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, Jul 7 1992 Date: Tue, 7 Jul 92 05:13:30 EDT Message-ID: 07-07 0000 DECISIONLINE: Personal Investing USA TODAY Update July 7, 1992 Source: USA TODAY:Gannett National Information Network $437B IN STOCKS, BONDS ISSUED: Companies issued a record $437 billion of stocks and bonds the first six months of this year, according to Securities Data and IDD Information Services. Low interest rates and high stock prices made it attractive for companies to raise money by selling stocks and bonds to the public. In the first six months of last year, $272 billion of stocks and bonds were sold. IT MAY BE TIME TO SELL BONDS: Returns on bond mutual funds don't often get much better than they were the last three months. Deciding if it's time to sell is a tough call. Bond prices rise when interest rates fall, and rates tumbled last quarter. The bellwether 30-year Treasury bond's yield fell from 8.11% at the end of April to 7.78% at the end of last month. With the Fed's key discount rate cut, yield is at 7.62%. INFLATION FEARS HAVE EFFECT: How bond mutual funds fare the rest of the year depends on inflation fears. When traders think inflation is likely to rise, they demand higher yields - and lower prices - from bonds. Fortunately, inflation hasn't been in the air much since 1981. In fact, inflation has averaged just 3.9% a year the past 10 years. It isn't likely to get much higher soon, says one bond fund manager. GITANO GETS A LOAN; SHARES JUMP: Gitano Group overjoyed stock investors Monday by landing a loan. Gitano reached a tentative agreement with its banks to borrow $440 million, which will allow it to continue its restructuring. Gitano shares, which have been heading steadily downhill since hitting $20 3:8 in February, jumped 1 3:4 Monday to $5 7:8. Gitano makes such clothing lines as Gloria Vanderbilt, plus its own jeans. FILENET DROPS ON EARNINGS NEWS: High-tech company FileNet plunged 7 1:4 to $12 1:4 Monday after the company said second-quarter earnings would be around 5 cents a share. That's down from 20 cents a share a year ago and 80% lower than the average analysts' estimate of 25 cents a share. The Costa Mesa, Calif., maker of document-imaging and retrieval systems says it believes second-quarter revenue rose 20% to $34.5 million. OTHER TECH COMPANIES DROP: FileNet isn't the only high-tech company to see its stock drop on feeble earnings news. Software maker Easel dropped 52% Thursday after announcing worse-than-expected earnings. In the same boat as Easel and FileNet are software makers Lotus, Quarterdeck and Borland; Dell Computer; and Vitesse Semiconducter. FileNet blamed higher marketing and other costs for lower earnings. TRAINEE WINS CNBC CONTEST: Broker trainee Kim Wong easily won the USA TODAY:CNBC National Investment Challenge's professional options division. Wong's imaginary options portfolio started at $500,000 April 1 and ended the second quarter up 1,125% at $6.1 million."Every time I felt the market would go up or down, I'd buy options in the Standard & Poor's 100 index," he says. STOCKS GAIN IN SLOW TRADING: Stocks gained Monday in slow, cautious trading. The Dow Jones industrial average rose 8.91 points to 3339.20. Broader indexes were mixed. Winners beat losers 1,010 to 794 on the New York Stock Exchange, where volume was 187 million shares. Stocks traded in a narrow range. Patterns puzzled traders. Bank stocks gave back gains from rate cut news. Drug stocks rose for no obvious reason. T-BILL RATES FALL: Interest rates on six-month Treasury bills fell in Monday's auction to the lowest in 29 years. The rate on three-month bills fell to a 20-year low. The Treasury Department sold $11.7 billion in six-month bills at an average discount rate of 3.32%, down from 3.66% at last week's auction. And $11.7 billion was sold in three-month bills at an average discount rate of 3.23%, down from 3.59%. BANKERS TURN TO SMALL BUSINESS: Bankers who have long ignored small companies suddenly are courting them, a new move for big banks. And the small, community banks that have always served small businesses are getting more aggressive. Many bankers burned in the 1980s by bad Third World loans say small business may be the key to future profits for an industry facing competition for big corporate loans. GOLD, SILVER UNCHANGED: On the New York Commodity Exchange Monday, gold for current delivery was unchanged from Thursday's levels at $346.50 per troy ounce. Metals markets were closed Friday for July 4th. Silver prices were flat. Silver bullion was unchanged in London at a late bid price of $4.05 a troy ounce. On the New York Comex, silver for current delivery was quoted at $4.028 per troy ounce. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Tuesday at 3339.20 after closing up 8.91 Monday. The New York Stock Exchange composite opens at 227.44, up 1.03. The American Stock Exchange market value opens at 382.58, up 0.03. The NASDAQ OTC composite opens at 563.17, down 0.18. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mixed on Tuesday. It opens at 0.5232 British pounds, up from 0.5226; 5.0915 French francs, down from 5.1020; 1.5118 German marks, down from 1.5135; and 124.25 Japanese yen, down from 124.66. (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