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 Wed, Oct 21 1992 Date: Wed, 21 Oct 92 04:30:09 EDT Message-ID: 10-21 0000 DECISIONLINE: Banking & Economy USA TODAY Update Oct. 21, 1992 Source: USA TODAY:Gannett National Information Network CLINTON STIRS UP BOND MARKET: Bill Clinton is haunting the bond market. And that has interest rates across the board shooting up. As the Democrat's bid for the presidency strengthens, bond investors are selling. Tuesday, they pushed yields on the bellwether 30-year Treasury bond to 7.64% from 7.57% Monday. "It's a Clinton market," said David Jones, economist at bond brokerage Aubrey Lanston. INVESTORS EXPECT CLINTON TO WIN: Bond investors are basically trading as if Democratic presidential candidate Bill Clinton has already won the White House and put into effect measures to boost the economy. Most expect he'll try to spend more money to upgrade roads and bridges among other things. If Clinton's plan adds to the deficit, the government will have to sell more Treasury bonds. That's pushing up rates. WELLS FARGO REPORTS DROP: Several of the nation's largest banks reported higher third-quarter earnings Tuesday. But San Francisco-based Wells Fargo, which has been hurt by California's weak economy, reported a drop. Bank earnings generally have improved the past year as interest rates have fallen. Banks have cut the rates they pay depositors more quickly than they've cut the rates they charge borrowers. CITICORP EARNINGS ARE UP: Citicorp, the USA's largest bank, Tuesday reported slightly better-than-expected earnings for the period ended Sept. 30, thanks to profits from foreign-currency trading and the lower cost of funds. Citicorp earned $116 million, or 17 cents a share, vs. a loss of $885 million, or $2.72 a share, a year ago. Citicorp benefited from $364 million in foreign-exchange revenue. EXPECT LESS THIS DECADE: Expect less from stock and bond funds in the 1990s, according to top mutual fund companies. American Funds group, which offers four of the 10 top stock funds, sent a recent warning to investors in its Income Fund of America annual report. Other sponsors of big stock funds say the same. Don't expect funds to "sustain unusually high returns," says Edward Johnson III of Fidelity Investments. HOUSING STARTS RISE AGAIN: Housing starts rose last month after soaring in August, the government said Tuesday, the best report in six months. Other good news: Compaq had a record third quarter; Apple and IBM posted big gains as the industry headed toward a record year. Demand for semiconductors, the tiny computer chips that run PCs and many other electronic products, is way up. BANK FRAUD PROBE DROPPED: The U.K. Serious Fraud Office Tuesday dropped its investigation into allegations of corruption by Bank of England officials over the collapse last year of the Bank of Credit and Commerce International. The five-month joint inquiry with the City of London police "revealed no evidence" that central bank officials did anything wrong, according to a statement. LITTLE COLLECTED IN BANK FRAUD: The federal government has collected just 4.5% of the fines and restitutions ordered in cases of major bank and thrift fraud, the General Accounting Office said Tuesday. The Department of Justice has said that in most cases there is little or nothing to collect when sentencing occurs. The nation's courts ordered $846.7 million of fines and restitutions from October 1988 to July. PAIR GUILTY OF INSIDER TRADING: Christopher Garvey and Darrin Gleeman, both 26, Tuesday pleaded guilty to federal charges of insider trading using information from the law firm of Skadden, Arps, Slate, Meagher & Flom where Garvey had worked as a paralegal. Both pleaded guilty of conspiracy to commit securities fraud. Gleeman and his father allegedly set up offshore accounts to trade based on information from Garvey. LONG-TERM BOND YIELDS UP: The yield on 30-year Treasury bonds soared to a three-month high of 7.64% from 7.57% Tuesday. The discount rate on three-month Treasury bills jumped to 3.03% from 2.94% at Monday's auction. Light sweet crude oil fell 28 cents to $21.86 a barrel on the New York Mercantile Exchange. GOLD, SILVER UP: On the New York Commodity Exchange, gold bullion for current delivery settled at $343.80 a troy ounce Tuesday, up $1.10 from Monday. On New York's Comex, silver bullion for current delivery settled at $3.778 a troy ounce, up from $3.718 on Monday. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3186.02 Wednesday after closing down 2.43 Tuesday. The New York Stock Exchange composite opens at 228.58, up 0.34. The American Stock Exchange market value opens at 371.40, up 2.86. The NASDAQ OTC composite opens at 592.70, up 2.03. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Wednesday. It opens at 0.6160 British pounds, up from 0.6119; 5.1445 French francs, up from 5.0480; 1.5190 German marks, up from 1.4885; and 122.35 Japanese yen, up from 119.98. (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: Beth Mann. (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