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 Wed, Jul 29 1992 Date: Wed, 29 Jul 92 04:32:50 EDT Message-ID: 07-29 0000 DECISIONLINE: Banking & Economy USA TODAY Update July 29, 1992 Source: USA TODAY:Gannett National Information Network CONSUMER CONFIDENCE PLUNGES: Consumer confidence plunged this month, signaling the economy will likely remain weak into 1993. The Conference Board, a business research group, said Tuesday its confidence index dove to 61 in July from 72.6 in June - biggest drop since October. A reading below 80 is a sign the economy is in recession or barely growing. The index is based on a monthly survey of 5,000 households. BOND YIELDS TUMBLE: Interest rates on long-term bonds tumbled Tuesday, propelled by a gloomy report on consumer confidence. The yield on the bellwether 30-year Treasury bond plunged to 7.43% from 7.51% Monday. It was at 7.66% just a week ago. Bond yields have fallen sharply the past week because of economic reports that the economy may be weakening. Tuesday's drop means mortgage rates will likely continue to slide. SURGING DOW GAINS 51.87 POINTS: Stocks racked up impressive gains Tuesday as declining interest rates encouraged even more savers to switch from certificates of deposit to stocks. The Dow Jones industrial average gained 51.87 points to 3334.07. That's the Dow's biggest one-day rise in six months. Also helping: Good earnings from Chrysler, which prompted a flurry of buying in auto stocks. EARNINGS NEWS HAS BEEN GOOD: A pattern of unexpectedly good earnings is emerging for the 500 biggest stocks on the New York Stock Exchange. Of 324 that already reported second-quarter earnings, 51% exceeded analyst expectations and 15% of them were on target, according to IBES research service. "The key elements of a market advance - falling interest rates and rising earnings - are in place," says analyst Eugene Peroni. CHRYSLER OFFERS SURPRISING NEWS: Chrysler reported stronger-than-expected second-quarter earnings Tuesday, surprising Wall Street and sparking a rally in U.S. auto stocks. Chrysler's net income totaled $178 million, or 54 cents a share - nearly double what many analysts estimated. Chrysler stock jumped 1 11:16 to $21 3:4. Chrysler's results portend goods new for Ford, up 1 3:4 to $45 3:4, and General Motors, up 1 1:2 to $41 3:8. PUBLIC CAN COMMENT ON RULES: The Securities and Exchange Commission is giving the public 90 days to comment on proposed rules that would allow three new mutual funds. Interval funds would let investors sell shares only at set intervals. Extended-payment funds could take longer than seven days to pay investors who redeem shares. The third would be a closed-end fund that would regularly buy back part of investors' shares. EMPLOYMENT COSTS RISE MODESTLY: Workers' wages, salaries and benefits rose 3.6% the year ended June 30, the smallest increase in four and a half years, the Labor Department says. The modest rise is more evidence that the sluggish economy is squelching inflation. Inflation slowed from 6.1% in 1990 to 3.1% last year. This year, inflation is running at a 3.1% annual rate. Wages and salaries rose just 2.9% the year ended June 30. CLIFFORD INDICTMENT EXPECTED: A bank fraud indictment against Clark Clifford, advisor to every Democratic president since Harry Truman, is expected to be announced Wednesday, the Associated Press said. The possible indictment of Clifford, his law associate Robert Altman and others, stems from their alleged role in the takeover of First American Bank by the Bank of Credit and Commerce International, AP said. MILKEN NO HELP: Michael Milken testified Tuesday that he never bribed customers of Drexel Burnham Lambert, angering government prosecutors. Milken was testifying at the trial of Patricia Ostrander, a former portfolio manager at Fidelity Investments. She was convicted of taking bribes from Milken despite his testimony. Milken is waiting to hear if Judge Kimba Wood will reduce his 10-year prison term. OIL FALLS ON COOLED TENSIONS: Crude oil futures were virtually unchanged on the New York Mercantile Exchange Tuesday after statements by U.S. officials that an attack on Iraq is not imminent. Light sweet crude oil for September delivery settled 1 cent higher at $22.05 a barrel, losing early gains on the news from the Middle East. GOLD RISES GLOBALLY: Gold rose worldwide Tuesday, but silver was down. On the Commodity Exchange, gold bullion for current delivery settled at $358.90, up $1. Republic National Bank said gold rose $1.45 to $359.25. The metal also rose in London, Zurich and Hong Kong. On the Comex, silver bullion for current delivery settled at $3.943, down from $3.947. In London, the metal fell to $3.95 from $3.96. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Wednesday at 3334.07 after closing up 51.87 points Tuesday. The New York Stock Exchange composite opens at 229.54, up 3.03. The American Stock Exchange market value opens at 384.55, up 2.49. The NASDAQ OTC composite opens at 571.63, up 6.90. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Wednesday. It opens at 0.5188 British pounds, down from 0.5215; 4.9735 French francs, down from 5.0010; 1.4740 German marks, down from 1.4825; and 127.40 Japanese yen, down from 127.70. (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. 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. 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