last year. Only 23% expect to be able to raise prices. OCTOBER UGLY FOR STOCK MARKET: October holds ugly memories for the stock market. The worst crash in history came Oct. 19, 1987, when the Dow Jones industrial average plummeted 508 points, or 23%. Oct. 13, 1989, the Dow fell 190 points, or 7%. The Dow fell 12% the last three weeks of October 1978. It lost 9% the last three weeks of October 1979. And - kicking off the 1930s Depression was a 12% Dow drop Oct. 29, 1929. CITICORP LOWERS SOME RATES: Citicorp is lowering rates on credit cards for its premier members, about half of its 22 million card holders. Rates on the Classic card drop to 15.4% from 15.9% while Preferred card rates fall to 13.4% from 13.9%. The lower rates apply only to new card charges. BANK CD YIELDS FALL: Yields on bank certificates of deposits dropped again this week, continuing their year-long slide, Bank Rate Monitor says. Average yield: six-month, 3.07% vs. 3.10%; 1-year, 3.31% vs. 3.33%; 2 1:2-year, 4.01% vs. 4.04%; 5-year, 5.30% vs. 5.31%. PENSION LAWS TO CHANGE: Lump-sum pension payment laws change at the beginning of the year. Workers who change or lose jobs, or retire and receive pension plan lump sums, have to have the money transferred directly to another company plan or an individual retirement account, investment expert Jim Lawless says. If they don't, the money will be subject to a 10% withholding tax. LAW TO HELP COMPANIES: California Gov. Pete Wilson's office said Wednesday that a new California law will make it easier for small companies to raise money from the public. The legislation sets up a streamlined review and approval process for businesses to sell up to $1 million of common stock over a 12-month period. The law goes into effect Jan. 1 and does not apply to oil and gas exploration. T-BOND YIELDS FALL: The yield on 30-year Treasury bonds climbed to 7.38% from 7.36% Wednesday. The discount rate on three-month Treasury bills dropped to 2.68% from 2.73%. Light sweet crude oil rose 4 cents to $21.71 a barrel on the N.Y. Mercantile Exchange. GOLD, SILVER DROP: Prices for precious metals dropped Wednesday. On the Commodity Exchange, gold for current delivery fell 40 cents to $347.80. Republic National Bank said gold ended at $348.30, down 20 cents. Gold rose in London to $348.75 from $347.45. Silver bullion fell in London to $3.76 from $3.73. On the Comex, silver was quoted at $3.739, down from $3.762. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3271.66 Thursday after closing up 4.86 Wednesday. The New York Stock Exchange composite opens at 229.46, up 0.56. The American Stock Exchange market value opens at 375.72, up 1.11. The NASDAQ OTC composite opens at 583.27, up 5.64. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mostly up on Thursday. It opens at 0.5642 British pounds, up from 0.5621; 4.7970 French francs, down from 4.8200; 1.4180 German marks, down from 1.4125; and 120.00 Japanese yen, down from 119.37. (As of 3 p.m. Wednesday. 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 downdate (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