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 Thu, Jun 25 1992 Date: Thu, 25 Jun 92 05:35:29 EDT Message-ID: 06-25 0000 DECISIONLINE: Banking & Economy USA TODAY Update June 25, 1992 Source: USA TODAY:Gannett National Information Network DURABLE GOODS ORDERS DIP: The Commerce Department said Wednesday new orders for durable goods fell 2.4% in May from April, hinting that the economic recovery is weak. May's decline followed two months of gains in orders of goods expected to last three years or more. "The number indicates the economy is simply not performing up to snuff yet," says Allen Sinai, an economist at Boston Co. Economic Advisers. (For more, see special Economy package below.) STOCKS CREEP AHEAD: A decline in interest rates helped the stock market post scattered gains Wednesday for the second straight session. The Dow Jones average of 30 industrials rose 5.08 to 3290.70. Broader indexes were down slightly. Gainers edged out losers 868 to 845 on the New York Stock Exchange, where volume was 194 million shares. TOBACCO STOCKS HEAVILY TRADED: Two stocks, Philip Morris and RJR Nabisco, accounted for about 10% of trading of NYSE stocks Wednesday. Investors reacted to a U.S. Supreme Court decision on whether cigarette warnings shield tobacco companies from lawsuits. While they were heavily traded, tobacco stocks ended the day close to where they began. RJR slipped 1:8 to $9 3:8. Philip Morris edged up 5:8 to $73 3:4. CLIMAX SELLING MAY SIGNAL END: Analysts are reluctant to say the long slide in Japanese stocks is over, mainly because they haven't seen what they call climax selling - a wave of selling by investors who have abandoned hope of a rebound. The Nikkei stock average has tumbled 59% in 2 1:2 years. But the losses have been slow and steady. Wednesday, The Nikkei average fell 253.32 points to 15,853.67. AUTO SALES FALL: The auto industry's weak recovery is still on track, analysts say, despite the 0.6% mid-June decline in car and light truck sales by five major automakers. Cars sold at an annual rate of 6.4 million June 11-20. Ford sales jumped 11%. Ward's Automotive Reports estimates Chrysler's sales were up 11% in mid-June. Toyota sales dropped 13% while Honda plummeted 21%. SEC CALLED COURAGEOUS: A panel of executive-pay experts pulled together by the Hay Group to discuss CEO pay Wednesday called the Securities and Exchange Commission courageous. SEC Chairman Richard Breeden is "truly a profile in courage" for proposing reforms simplifying the reporting of executive pay, says Sarah Teslik of the Council of Institutional Investors. Business groups oppose the reforms. CD YIELDS FALL: Bank certificate of deposit yields fell this week, according to Bank Rate Monitor. Average yields on six-month CDs fell to 3.69% from 3.71%. One-year yields were 4.04%, vs. 4.06%; 2 1:2-year, 4.93% vs. 4.95%; five-year, 6.14% vs. 6.15%. CRUDE HITS '92 HIGH: Oil futures rose to new highs for 1992 Wednesday amid concerns that heating oil supplies could be tight next winter. Light sweet crude oil for August delivery rose 30 cents to $22.89 a barrel at the Mercantile Exchange. Crude for next-month delivery hadn't ended that high since Nov. 8 when it hit $23.01. Home heating oil for delivery in July settled at 63.66 cents a gallon, up 1.55 cents. GOLD, SILVER DOWN: Gold and silver prices lost ground Wednesday. On the Commodity Exchange, gold bullion for current delivery ended at $342.80 a troy ounce, off $1.70. Republic National Bank said gold fell $1.45 to $342.65. Gold also fell in London and Zurich. Also on the Comex, silver bullion fell to $4.021 from $4.030. In London the metal slipped to $4.03 from $4.04. SPECIAL PACKAGE ON ECONOMY: ECONOMISTS EXPECTED INCREASE: Excluding defense-related orders, May's 2.4% decline in orders was not that steep. Orders for non-defense goods fell 0.6%. All major industry groups posted declines except for stone, clay and glass products, the Commerce Department said. Most economists expected a slight increase in orders for durables. RATE CUT NOT EXPECTED: "The (durable goods) numbers don't suggest the economy is weakening. It's just not accelerating," says economist Robert Genetski of Robert Genetski & Associates. But don't expect the Federal Reserve to cut interest rates, economists say. Despite a plea Tuesday from President Bush for another rate cut to stimulate the sluggish economy, short-term rates probably won't fall further. BUSH ASKS FOR RATE CUT: Bush told the New York Times he believes inflation is under control. "I'd like to see another lowering of interest rates." Rate cuts can instantly boost consumer confidence, but they generally take at least six months to translate to direct economic growth. "A small rate cut wouldn't really hurt or harm the economy immediately," says James Solloway, an economist at Argus Research. (End of package.) DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Thursday at 3290.70 after closing up 5.08 Wednesday. The New York Stock Exchange composite opens at 221.81, down 0.18. The American Stock Exchange market value opens at 374.20, down 2.54. The NASDAQ OTC composite opens at 551.40, down 1.97. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Thursday. It opens at 0.5319 British pounds, down from 0.5362; 5.2175 French francs, down from 5.2540; 1.5495 German marks, down from 1.5635; and 126.46 Japanese yen, down from 127.07. (As of 3 p.m. Wednesday. 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: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes 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