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, May 18 1992 Date: Mon, 18 May 92 05:21:50 EDT Message-ID: 05-18 0000 DECISIONLINE: Banking & Economy USA TODAY Update May 18, 1992 Source: USA TODAY:Gannett National Information Network INDUSTRIAL PRODUCTION UP: Industrial production rose in April for the third straight month, the Federal Reserve said Friday. Industrial output at factories, mines and utilities climbed 0.5% last month after growing 0.4% in March and 0.5% in February. The Fed also said factories were running at 78.7% of capacity in April, up from 78.4% in March. MORE GROWTH SEEN BY OECD: The economy should grow 3.6% next year from a modest 2.1% this year, the Organization for Economic Cooperation and Development predicts. The OECD, a think tank of 24 industrial nations, meets Monday for its annual conference. The group forecasts that Japan's economy will grow no more than 1.8% this year after expanding 4.5% last year. But Europe will have slow growth and high unemployment. O&Y BANKRUPTCY HURTS STOCKS: The stock market fell broadly Friday after Olympia & York, the world's largest development company, filed for bankruptcy protection in Canada and the United States. The Dow Jones average of 30 industrials fell 15.79 points to 3,353.09. It tumbled 16.32 for the week. The bond market rallied on the Olympia & York news and speculation the Federal Reserve might ease interest rates. ACAMPORA OPTIMISTIC: Many market watchers are pessimistic about the direction of stocks. But Ralph Acampora, Prudential Securities' chief of technical analysis, isn't one of them, reports USA TODAY columnist Dan Dorfman. Acampora says "I'm the most bullish I've been since the gulf war in January 1991 (when the Dow was 2470)." He sees the Dow jumping to 3700 to 3800 by year's end. Friday's close: 3353. FED NOT EXPECTED TO ACT: The Federal Reserve's Federal Open Market Committee meets Tuesday, and economists are not expecting the Fed to push interest rates down after the meeting. But there is a chance that the Fed will move to ease interest rates further the next month if the economy appears to falter, analysts say. The FOMC, which meets every six weeks, has kept Fed watchers guessing. MORTGAGE RATES DROP: Mortgage rates are heading down again. Since February, the national average rate on 30-year fixed mortgages has been stuck above 8.75%. The average even rose to 9% in March. Last week, the average quickly sank from 8.75% to 8.64%, its lowest level since January. Watch for mortgage rates to fall further, a number of economists say. GM CONTINUES RESTRUCTURING: GM is eliminating 13 of its 20 basic frames used to build cars and trucks, a cost-cutting measure taken as part of its huge restructuring plan. Chairman Robert Stempel told stock analysts about the cost-cutting move last week at a meeting to discuss GM's upcoming stock offering. The offering of additional common stock, GM's first since 1955, is expected to raise about $2.1 billion. EXXON TO CUT JOBS: Exxon USA confirmed Friday that it will cut its white-collar workforce by at least 1,000, or 10%, because of weak demand and low energy prices. The USA's largest oil company says the cuts will be made through voluntary severance and layoffs by Aug. 1. S&L COST COULD BE LOWER: Albert Casey, head of the Resolution Trust Corp. set up to oversee the S&L cleanup, says he believes the bailout will cost no more than $130 billion, the New York Times reported Sunday. Estimates on the cost of the cleanup started at $50 billion in 1989 and rose to $160 billion in June 1991. Casey cited lower interest rates as the reason for the lower estimate. OIL CLOSES WEEK ON UP NOTE: Oil prices advanced Friday, regaining much of the ground lost in several recent sell-offs. Light sweet crude oil for delivery in June settled at $20.69 per barrel, up 14 cents, at the New York Mercantile Exchange. For the week, the benchmark crude lost 17 cents. Traders said no news motivated trading, but said players just decided it was time to buy. GOLD UP, SILVER MIXED: Gold prices up, silver mixed Friday. On the New York Commodity Exchange, gold bullion for current delivery settled at $338.70 a troy ounce, up 70 cents from Thursday's close. On New York's Comex, silver bullion for current delivery settled at $4.086 a troy ounce, down from $4.107 late Thursday. Silver bullion rose in London to a late bid of $4.12 a troy ounce, from $4.11 bid late Thursday. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Monday at 3353.09 after closing down 15.79 points Friday. The New York Stock Exchange composite opens at 212.01, down 0.62. The American Stock Exchange market value opens at 390.37, down 1.42. The NASDAQ OTC composite opens at 574.43, down 2.03. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: Jason P. Smith. (919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution 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