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 Thu, Mar 12 1992 Date: Thu, 12 Mar 92 05:46:03 EST Message-ID: 03-12 0000 DECISIONLINE: Banking & Economy USA TODAY Update March 12, 1992 Source: USA TODAY:Gannett National Information Network BANK PROFITS RISE: Profits for the USA's banks rose to $3.7 billion in last year's fourth quarter, the Federal Deposit Insurance Corp. said Wednesday. For the fourth quarter of 1990, banks had profits of $907 million. California banks did not share in the wealth, losing $379 million in the fourth quarter and $659 million for all of 1991. Plummeting real estate values were responsible. STOCKS FALL WEDNESDAY: Rising bond yields - which resulted from comments on the economy from President Bush - and slumping foreign markets combined to send stocks lower Wednesday. The Dow Jones industrial average fell 22.36 points to 3208.63. The NASDAQ over-the-counter composite index fell 6.32 points to 617.14. Losers beat winners 1,168 to 516 on the New York Stock Exchange on volume of 186 million shares. COMMENTS SEND MARKETS DOWN: President Bush sent the stock and bond markets into a tailspin Wednesday, saying he was "more concerned about stimulating the economy" than about long-term interest rates. The Dow's loss sent it to its lowest point since Jan. 13 and raised fears that a further decline is coming. "The market will correct 5% to 10%" in the next 30 days, says James McCabe of Nomura Research Institute. BOND YIELDS RISE: Yields on 30-year Treasury bonds rose to 7.95% Wednesday from 7.9% Tuesday after President Bush said he was not concerned about long-term interest rates. Rising long-term rates have frustrated the Federal Reserve's attempt to revive the economy by cutting short-term rates. The Fed had hoped long-term rates would also decline, lowering borrowing costs to companies and consumers. KEY REPORTS DUE: Government reports due out Thursday and Friday should give an indication of the direction of the economy. Reports are due Thursday on retail sales and Friday on the producer price index. Patricia Chadwick, managing director at Chancellor Capital Management, says if the retail number reveals a strong recovery, it would fuel inflation fears. BOSKIN CAUTIOUS ABOUT ECONOMY: President Bush's economic experts are quietly suggesting the recession is ending. "A bunch of indicators suggest we are quite possibly in the early stages of a gradual improvement," Michael Boskin, chairman of the president's Council of Economic Advisers, told a group of reporters over breakfast Wednesday in Washington. "But," he's quick to add, "it's still too early to say." CD YIELDS UP SLIGHTLY: Most bank certificate of deposit yields rose slightly in the week ending Wednesday, `Bank Rate Monitor' says. Average yields: Six-month, 3.89% vs. 3.89%; one-year, 4.13% vs. 4.12%; 2 1:2-year, 4.89% vs. 4.86%; five-year, 6% vs. 5.95%. SEC PROPOSES REFORMS: The Securities and Exchange Commission Wednesday formally proposed reforms to make it easier for small businesses to raise money through the stock market. The changes, which the SEC opened to public comment, include: Raising the limit small companies can own in mutual funds to 15% from 10% and simplifying forms small companies use to buy securities. JAPAN SURPLUS RISES: Japan's trade surplus rose to a record $10.2 billion in February. Last month's surplus was double that of February 1991, Japan's Finance Ministry said Wednesday. The previous record: $10 billion, in December. The surplus with the USA rose 29% to $4 billion last month. Auto exports to the USA rose 5% from a year earlier to $2 billion. OIL PRICES DOWN: Oil prices fell Wednesday in slow trading. Light sweet crude oil for delivery in April settled at $18.50 per barrel, down 19 cents, at the New York Mercantile Exchange. Lower-grade sour crude for delivery in May settled at $15.75 per barrel, down 23 cents. Home heating oil for delivery in April settled at 51.30 cents a gallon, down .53 cent. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Thursday at 3208.63, after closing down 22.36 Wednesday. The New York Stock Exchange composite opens at 223.55, down 1.47. The American Stock Exchange market value opens at 405.85, down 2.69. The NASDAQ OTC composite opens at 617.14, down 6.32. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mixed on foreign markets Thursday. It opens at 0.5809 British pounds, down from 0.5830; 5.6740 French francs, up from 5.6470; 133.78 Japanese yen, up from 132.92; and 1.6662 German marks, down from 1.6725. (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: 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