Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Mon, Mar 2 1992 Date: Mon, 2 Mar 92 05:57:42 EST Message-ID: 03-02 0000 DECISIONLINE: Banking & Economy USA TODAY Update March 2, 1992 Source: USA TODAY:Gannett National Information Network GDP REVISED HIGHER: The economy grew at an annual rate of 0.8% last quarter, slightly stronger than the 0.3% rate first estimated, the Commerce Department says. Gross domestic product has risen for the past three quarters since last spring at annual rates of 1.4%, 1.8% and 0.8%. Analysts say the pace of growth is less than one-third of typical growth for an economy coming out of a recession. SENSITIVE STOCKS RISE: Stocks of economically sensitive companies did well in February. Stock groups that should do well as consumers spend more - automakers, entertainment, department stores and household furnishings and appliances - were winners. Also rising were groups that should benefit from any rise in industrial activity, including electronic instruments and miscellaneous metals. STRENGTH MUST BE PROVEN: Smith Barney strategist Marshall Acuff is cautious about the outlook for economically sensitive stocks, despite their popularity in January and February. "There's still an element of `show me' out there," he says. The companies must produce better earnings to validate expectations, he says. If they don't produce, investors will turn back to the proven earnings of growth stocks. EMPLOYMENT PICTURE BRIGHTER: Temporary-help firm Manpower reports Monday that this spring's employment outlook is somewhat brighter than last spring's. Manpower's survey of 15,000 employers found that 21% of the companies surveyed last month plan to increase their workforces next quarter (vs. 18% last February), and 10% plan layoffs (vs. 13% last February). The remaining 69% plan no change - about normal. MORTGAGE PAYMENTS INCREASED: More homeowners are adding money to their regular mortgage payments, attempting to build home equity and save interest expenses by paying off loans faster. Countrywide Credit Industries says about 14% of the loans it services include additional principal payment each month - up from about 10% two years ago. At Bank One Mortgage, about 7.4% of customers are adding money. RATES CONTINUE HIGHER: Fixed mortgage rates rose to their highest level in four months last week, according to the Federal Home Loan Mortgage Corp. The average rate on 30-year mortgages was 8.83% last week, up from 8.82% a week earlier. One-year adjustable-rate mortgages averaged 5.93%, vs. 5.92%. MERGERS THREATEN LOANS: The current wave of bank mergers threatens to take money from local communities, denying them money for loans that could create jobs and boost businesses, says Rep. Henry Gonzalez, D-Texas, chairman of the House Banking Committee. A report by the committee found that 40% of the 15 largest banks with major operations in several states drained money from communities. MILKEN TALKS TO FORBES: Jailed financier Michael Milken, who is serving a 10-year sentence for securities fraud, says in a Forbes interview out Monday he tried to warn companies in the late 1980s to de-leverage - sell stock to pay debt. Milken told the magazine that the collapse of the junk bond market in 1989 and 1990 was not his fault. "Junk bonds were around before I was born," Milken says. LOAN DELINQUENCIES DOWN: Consumer loan delinquencies fell last quarter or the first time in almost two years. The delinquency rate on consumer installment loans - including personal, auto and home-equity loans overdue at least 30 days - fell to 2.58% of all loans Dec. 31 from 2.74% Sept. 30, according to an American Bankers Association survey of 800 banks. The rate is still high. It was 2.57% at the end of 1990. MERGER WILL NOT BE CHALLENGED: The Justice Department said Friday it will not challenge the proposed bank merger of Security Pacific and BankAmerica, as long as BankAmerica sells 211 branches in five states as planned. The merger would create the USA's largest bank and has raised antitrust concerns. OIL, GASOLINE PRICES DOWN: Energy futures drifted lower in lackluster trading on the New York Mercantile Exchange Friday. Crude oil prices were pulled lower by the weakness in gasoline. Light sweet crude oil for delivery in April was 7 cents lower at $18.68 a barrel. March unleaded gasoline was .78 cent lower at 55.50 cents a gallon. April natural gas was 1.5 cent higher at $1.171 per thousand cubic feet. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Monday at 3267.67, after closing down 1.78 Friday. The New York Stock Exchange composite opens at 228.21, down 0.54. The American Stock Exchange market value opens at 416.09, unchanged. The NASDAQ OTC composite opens at 633.47, down 0.48. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: Jason P. Smith. (919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution 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