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, Jul 28 1992 Date: Tue, 28 Jul 92 04:32:03 EDT Message-ID: 07-28 0000 DECISIONLINE: Banking & Economy USA TODAY Update July 28, 1992 Source: USA TODAY:Gannett National Information Network SEC PROBING BAD BROKERS: The Securities and Exchange Commission is looking into whether big Wall Street firms routinely hire and keep stockbrokers who have records of misleading or cheating investors. The SEC sent letters to at least nine brokerages seeking to review the hiring, retention and supervision of brokers with "multiple customer complaints, lawsuits or arbitrations alleging ... sales practice problems." SEC WANTS NAMES: Firms that received the SEC letter seeking information on brokers with multiple customer complaints reportedly include Merrill Lynch, Shearson Lehman Bros., Prudential Securities, Dean Witter Reynolds, PaineWebber, Smith Barney and Kidder, Peabody. The SEC asks for the names of the firms' 50 brokers facing the most written customer complaints in 1990, 1991 and 1992. JAPANESE BANKS LOSING GROUND: Japan's stagnant economy and bank mergers in the USA and Europe are starting to undermine Japan's lead in banking, American Banker says. Still, Japanese banks claim eight of the 10 top spots on the banking newspaper's list of the world's 500 largest banks. The other two are French. Only one U.S. bank is in the top 25: Citicorp, No. 23. The rankings are based on year-end 1991 assets. DRUG STOCK GAINS NOT ENOUGH: Stocks edged lower Monday despite gains among drug company stocks. The Dow Jones industrial average lost 3.51 points to 3282.20. Winners beat losers 928 to 804 on the New York Stock Exchange. Investors bought drug stocks, apparently relieved that the British drug giant Wellcome completed its worldwide initial public stock offering of 270 million shares worth $4.1 billion. DRUG STOCKS TO OUTDO MARKET: Many drug stocks have been recovering recently. Some investors have been shifting back to the group. July "would be the first month in 1992 that drug stocks outperformed the market," says Ronald Nordmann, analyst at PaineWebber.He says the PaineWebber index of the 10 largest U.S. drug companies was up 1.4% in July, vs. 0.8% for the S&P 500. TRADER SAYS RALLY POSSIBLE: Investors may be holding back because of weakness in stocks around the world. Last week the Nikkei average in Japan fell 6.3%, London's FTSE 30 fell 3.4% and the Paris CAC-40 dropped 2.7%. In the USA, Dow industrials fell 1.4%. Trader Brad Weeks says U.S. stocks have been trading in a narrow range, which he sees as a sign of hidden strength. "We could get a pretty good rally." HOME SALES DECLINE IN JUNE: The economy got some bad news Monday. Figures from the National Association of Realtors show existing home sales fell 3.4% in June, compared to the same month last year. Home sales dropped to a seasonally adjusted annual rate of 3.36 million, down from 3.43 million in May. It was the third monthly decline in a row. CHRISTMAS FORECAST IN JULY: The first Christmas retail sales estimates are forecasting growth of up to 11%. "This won't be a super Christmas, but it's a bonanza compared to last year," says Ed Johnson, retail analyst for Lynch, Jones & Ryan. His forecast calls for a sales growth of between 6% and 11%. Last year, holiday revenue rose an anemic 2%-3%, he says. MORTGAGE BANKS TO GET A LIFT: Falling interest rates are expected to pump up earnings of mortgage banks, which specialize in making home loans that can be held or sold in the secondary market. "The future is very promising for select, well capitalized mortgage bankers that have the ability to meet demand," says G. Gareth Plank, analyst with Dean Witter Reynolds. Low rates boosts mortgage refinancings. NATIONSBANK SELLS MORTGAGE BIZ: NationsBank Monday agreed to sell its residential mortgage servicing business to Margaretten Financial for $134 million. Margaretten will have the right to service about $7.6 billion in residential mortgages. Peter Treadway, analyst with Smith Barney, increased his earnings estimate for Margaretten from $1.85 to $2.00 for next year. RATES UP AT TREASURY AUCTION: The Treasury Department sold $11.6 billion in three-month bills at an average discount rate of 3.18% vs. 3.16% last week. Another $11.6 billion was sold in six-month bills at an average discount rate of 3.27% vs. 3.24% last week. OIL PRICES ADVANCE: Oil prices rebounded late in the trading session Monday after the Defense Department announced joint military maneuvers with Kuwait. Light sweet crude oil for August delivery climbed 6 cents to $22.04 a barrel on the New York Mercantile Exchange. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Tuesday at 3282.20 after closing down 3.51 points Monday. The New York Stock Exchange composite opens at 226.50, up 0.02. The American Stock Exchange market value opens at 382.06, down 0.47. The NASDAQ OTC composite opens at 564.73, down 0.88. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Tuesday. It opens at 0.5215 British pounds, down from 0.5280; 5.0010 French francs, down from 5.0775; 1.4825 German marks, down from 1.5042; and 127.70 Japanese yen, down from 127.73. (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: 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