Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Wed, May 13 1992 Date: Wed, 13 May 92 05:40:09 EDT Message-ID: 05-13 0000 DECISIONLINE: Banking & Economy USA TODAY Update May 13, 1992 Source: USA TODAY:Gannett National Information Network WHOLESALE PRICES BARELY HIGHER: The Labor Department said Tuesday that wholesale prices rose just 0.2% in April. Labor said wholesale inflation remained low last month due to a 0.3% drop in food prices. Wholesale prices - which businesses pay - have risen only 0.9% the past year. Analysts said the report means that inflation is all but dead. FED MAY MOVE ON RATES: Tuesday's report on low wholesale inflation means the Federal Reserve may move to push interest rates down because there's little danger of stronger economic growth pushing inflation higher anytime soon. "I wouldn't be surprised" to see a downward push on rates after Fed policy makers meet Tuesday, says Sung Won Sohn, economist at Norwest in Minneapolis. FUNDS RATE LIKELY TARGET: If the Federal Reserve moves to push interest rates down, experts say, it will likely move to push down the federal funds rate - what banks charge each other for overnight loans - to 3.5% from its current 3.75% target. There's also a chance that the Fed will cut its discount rate - what it charges banks for overnight loans - to 3% from 3.5%. EARNINGS ABOVE PREDICTIONS: Earnings at companies in the Standard & Poor's 500 index came in slightly above what analysts predicted for the first quarter. Analysts saw that as a sign that the economic recovery is under way. Earnings for the S&P 500 companies were an average 4% above analysts' consensus estimates, according to Zacks Investment Research, although expectations for the quarter were not high. DOW DOWN TUESDAY: Stocks fell Tuesday from Monday's record high as investors took profits and mulled inflation news. The Dow Jones industrial average sank 12.46 points to 3385.12. Broader indexes were mixed. Advancers trailed decliners 750 to 980 on the New York Stock exchance, where volume was 193 million shares. INVESTORS AWAIT REPORT: Traders say investors Tuesday were waiting to see if Wednesday's report on consumer inflation last month also will be low enough to give the Fed room to stimulate the economy by increasing the money supply. The Fed can do that by nudging the federal funds rate lower or cutting the discount rate. "They have to loosen up," says Robert Antolini, trader at Donaldson, Lufkin & Jenrette. FED TO HELP WITH RIOT FUNDING: The Federal Reserve said Tuesday it has joined with other federal agencies to speed approval of financial aid to Los Angeles and other riot-affected cities. The agencies say banks and thrifts that help riot-hurt borrowers restructure debts or extend payment terms won't be looked upon critically by bank examiners. LAST MEETING FOR IACOCCA: Lee Iacocca attends Chrysler's annual meeting Wednesday for the last time as the automaker's chairman. He will retire at the end of this year after 12 1:2 years at Chrysler's helm. In January, Robert Eaton, former head of GM's European operations, was chosen to succeed Iacocca. OIL PRICES HEAD LOWER: In crude oil trading Tuesday at the Mercantile Exchange, light sweet blend for June delivery fell 4 cents a barrel to $20.96. Among refined products traded on the exchange, wholesale unleaded gasoline for June delivery declined 0.51 cent a gallon to close at 64.82 cents. Natural gas for June delivery closed at $1.543 per 1,000 cubic feet, up from $1.490 Monday. GOLD, SILVER PRICES DOWN: Gold and Silver prices declined in trading Tuesday. On the New York Commodity Exchange, gold bullion for current delivery settled at $335.30 a troy ounce, off $1.40 from Monday. Republic National Bank said gold fell $1.70 an ounce to a late bid price of $334.60. On New York's Comex, silver bullion for current delivery settled at $4.089 a troy ounce, down from $4.092 on Monday. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Wednesday at 3385.12 after closing down 12.46 points Tuesday. The New York Stock Exchange composite opens at 229.45, down 1.02. The American Stock Exchange market value opens at 393.46, down 2.38. The NASDAQ OTC composite opens at 583.96, down 3.17. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Wednesday. It opens at 0.5515 British pounds, down from 0.5577; 5.4460 French francs, down from 5.5125; 1.6226 German marks, down from 1.6403; and 130.38 Japanese yen, down from 133.04. (As of 3 p.m. Tuesday. 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