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 Fri, Jul 17 1992 Date: Fri, 17 Jul 92 05:16:17 EDT Message-ID: 07-17 0000 DECISIONLINE: Banking & Economy USA TODAY Update July 17-19, 1992 Source: USA TODAY:Gannett National Information Network ECONOMY GETS SOME BAD NEWS: Housing starts fell 3.2% last month, the Commerce Department said Thursday. That followed an 11% rise in May and 19% plunge in April. Groundbreakings for homes and apartment buildings fell in all regions except the West, the department said. That was just one of three jolts of bad news for the economy. Thursday's other bad news: Jobless claims remain high and a rate hike threatens exports. (For more, see special Economy below.) STOCKS UP A BIT: Wall Street welcomed near-candidate Ross Perot's announcement Thursday that he would not seek the presidency. After Perot's morning announcement, the Dow Jones industrial average quickly rose 20 points before falling back on poor corporate earnings, rising German interest rates and signs of a weakening economy. For the day, the Dow rose 16.21 points to 3361.63. MARKET PREFERS BUSH: "Perot's withdrawal removes a tremendous amount of uncertainty from the markets," says David Bostian, economist at Heine, Herzog, Geduld. David Jones, economist at bond brokerage Aubrey G. Lanston, says, "Regardless of what you think of Clinton, Wall Street favors known quantities, and that's Bush." So if Clinton continues to surge in the polls, it "would probably weaken stocks and bonds." CONSUMERS ON MORTGAGE FRENZY: Consumers are taking advantage of the lowest mortgage interest rates in 20 years. Applications for home loans soared 71.5% last week from the week before, according to a survey by the Mortgage Bankers Association. Refinancings played a big role, jumping to 59.4% of total applications. The average rate on 30-year fixed mortgages fell to 8.13% last week from 8.48% three weeks ago. MARKETS MIXED OVERSEAS: London shares dipped on news that Germany raised an important interest rate. Frankfurt edged higher on the same news. Tokyo's Nikkei sank on worries about real-estate industry debts. Hong Kong shares continued to surge and a key index closed at a record high. GOLD, SILVER FALL: Precious metals fell on the German Bundesbank's hike in its discount rate. Gold fell to $352.60, off $1.40 on the Commodity Exchange. Republic National Bank quoted gold at $352.30, off 85 cents. Gold rose overseas. Silver bullion fell in London to $3.92 from $3.95. On the Comes, silver fell to $3.908 from $3.940. GASOLINE OUTPACES HEATING OIL: Oil prices finished mixed as gasoline futures overtook home heating oil for the first time in a week. Light sweet crude oil for delivery in August settled at $21.79 a barrel, up 8 cents, at the New York Mercantile Exchange. Unleaded gasoline for August delivery settled at 60.95 cents a gallon, up 1.04 cents. Home heating oil for August delivery settled at 60.12 cents a gallon, down .22 cent. SPECIAL PACKAGE ON ECONOMY: CLAIMS STILL ABOVE 400,000: About 401,000 people applied for jobless benefits the week ended July 4, the Labor Department says. That was down from 416,000 the previous week. But some of the drop occurred because state offices were closed July 3. Also, economists say that any week above 400,000 is a sign of a troubled economy. BUNDESBANK TO HIKE RATE: A rate hike announced Thursday threatens exports. Germany's central bank, the Bundesbank, says it will raise its discount rate Friday to 8.75% from 8%. Economists say the increase is bad news for the U.S. economy. It will put upward pressure on rates in Germany and Western Europe. Higher rates will likely slow economic growth in Europe. Weaker growth could cut demand for U.S. exports. ECONOMY `LOSING MOMENTUM': Thursday's bad news shows that "the people out there paying the bills and buying the groceries have every right to be uneasy," says Wayne Gantt, chief economist at Interstate:Johnson Lane in Atlanta. "Obviously," says David Seiders, chief economist at the National Association of Home Builders, "the economy is losing momentum." (End of package.) DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Friday at 3361.63 after closing up 16.21 Thursday. The New York Stock Exchange composite opens at 229.49, up 0.29. The American Stock Exchange market value opens at 388.34, up 1.47. The NASDAQ OTC composite opens at 576.19, up 0.72. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mixed on Friday. It opens at 0.5168 British pounds, down from 0.5200; 4.9880 French francs, down from 5.0005; 1.4775 German marks, down from 1.4800; and 125.26 Japanese yen, up from 125.12. (As of 3 p.m. Thursday. 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