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 Tue, Jun 2 1992 Date: Tue, 2 Jun 92 05:20:35 EDT Message-ID: 06-02 0000 DECISIONLINE: Banking & Economy USA TODAY Update June 2, 1992 Source: USA TODAY:Gannett National Information Network NAPM INDEX JUMPS: Manufacturing activity surged last month. The National Association of Purchasing Management said Monday that its business index rose to 56.3% in May - its highest mark since July 1988 - from 51.3% in April. The index is based on a monthly survey of purchasing executives at 300 industrial companies. A reading above 50% signals manufacturing activity is increasing. INCOME, SPENDING BARELY HIGHER: The Commerce Department reported Monday that personal income - from wages, salaries, and investments - rose just 0.1% in April from March, to a $5 trillion annual rate, a third monthly increase. That weak gain helps explain why consumer spending rose just 0.3% in April, to a $4 trillion annual rate. Consumer spending was flat in March and rose 0.8% in February. CONSTRUCTION SPENDING OFF: Construction spending fell 0.3% in April after three months of gains, the Commerce Department reported Monday. Declines in commercial and government construction more than offset a jump in residential housing. Overall spending on construction projects totaled a seasonally adjusted annual rate of $418.8 billion in April, compared to a March figure of $420 billion. SMALL BANK CUTS PRIME: The National Bank of Royal Oak in Michigan is cutting its prime lending rate to 6% from 6.5% Tuesday. The prime at most major banks has been 6.5% since December, although Chemical Bank in New York, the nation's second-largest bank, cut its rate to 6.25% in April. The Royal Oak bank, with assets of $182 million, says this is the fifth time it has cut its prime below the prevailing rate. DOW CLOSES ABOVE 3400: The Dow Jones industrial average rallied to a record Monday, cracking finishing above the 3400 mark for the first time. After shaking off an early slump, the Dow gained 16.33 points to 3413.21. Most other indexes also gained. Rising stocks outpaced losers 950 to 775 on the New York Stock Exchange, where volume was 191 million shares. MEANING OF MARK UNCERTAIN: Wall Street jumped another hurdle Monday, as the Dow finished above 3400 for the first time. Optimistic stock analysts say the record supports their outlook for higher stock prices. "This is just part of the bull market's evolution," says Richard Hoffman, chief investment strategist at Cowen & Co. But others say the mark is deceiving because the broader market has not done as well. BRADY WARNS ABOUT DEFICIT: Treasury Secretary Nicholas Brady warned Monday that the budget deficit is a threat to the USA's future. "Our continued large federal deficit ... poses a threat to our future prosperity, and we must bring it under control," Brady said after talking to bankers at an International Monetary Conference. Brady also said the sluggish Japanese economy is an immediate concern. TRADE DEFICIT NARROWS: The merchandise trade deficit, calculated on a balance of payments basis, narrowed to $17.5 billion last quarter, the second best showing in nine years, the Commerce Department says. The gap between exports and imports fell 5.8% from the fourth quarter's deficit of $18.5 billion. The improvement came from a 15% decline in oil imports, reflecting a big drop in foreign oil prices. DISCOUNT RATE STEADY: The Treasury Department Monday sold $11.7 billion in three-month bills at an average discount rate of 3.75%, the same as last week. Another $11.7 billion was sold in six-month bills at an average discount rate of 3.90%, also the same as last week. OIL PRICES DOWN: Oil prices were down Monday on the New York Mercantile Exchange. Light, sweet crude oil for delivery in July settled 8 cents lower at $22.03 a barrel; July heating oil was .06 cent lower at 60.25 cents a gallon; July unleaded gasoline was .61 cent lower at 65.92 cents a gallon; and July natural gas was 3.5 cents higher at $1.660 per 1,000 cubic feet. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Tuesday at 3413.21, after closing up 16.33 Monday. The New York Stock Exchange composite opens at 229.90, up 1.03. The American Stock Exchange market value opens at 394.84, up 0.15. The NASDAQ OTC composite opens at 588.37, up 3.06. DOLLAR OPENS MOSTLY UP OVERSEAS: The dollar opens mixed on foreign markets Tuesday. It opens at 0.5490 British pounds, up from 0.5473; 5.4140 French francs, up from 5.3970; 127.41 Japanese yen, down from 127.70l; and 1.6119 German marks, up from 1.6077. (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