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 29 1992 Date: Thu, 29 Oct 92 04:43:05 EST Message-ID: 10-29 0000 DECISIONLINE: Banking & Economy USA TODAY Update Oct. 29, 1992 Source: USA TODAY:Gannett National Information Network FEDERAL DEFICIT BREAKS RECORD: The gap between federal spending and revenues reached $290.2 billion in the year ended Sept. 30, breaking the record, the government said Wednesday. The deficit surpassed by 7.7% the previous record of $269.5 billion, reached in fiscal 1991. It was the 23rd consecutive year the government failed to balance its budget and brought the accumulated national debt to $3.97 trillion. BANK CD YIELDS KEEP RISING: Yields on some bank certificates of deposit on Wednesday had their biggest weekly rise in 3 1:2 years. Average yields on five-year CDs edged up just 0.05 percentage points to 5.3% the week ended Wednesday, vs. 5.25% the previous week, according to Bank Rate Monitor. Yields on 2 1:2-year CDs rose to 3.97% from 3.92%, and yields on one-year CDs lifted slightly to 3.25% from 3.23%. CLINTON IS REASON FOR INCREASE: Bank CD yields are on the rise after they had been falling since March 1989. The reason: "It's spelled C-L-I-N-T-O-N," says Robert Heady, Bank Rate Monitor. "Analysts think he'll spend a bundle." But yields may not rise for long. Rates are still diving "because of the sick economy," Heady says. Meanwhile, though, the average on five-year CDs shot up to 5.36% from 5.18%. INVESTORS ABANDON BIG STALWARTS: Wall Street, that ever-fickle judge of corporate beauty, has decided once again that small is beautiful. Investors are abandoning such stalwarts as Philip Morris, IBM and Boeing on worries about their earnings outlook. Since June 1, the Dow Jones industrial average has retreated 4.7%, erasing most of the gains of the first five months of the year. SMALLER COMPANIES ARE FAVORED: Abandoning sizeable old-timers such as IBM and Boeing, investors are flocking to computer and biotechnology companies that have market value (stock price times number of shares) of $100 million or less. Many of those small-company stocks are traded on the NASDAQ market. Since Sept. 1, the NASDAQ composite index has climbed 6.3%, while the Dow has been almost flat. DURABLE GOODS ORDERS FALL: Orders to U.S. factories for durable goods such as cars and computers fell in September for the third consecutive month, the government said Wednesday in a report taken as an ill omen for manufacturing employment. The Commerce Department said orders fell a seasonally adjusted 0.4% to $118.9 billion last month. It was the first three-straight-month drop since January-March 1991. INCOME, SPENDING BOTH RISE: Americans' income jumped 0.7% to a seasonally adjusted annual rate of $5.08 trillion in September, the biggest rise since December, the Commerce Department reported Wednesday. Consumer spending also rose 0.7% to $4.12 trillion, the largest increase since January. Both gains, which were somewhat stronger than expected, followed drops of 0.2% in August. EX-COMMODITY DIRECTOR SENTENCED: The former director of the Commodity Futures Trading Commission was sentenced Wednesday to 57 months in prison for his role in a 1990 conspiracy to defraud two banks. Anthony McDonald, director during the Ford Administration, and an associate helped launder $1.1 million in fraudulent checks drawn from the Bank of New York and Security Pacific Bank, according to court documents. LONG-TERM YIELDS ARE STEADY: The yield on 30-year Treasury bonds held at 7.61% Wednesday. The discount rate on three-month Treasury bills fell to 2.93% from 2.94%. Comex gold rose $2 to $339.40 an ounce. Light sweet crude oil rose 10 cents to $21.12 a barrel on the N.Y. Merc. GOLD UP, SILVER UP: Gold prices settled mostly higher. On the New York Commodity Exchange, gold bullion settled at $339.40 a troy ounce, up $2 from Tuesday. Republic National Bank quoted $338.85, up $1.60. Gold rose in London to $338.55 a troy ounce from $338.15. On New York's Comex, silver bullion settled at $3.757 a troy ounce, up from $3.739 Tuesday. In London the metal rose to $3.77 from $3.76. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens at 3251.40 Thursday after closing up 15.67 Wednesday. The New York Stock Exchange composite opens at 230.91, up 0.90. The American Stock Exchange market value opens at 379.00, up 2.35. The NASDAQ OTC composite opens at 601.39, up 4.44. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Thursday. It opens at 0.6371 British pounds, up from 0.6319; 5.2430 French francs, up from 5.2015; 1.5445 German marks, up from 1.5325; and 122.70 Japanese yen, up from 122.33. (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 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