Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Mon, Jun 22 1992 Date: Mon, 22 Jun 92 05:14:50 EDT Message-ID: 06-22 0000 DECISIONLINE: Personal Investing USA TODAY Update June 22, 1992 Source: USA TODAY:Gannett National Information Network BOND FUNDS FAVORED: In the mutual funds industry, bond funds are getting the cash. Investors last year put $68 billion into bond funds, nearly twice the $38 billion for stock funds. In this year's first four months, bond funds took in a record-breaking $31.5 billion. Investing in bank certifcates of deposit and money-market funds has plunged. Individual CD assets have dropped 10% this year. CDS WON'T GO ANYWHERE: Savers who are waiting for CD and money fund yields to rise will probably be disappointed. Short-term interest rates, which govern savings rates, rise when the economy heats up. But few economist expect this recovery to be a strong one. But the recent rush to bond funds has some experts worried. "I'm troubled by the people who ... are unaware of the risks," says John Bogle of Vanguard. HEEBNER DUMPS DILLARD, TYCO: Money manager Ken Heebner last week dumped huge amounts of Dillard Department Stores and Tyco Toys shares, drubbing both stocks. Dillard lost 3 1:2 last week to close at $35 1:8 Friday. Tyco finished at $16 7:8, down 4 3:8 for the week. Heebner has a knack for rapidly buying and selling in huge quantities, leading to big price fluctuations. He's down about 10% this year. PICK OIL SERVICES: A combination of low finding costs, stepped-up economic growth overseas and large volumes of oil to be found abroad should help rejuvenate the oil services business, predicts oil tracker Charlie Maxwell. His top three plays, plus year-end 1993 stock targets: Schlumberger (now $66), $84; Baker Hughes ($21 3:4), $34; Baroid ($5 5:8), $12. MARKET SURVIVES WITCHING HOUR: The stock market rode out a triple witching hour Friday, rebounding 11.23 points to 3,285.35. Trading was heavier than usual, but the market otherwise showed no disruptive effects from the witching hour involving stock-index futures and options. Analysts said stocks benefited from buying by traders looking for bargains after the market's recent sharp drop. FUND TO BUY BACK $185 MILLION: Fund American Enterprises Holdings Inc. announced Friday an agreement in principle to buy back $185 million of preferred stock from former parent company American Express. Also Friday, the company extended its self-tender offer to July 6 and increased the number of common shares to be repurchased under the offer to 5 million from 4 million. It's paying $70 a share. HEALTHCARE STOCKS LOSERS: Healthcare stocks have been one of Wall Street's romances, according to Bloomberg Business News. But the romance is off. Drug stocks have been down all year and last week investors turned on Monsanto, U.S. Surgical and other such companies. Friday, smallish Heart Technology Inc. shares dropped 25% on news the company told customers to halt use of a coronary artery plaque-removal device. SOME DROPS HAVE REASONS: Some drug stocks have fallen for good reason. Bristol-Myers Squibb said wholesalers were reducing their inventories of its products. Monsanto last week said its second-quarter earnings might be 20% to 30% less than analysts' estimates because of the high cost of marketing a new Searle antibiotic. Yet Merck stock is down 15% this year though the company's progress never skips a beat. BILL LOOKS AT STOCK OPTIONS: One of several Congressional bills addressing regulation of corporate executive pay looks at stock and cash awards based on increases in stock prices. The bill by Sen. Carl Levin, D-Mich., would require corporations to report more clearly and thoroughly executives' stock-option deals. A Gannett News Service study found at least 16 companies offer such bonuses. COLLIDER EXEMPT BONDS UNCHANGED: Tax-exempt bonds sold to help finance the Superconducting Super Collider in Texas were unchanged to down 7:8 in light trading Friday, according to municipal bond traders. The House Wednesday eliminated nearly all the $483 million in funding due the project next year. Texas issued $250 million in bonds for the project. Those were not affected by the cuts. FED COULD LOWER RATES: The Federal Reserve System could lower interest rates by mid-July, analysts at CRT Government Securities said Friday. In a weekly financial market calendar out Friday, CRT economists said that "with M2 consistently below target, recent inflation news seemingly acceptable, and a lackluster recovery underway, the speculation is justified." GOLD FALLS, SILVER MIXED: Gold prices fell, and silver was mixed Friday. On the Commodity Exchange, gold bullion for current delivery settled at $340.80, off $1.80. Republic National Bank said gold slipped $1.40 to $340.70. The market was closed Thursday for exchange elections. On the Comex, silver bullion for current delivery settled at $4.020, down from $4.080. In London, the metal rose to $4.10 from $4.09. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Monday at 3285.35 after closing up 11.23 Friday. The New York Stock Exchange composite opens at 221.96, up 1.35. The American Stock Exchange market value opens at 379.39, up 1.90. The NASDAQ OTC composite opens at 554.20, up 5.03. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing Editor: Beth Mann. (1-919-855-3491) 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