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 Tue, Jun 23 1992 Date: Tue, 23 Jun 92 05:14:12 EDT Message-ID: 06-23 0000 DECISIONLINE: Personal Investing USA TODAY Update June 23, 1992 Source: USA TODAY:Gannett National Information Network BROKERAGE FIRM STOCKS SUFFER: Brokerage firms' stocks are bearing the brunt of investor insecurities after a record run-up earlier this year. The stocks of full-service stock brokers Bear Stearns, Merrill Lynch, Morgan Stanley, PaineWebber and Salomon have dropped as much as 30% in six months. Analysts say a look at second-quarter earnings estimates doesn't justify the slide. But a look at the market might. STOCK MARKET MOVES ARE `UGLY': The stock market in the last few months "has been pretty ugly," according to Larry Eckenfelder, analyst at Prudential Securities in San Francisco. "The movements have been more rapid and violent than we have seen in the past." The peak in January of all but one of five full-service national brokers could mean a further dip of the Dow next month. Salomon peaked in July. STOCKS CONTINUE TWO-WEEK SLIDE: Stock prices posted another decline Monday, extending their slide of the past two weeks even though some buying lightened the market's losses. The Dow Jones average of 30 industrials, down nearly 30 points at its morning low, closed with a 4.55-point loss at 3280.80. Decliners beat advancers by more than 9 to 5 on the New York Stock Exchange, where volume was 169.34 million shares. GM STOCKS STRENGTHENING: Wall Street - long a harsh critic of General Motors - is showing its approval of major shakeups at the domestic automaker. In a risky financial move engineered by new GM CFO William Hoglund, GM officials persuaded international investors to snap up $2.5 billion in common stock to bankroll its reorganization. Since then, GM shares, now near $45, could near $70 by year's end, analysts say. INTEL UP; BORLAND, APPLE DOWN: Intel rose 1 1:4 to $54 Monday after Wertherim upgraded it from a sell to buy. The brokerage said the semiconductor maker is well-positioned to take advantage of a change by computer makers to 486 microprocessors from 386s. Other computer-related companies fell. Borland International fell 1 3:4 to $46 1:4. Apple Computer slid 1:2 to $44 1:4. Morgan Stanley downgraded it to a hold from a buy. TELMEX STOCK DROPS ON BAD NEWS: Telefonos de Mexico stock dropped Monday 2 7:8 to $44 7:8 after falling 4:18 last week. The stock was over $60 as recently as March. Reports in Barron's and The New York Times raised questions about Telmex's earnings growth and accounting methods. Although earnings growth has slowed, "it's expected," according to Scott Kalb of Smith Barney. DRUG NEWS PUSHES MERCK STOCK UP: Drug manufacturer Merck soared 2 1:4 to $50 1:2 Monday on news that the federal government approved its new drug, Proscar, to treat prostate enlargement. Analysts say sales of the drug could reach $1 billion a year by 1995. The drug already is on sale in England and will be available in the United States in July. Merck has applied for marketing approval in 30 other countries. CHARNEY WOULD SELL STOCK IN UPI: A lawyer for United Press International's creditors will ask a judge Tuesday to approve the sale of UPI to Middle East investors for $3.5 million and reject an offer made Monday by lawyer Leon Charney. Under his offer, his group would own 52.5% of the company, employees 7.5% and creditors 40%. Eventually UPI would sell shares to the public or an outside investor, Charney said Monday. INVESTORS FAVOR DEFENSIVE STOCKS: Investors are hunkering down with defensive stocks as the market grows turbulent. The selling that has driven the Dow Jones industrial average down 3.6% in two weeks seems to be eluding such steady growers as Kellogg and Campbell Soup. They're among a handful of defensive stocks flat or up since the Dow last broke 3400 on June 8. STOCKS SURVIVE DUMPING: Defensive stocks were hot through the recession but fell out of favor in January, when investors sensed an economic recovery and lunged into auto, homebuilder and other stocks that do best in a recovering economy. Now, as investors dump some stocks in the face of what could be a broad market pullback, they appear to be hanging on to drug, food and other defensive stocks. T-BILL RATES EDGE UP: The Treasury Department sold $11.7 billion in three-month bills Monday at an average discount rate of 3.67%, up from 3.66% last week. Another $11.6 billion was sold in six-month bills at an average discount rate of 3.77%, up from 3.75% last week. GOLD UP, SILVER MIXED: Gold advanced after falling overseas, and silver was mixed Monday. On the Commodity Exchange, gold bullion for current delivery settled at $343.70 a troy ounce, up $2.90. Republic National Bank said gold rose $2.50 to $343.20. On the Comex, silver bullion for current delivery settled at $4.035 a troy ounce, up from $4.020. In London the metal slipped to $4.05 from $4.10. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Tuesday at 3280.80 after closing down 4.55 Monday. The New York Stock Exchange composite opens at 221.56, down 0.40. The American Stock Exchange market value opens at 375.62, down 3.77. The NASDAQ OTC composite opens at 549.73, down 4.47. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mostly down on Tuesday. It opens at 0.5373 British pounds, down from 0.5379; 5.2750 French francs, down from 5.2955; 1.5667 German marks, down from 1.5720; and 127.10 Japanese yen, up from 126.97. (As of 3 p.m. Monday. Source: First American Bank of New York.) 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