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 Tue, Mar 17 1992 Date: Tue, 17 Mar 92 05:44:53 EST Message-ID: 03-17 0000 DECISIONLINE: Banking & Economy USA TODAY Update March 17, 1992 Source: USA TODAY:Gannett National Information Network DOW GAINS SLIGHTLY: Stocks squeezed out a small gain Monday amid caution over falling stocks in Japan. In the lightest trading day of the year, the Dow Jones industrial average rose 0.45 points to 3236.36. Other indexes finished mixed. Decliners beat advancers 922 to 782 on the New York Stock Exchange, where volume was 156 million shares. FIRMS SAY CUT STOCK HOLDINGS: Two securities firms Monday advised clients to reduce their stock holdings. Dean Witter cut its stock allocation to 55% from 60% and raised cash to 10% from 5%, saying rising rates made interest-bearing investments more attractive. C.J. Lawrence lowered its stock allocation to 40% from 50% and raised cash to 20% from 10%, also citing higher rates and general economic uncertainty. NIKKEI CONTINUES TO FALL: Stocks continued to fall on the Japanese market Tuesday after a major plunge Monday. Monday, the Tokyo stock exchange's version of the Dow, the Nikkei average, plunged 618.90 points (3%) to 19,837.16 - its first close below 20,000 since 1987. At the midday break Tuesday, the Nikkei was down 129.37 points. Analysts fear it could fall to as low as 15,000 before long. DROP COULD HURT U.S. MARKET: A rapid drop by stocks in Japan could hurt the U.S. market. Analysts say if the Nikkei average, which fell below 20,000 Monday and continued down Tuesday, gets to 15,000 quickly, it could push Japanese investors to raise cash by selling U.S. investments such as Treasury securities. That could push interest rates higher, which would hurt U.S. stocks. RATES LIKELY TO STAY NEAR 9%: Many economists and lenders say that mortgage rates will not be likely to return to low levels found in January for the rest of the year. Fixed-rate mortgages were going for about 8 1:4% at many lenders two months ago, but have since risen - following bond yields higher - to 9%. Monday, the 30-year Treasury bond yield rose to 8.07%, from 8.06% Friday and 7.87% a week ago. NAM SURVEY SHOWS OPTIMISM: A survey released Monday by the National Association of Manufacturers, which represents 12,500 small manufacturers, found renewed optimism about the economy. Its survey of small manufacturers found: Nearly 30% expect to hire more people in 1992; 53% say they expect no layoffs; more than 67% will give raises ranging from 5% to 10%; and 45% say they will be more profitable. DISCOUNT RATE RISES: The Treasury Department Monday sold $11.4 billion in three-month bills at an average discount rate of 4.09%, up from 4.02% last week. Another $11.4 billion was sold in six-month bills at an average discount rate of 4.27%, up from 4.13% last week. EATON TO TAKE OVER FOR IACCOCA: As expected, Chrysler Monday announced that Robert Eaton - former head of European Operations for General Motors - will take over for outgoing chairman Lee Iacocca. Eaton began work at 8 a.m. Monday as Chrysler vice chairman and chief operating officer. He becomes chairman and CEO when Iacocca retires Dec. 31. Passed over was Chrysler President Robert Lutz. ARTHUR ANDERSEN SETTLES: Arthur Andersen & Co. has settled civil fraud charges for $30 million, Reuters says. Arthur Andersen was accused of helping Charles Keating, Jr. in a bond-sales scam. A $1.2 billion class action suit against Keating, Arthur Andersen and law firm Deloitte & Touche, among others, claims salespeople at Lincoln Savings and Loan tricked investors into buying uninsured junk bonds. OIL PRICES MIXED: Energy prices ended mixed Monday on a report in an industry newsletter that said Saudi Arabia had cut back output. April crude eased 3 cents to $19.15 a barrel after rising to a high of $19.24 earlier in the day at the New York Mercantile Exchange. April heating oil gained 0.29 of a cent to 53.65 cents a gallon. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Tuesday at 3236.36, after closing up 0.45 Monday. The New York Stock Exchange composite opens at 224.44, up 0.14. The American Stock Exchange market value opens at 402.88, down 1.18. The NASDAQ OTC composite opens at 617.94, down 0.68. DOLLAR OPENS MOSTLY DOWN: The dollar opens mixed on foreign markets Tuesday. It opens at 0.5807 British pounds, down from 0.5855; 5.6610 French francs, down from 5.6685; 133.84 Japanese yen, up from 133.57; and 1.6617 German marks, down from 1.6670. (As of 3 p.m. Monday. 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