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, Apr 20 1992 Date: Mon, 20 Apr 92 05:42:18 EDT Message-ID: 04-20 0000 DECISIONLINE: Banking & Economy USA TODAY Update April 20, 1992 Source: USA TODAY:Gannett National Information Network GREENSPAN SAYS GROWTH TOO WEAK: The economy grew at a 2% annual rate the first quarter, the strongest pace since early 1989, Federal Reserve Chairman Alan Greenspan says. But Greenspan called the growth inadequate, saying it won't bring down the unemployment rate, now 7.3%, fast enough. Economists interpreted Greenspan's remarks as a hint that the Federal Reserve hasn't ruled out another interest-rate cut. HOUSING CONSTRUCTION SOARS: Construction of homes and apartments rose 6.4% last month from February to the highest level in two years, the Commerce Department says. Starts on single-family homes and apartments rose to a seasonally adjusted annual rate of 1.4 million homes last month after jumping 8.7% in February. March's increase came from a big surge in apartment construction, analysts said. DEANS SAY CEO PAY TOO HIGH: A USA TODAY survey of 243 deans and top officials of business schools found that most think the public has a right to be outraged over the level of CEO pay in the USA. According to the study, 82% say outrage is justified, and half say a good guideline would be to limit CEO pay to 20 times the salary of their firm's average worker. In 1990, CEO pay averaged 85 times that of workers. MORTGAGE RATES CONTINUE DOWN: Fixed mortgage rates dropped last week for the fourth week in a row, says the Federal Home Loan Mortgage Corp. Thirty-year fixed-rate mortgages averaged 8.76%, down from 8.84% a week earlier. Rates peaked this year at 9.03% in late March after hitting a 19-year low of 8.23% the week ended Jan. 10. One-year adjustable rates averaged 6.11% last week, down from 6.15% a week earlier. SMALL STOCKS FALLING: Small-company stocks are going downhill. Since setting a record Feb. 12, NASDAQ's over-the-counter composite - a measure of small-company stocks - is down more than 8%. Meanwhile, the Dow Jones industrial average rose 3% to another record. Analysts say stocks of high tech and biotech companies that led the index higher last year are now dragging it down. SMALL STOCKS STILL IN FAVOR: While small-company stocks have been down the past two months, many analysts have not given up on them. "If this is the end of the small-stock boom, it will be one of the shortest in the history of mankind," says Bob Czepiel, manager of the Robertson, Stephens Emerging Growth Fund. Greta Marshall, chief investment officer at the Marshall Plan, agrees that small stocks have not peaked. AUTO REFINANCING GAINS STRENGTH: Several banks - having seen the popularity of home refinancing in recent months - have begun offering refinancing plans for auto loans. Some banks and credit unions are offering rates as low as 7.9% on three-year loans as a way of attracting new customers who bought new cars two years ago at average rates of 12.25%. Among banks offering auto refinancing: NationsBank, First Chicago. CD SAVERS TURN TO FUNDS: Up to $110 billion in certificates of deposit come due this month. April is the second-biggest month for CD rollovers, after October. Analysts expect a significant portion of that money to be invested in mutual funds. Reason: CD yields have been falling fast. The average one-year CD yields 4.14%, down from 6.39% one year ago and 9.51% three years ago. STATE HOPES TO REOPEN BANKS: Pennsylvania says it hopes to reopen under state ownership this week two privately-owned banks it seized Friday. The two banks, Marian Bank in Philadelphia and Tobias Knoblauch Private Bank of Reading, Pa., were not covered by the Federal Deposit Insurance Corp. The state said the banks were unsafe and unsound. Top management was removed. CARDS TO FIGHT FRAUD: In an effort to cut down on credit card fraud, Citibank Monday will begin offering cards with ID photos. The Citibank Photocard is optional for its 30 million Visa and MasterCard holders, says the USA's largest credit card issuer. The problem of credit card fraud is significant, as more than $1 billion was lost last year because of misplaced, stolen and counterfeited credit cards. STUDY FAVORS RETAILERS: The stocks of retailers and clothing makers are among the best performers when interest rates rise, according to a study done for USA TODAY. Mitchell & Co. tracked how 4,000 stocks reacted to moves in short-term interest rates the past 40 years. Half of the study's best picks are retailers and clothing makers - which import much of their goods. Higher rates boost the dollar, making imports cheaper. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Monday at 3366.50, after closing up 12.74 Friday. Markets were closed for Good Friday. The New York Stock Exchange composite opens at 228.90, down 0.25. The American Stock Exchange market value opens at 392.64, down 1.52. The NASDAQ OTC composite opens at 591.81, down 8.22. 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. 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