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, Aug 6 1992 Date: Thu, 6 Aug 92 04:32:41 EDT Message-ID: 08-06 0000 DECISIONLINE: Banking & Economy USA TODAY Update Aug. 6, 1992 Source: USA TODAY:Gannett National Information Network BRADY MIGHT TRY TO CURB FED: Treasury Secretary Nicholas Brady turned up the heat Wednesday on the Federal Reserve, saying he might favor a proposal that could curb the Fed's political independence. The Bush administration, frustrated by a go-nowhere economy in an election year, has long urged the Fed to push interest rates lower faster to get the economy moving again. HEADS MIGHT BE STRIPPED OF VOTE: Treasury Secretary Nicholas Brady Wednesday told the Senate Banking Committee and The Wall Street Journal that he might back a plan to bar the politically independent heads of the Fed's 12 regional banks from voting on monetary policy - basically, the direction of short-term interest rates. That would leave all votes in the hands of the seven Fed governors, named by the president. ECONOMY'S PERFORMANCE BUMPY: The economy turned in an uneven, sluggish performance in June and July as falling mortgage rates failed to ignite home sales, the Federal Reserve said Wednesday. The central bank said that economic activity has been "uneven"; in June, it said conditions were improving. BRADY WANTS MORE S&L FUNDS: Treasury Secretary Nicholas Brady Wednesday urged Congress to act quickly to provide more funds for the cleanup of savings and loan. "There is simply no logic in delaying funding, creating confusion and costing the U.S. taxpayers millions of dollars each day," Brady told the Senate Banking Committee. The Senate approved $43 billion in funding for the Resolution Trust Corp. FBI CONTINUES PHAR-MOR PROBE: The FBI said Wednesday it is continuing to investigate allegations that two top executives of the fast-growing Phar-Mor discount drugstore chain engaged in an embezzlement scheme that cost the Ohio-based business $350 million. The FBI has received the company's review of the wrongdoing by president Michael Monus and CFO Patrick Finn, who were fired Friday. AIRLINE STOCKS DIVE: Airline stocks slumped Wednesday after Salomon Bros. airline analyst Julius Maldutis predicted "the mother of all fare wars," late this year. Maldutis said airlines will suffer major losses as a result and some carriers won't survive. American parent AMR fell 2 5:8 to close at $63; United parent UAL fell 5 1:4 to close at $105 5:8; and Delta fell 1 3:8 to close at $53. TREASURY TO SELL NOTES, BONDS: The Treasury Department says it will sell $36 billion in notes and bonds during its quarterly auction next week. The Treasury will sell $15 billion in three-year notes Tuesday; $11 billion in 10-year notes Wednesday; and $10 billion in 30-year bonds Thursday. The money will be used to pay interest on the federal debt and to run day-to-day operations. DOW, T-BONDS, OIL ALL DOWN: The Dow Jones industrial average fell 19.18 points to 3365.14. The NASDAQ composite index fell 4.45 points to 576.87. Yields on 30-year Treasury bonds dipped to 7.42% from 7.43%. The discount rate on three-month Treasury bills fell to 3.16% from 3.17%. Comex gold lost $3.50, to $349.20 an ounce. Light sweet crude oil fell 17 cents, to $21.18 a barrel, on the N.Y. Mercantile Exchange. BANK CD YIELDS FALL: Bank CD yields fell this week, according to Bank Rate Monitor. Average yields for six-month certificates of deposit were 3.33% vs. 3.35%. For one-year CDs, rates were 3.65% vs. 3.70%. For 2 1:2-year CDs, 4.44% vs. 4.48%; for five-year CDs, rates were 5.66% vs. 5.71%. MONEY MARKET FUNDS HIT NEW LOW: Money market mutual funds are at their lowest since being created in 1973, according to IBC:Donoghue's Money Fund Report. In 1975, yields clocked in at 6.36% and worked their way up to a high of 16.82% in 1981. They haven't been anywhere near that level since, dropping to 12.23% in 1982 and 8.58% in 1983. As of July 29, they were at 3.14%, down from 5.71% in 1991. IBM LEADS STOCK DOWNTURN: Stocks lost ground Wednesday as IBM led a broad downturn. The Dow Jones industrial average fell 19.18 points to 3365.14. Broader indexes also dropped. Decliners outnumbered advancers 1,026 to 709 on the New York Stock Exchange, where volume was 172 million shares. IBM executives worried stock analysts Wednesday by forecasting little or no growth for their mainframe computers. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Thursday at 3365.14 after closing down 19.18 points Wednesday. The New York Stock Exchange composite opens at 232.29, down 1.10. The American Stock Exchange market value opens at 389.90, up 1.92. The NASDAQ OTC composite opens at 576.87, up 4.45. DOLLAR OPENS UP OVERSEAS: The dollar opens on an upswing Thursday. It opens at 0.5227 British pounds, up from 0.5207; 4.9905 French francs, up from 4.9830; 1.4772 German marks, up from 1.4757; and 127.36 Japanese yen, up from 127.21. (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: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes violates federal law. 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