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 Mon, Aug 10 1992 Date: Mon, 10 Aug 92 04:17:59 EDT Message-ID: 08-10 0000 DECISIONLINE: Banking & Economy USA TODAY Update Aug. 10, 1992 Source: USA TODAY:Gannett National Information Network ECONOMY'S GROWTH TO BE SLIGHT: The economy will grow 1.9% this year and 2.9% next year, according to a monthly survey of 50 economists by Blue Chip Economic Indicators newsletter. The estimates were revised down from 2.1% growth this year and 3% growth next year, reflecting economists' concern over weak consumer confidence, lack of job growth and sluggish consumer spending. JOBLESS RATE DIPS A BIT: The nation's unemployment rate fell slightly in July, to 7.7%, as a federal summer jobs program helped to send payroll employment up by the largest amount in two years, the government said. The July figure was a break after two months of worsening unemployment; June's rate was 7.8%, an eight-year high. The slight improvement still left 9.76 million Americans unemployed. CONSUMERS DECREASE DEBT: Consumers reduced their outstanding debt for a fifth month in June, improving balance sheets by $1.02 billion, the Federal Reserve said Friday. The decline translated into a 1.7% reduction at a seasonally adjusted annual rate and came entirely from a drop in auto loans, which fell by $2.80 billion in June. The June decrease followed declines in debt of $893 million in May. MELLON WILL APPEAL: Mellon Bank Friday said it will appeal a reimbursement order from a federal court. The Pittsburgh banking company must reimburse some trust customers for $55 million of so-called sweep fees charged since 1981. U.S. District Court Judge Marvin Katz ordered Mellon Bank to repay fees collected for both fiduciary and non-fiduciary accounts. MELLON SAYS FIGURE TOO HIGH: Mellon Bank said the amount it took in for so-called sweep fees is "significantly" less than the $55 million a court has ordered it to pay to customers. Banks charge sweep fees for temporarily investing idle cash on behalf of their customers. The Pennsylvania Orphan's Court, which has jurisdiction over trustee's fees, found the fees were "reasonable." INVESTORS WARM TO SAVINGS BONDS: Investors fleeing low rates on certificates of deposit and money-market funds are discovering the beauty of U.S. Savings Bonds. Sales of Uncle Sam's best-known bonds are 35% ahead of last year's pace. Through July, sales of bonds topped $7.7 billion, vs. $5.7 billion through the first seven months of 1991, according to the Treasury Department. LOW CD YIELDS HELP BOND SALES: The surge in sales of U.S. Savings Bonds is building. July sales were $1.1 billion, up 43% from $769 million in July 1991. "Low CD rates are a driving force behind the sales," says Don Pederson, president of Detroit-based Savings Bond Informer, which provides rate information to bond holders. Savings Bonds pay a minimum 6% if held five years. Five-year Treasury notes are yielding 5.63%. ANALYST WARNS ON DELTA SHARES: Salomon Bros. analyst Julius Maldutis is advising clients to look for a crash landing on Delta shares. The stock already is wobbly after three straight quarterly losses. Maldutis is telling some money managers he wouldn't buy Delta until it reaches $35. That's a 34% decline from Friday's close of $53 3:8 and less than half its 1992 high of $75 1:4. CITICORP FILES TO OFFER PERCS: Citicorp announced Friday it has filed with the Securities and Exchange Commission to offer 32.4 million depositary shares of a new series of PERCs to raise about $650 million. Bloomberg Business News said the company said PERCs, or preferred equity redemption cumulative stock, will be classified as Tier 1 capital. Citicorp's Tier capital now stands at 4.25%. FREE TRADE TALKS CONTINUE: Talks between negotiators from the USA, Canada and Mexico continued in Washington, D.C., Sunday. The goal: To bring Mexico into a free-trade agreement with the USA and Canada, who have had their own agreement since 1989. The agreement could make it easier for U.S. businesses to tap Mexico's low-cost labor, because free trade would mean lower or no tariffs on goods made there. DOW, T-BILLS, OIL FALL: The Dow Jones industrial average fell 8.38 points Friday to 3332.18, off 61.60 points for the week. The NASDAQ composite index fell 0.28 points to 573.74. Yields on 30-year Treasury bonds fell to 7.39% from 7.44%. The discount rate on three-month T-bills dipped to 3.14% from 3.15%. On the N.Y. Mercantile Exchange, light sweet crude oil lost 20 cents to $21.22 a barrel. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Monday at 3332.18 after closing down 8.38 points Friday. The New York Stock Exchange composite opens at 230.79, down 0.71. The American Stock Exchange market value opens at 390.13, up 0.36. The NASDAQ OTC composite opens at 573.74, down 0.28. 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. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. 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