Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Wed, Jul 1 1992 Date: Wed, 1 Jul 92 05:20:57 EDT Message-ID: 07-01 0000 DECISIONLINE: Personal Investing USA TODAY Update July 1, 1992 Source: USA TODAY:Gannett National Information Network FEW DO WELL IN SECOND QUARTER: Only a handful of stocks were impressive performers last quarter. That may keep investors leery of the stock market. Among the best performers in the second quarter, ended Tuesday, were carmakers, metal manufacturers and energy-related stocks. Those cyclical stocks react most to changes in the economic cycle. Not as strong: Cyclicals such as retailers and newspaper publishers. MARKET WAITING FOR FED MOVE: Stocks went nowhere Tuesday as investors waited to see whether the Federal Reserve will cut interest rates. The Dow Jones industrial average slipped 1.34 points to 3318.52. Broader indexes finished mixed. Winners outnumbered losers 1,004 to 727 on the New York Stock Exchange. The Fed's policy-setting Federal Open Market Committee met Tuesday and meets again on Wednesday. ELECTION COULD MOVE MARKET: The race for the White House could have as big an impact on the stock market in the third quarter as the economy and corporate earnings, experts say. While the elction isn't until November, many experts say the best scenario would be for President Bush to pull ahead in polls and seem a shoo-in for re-election. That would clear away uncertainties that could cause problems for U.S. markets. FED COMMITTEE IS MEETING: The direction of short-term interest rates is certain to dominate a two-day private meeting of the Federal Open Market Committee that started Tuesday in Washington. The committee, the Fed's policymaking arm, is meeting to decide monetary policy. The Fed has lowered short-term interest rates 22 times the past three years. Rates are now at 20-year lows. MOST FAVOR RATE CUT: Nearly everyone, including President Bush, seems to think that a cut in short-term interest rates would be good. But bond traders are less certain. Bond investors want the recession to end. A weak economy means weak companies that can't always pay bondholders. But they worry that a strong recovery would reignite inflation. That erodes the value of the fixed income investors get from bonds. DORFMAN SAYS STOCKS COULD WORSEN: It's been a tough year for stocks, and they could easily head lower, according to USA TODAY columnist Dan Dorfman. He cites growing uncertainty over who will be elected president in November and continued strong worries about the Japanese market as possible problems. Also a concern, he says: An outpouring of new stock and "ritzy stock valuations." MONEYMAKERS MAKE LESS MONEY: Top moneymakers on Wall Street took home less last year than in previous years, according to Financial World's annual survey, due on newsstands July 8. The median earnings of the top 100 in 1991 was $9 million each, down from $15 million in 1988. Big winners: Fund managers, who take a cut of the profits they generate. The year before, leveraged buyout kingpins dominated top spots. TYCO BOUNCES BACK: Tyco Toys, which dropped 4 in two days in mid-June, rose 3:4 to close at $17 1:2 Tuesday. Two factors boosted the stock. The company announced a less-expensive deal to acquire competitor Universal Matchbox Group. Terms: $107.1 million - $8.50 a share - down from $135.5 million or $10.75 a share offered earlier. Also, Salomon Bros. initiated coverage of Tyco with a buy rating. INVESTORS LOSING PATIENCE: Investors in stocks have shown remarkable trust and patience the past 18 months. Stocks have soared as investors poured money into the market on the hope that companies would emerge from the recession in shape to bring home huge earnings gains. But patience is wearing thin. The Dow Jones industrial average has dropped 3% over the past month. Stock investors could take an early bath. INDEX UP FOR FIFTH MONTH: The government's main economic barometer rose for the fifth straight month in May, the Commerce Department said Tuesday. But the 0.6% advance failed to ease concerns about the fragility of the economic recovery. The department said its Index of Leading Economic Indicators advanced 0.6%, suggesting continued but less-than-robust growth later this year. GOLD DOWN, SILVER UP: Gold fell domestically and silver was up Tuesday. On the Commodity Exchange, gold bullion for current delivery settled at $343.10 a troy ounce, off 60 cents. Republic National Bank said gold lost 45 cents to $343. Gold rose in London to $343.45 from $342.45. On the Comex, silver bullion settled at $4.028, up from $4.008. In London the metal rose to $4.03 from $3.98. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Wednesday at 3318.52 after closing down 1.34 Tuesday. The New York Stock Exchange composite opens at 224.33, down 0.11. The American Stock Exchange market value opens at 379.28, up 2.18. The NASDAQ OTC composite opens at 563.60, up 4.80. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Wednesday. It opens at 0.5260 British pounds, up from 0.5243; 5.1265 French francs, up from 5.0940; 1.5243 German marks, up from 1.5151; and 125.77 Japanese yen, up from 125.30. (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. Personal Investing Editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. 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