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 14 1992 Date: Tue, 14 Jul 92 05:08:58 EDT Message-ID: 07-14 0000 DECISIONLINE: Personal Investing USA TODAY Update July 14, 1992 Source: USA TODAY:Gannett National Information Network INVESTORS RETURN TO MORGAN: Wall Street is rediscovering J.P. Morgan. Most of the year, investors shunned the firm. Shares skidded 18% in the first half of the year as shares in Citicorp and other troubled bank companies soared. Investors believed a recovery would help them overcome loan problems. But on June 25, analyst Thomas Hanley called Morgan, then at $54 1:8, a "long-awaited buying opportunity." RATE CUTS HELP STOCK: J.P. Morgan shares were shunned in the first half and the stock dropped. But thanks in part to a boost from the Fed's latest rate cuts, stock has rebounded to $61 1:2. Analyst Thomas Hanley thinks they're headed to $73. Investors concerned by the weak recovery are turning to solid companies that benefit from low interest rates, such as J.P. Morgan. Low rates let Morgan raise money cheaply. SPARTAN RUNS OFF THE TRACK: Spartan Motors stock threw a rod Monday, falling 6 7:8 to $13 5:8. Investors slammed the brakes on the company when it warned that its second-quarter earnings would be below the 30 cents a share expected by Wall Street analysts. Its stock was one of the hottest on the NASDAQ last year, zooming 660%. Part of the problem: The RV industry "as a whole remains weak," says one analyst. REGIONAL PHONE COMPANIES STRONG: Regional telephone companies are about to report their best quarterly earnings in years. Analysts say second-quarter earnings are going to show telephone companies have gotten past rate cuts and layoffs and now will have earnings back on track. Analyst Stephanie Georges expects regional phone companies to build on earnings increases of 4% to 5% in the first quarter. FANNIE MAE EARNINGS CLIMB: Earnings for the Federal National Mortgage Association, one of the USA's largest investors in home mortgages, jumped 21% the second quarter. Net income climbed to $402 million, or $1.47 a share, from $332 million, or $1.21 a share, a year earlier. CEO James Johnson attributed the strong performance to $67 billion in portfolio purchases and issues of mortgage-backed securities. BANKS SHOW EARNINGS GROWTH: Top banks had good second quarters, say reports Monday. Barnett had net income of $54.1 million vs. $29.2 million, up 85%; per share 67 cents, vs. 42 cents (+60%). Chase Manhattan, net income of $152 million, vs. $132 million (+15%); per share 83 cents, vs. 80 cents (+4%). First Chicago, net income of $68.2 million, vs. $57.3 million (+19%); per share 79 cents, vs. 73 cents (8%). SAVERS GET IMPATIENT: A few frustrated savers are pulling their money out of bank accounts and money market funds to spend the cash rather than watch their income dwindle as interest rates fall. They're getting tired of trying to save as the Federal Reserve has shoved short-term interest rates down in the hopes of boosting borrowing and then spending. But as loan rates fall, so do the rates savers earns. MOST ARE HANGING IN THERE: Even if it barely pays to save, most people still say they'd rather hold on to their cash than spend it. That's a major reason consumer spending, although still growing, remains weak. But the rates that savers are earning are increasingly weak. Money market mutual funds now pay an average 3.35%, down from 5.5% a year ago and 9.2% in May 1989. T-BILL RATES FALL: Interest rates on six-month Treasury securities and three-month bills fell in Monday's auction. The Treasury Department sold $11.7 billion in six-month bills at an average discount rate of 3.31%, down from 3.32% last week. Another $11.6 billion was sold in three-month bills at an average discount rate of 3.22%, down from 3.23% last week and the lowest rate since July 8, 1963. STOCKS RISE, BUT TRADING WEAK: Stocks rose slightly Monday as several big stocks failed to hold early gains. The Dow Jones industrial average gained 6.75 points to 3337.31. Broader indexes also rose. Winners beat losers 997 to 738 on the New York Stock Exchange, where volume was light at 149 million shares. Trading was lackluster all day. Earnings reports and other news boosted some prominent stocks for a short period. GOLD MIXED, SILVER DOWN: Gold was mixed and silver fell Monday. Gold bullion for current delivery on the New York Commodity Exchange was quoted at $349.10 a troy ounce, up 80 cents. Republic National Bank of New York quoted the metal at $348.70, up 70 cents. In Zurich it fell to $348.40 from $348.50. Silver bullion fell in London to $3.93 from $3.94. On the Comex, silver for current delivery was at $3.919, down a penny. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Tuesday at 3337.31 after closing up 6.75 Monday. The New York Stock Exchange composite opens at 228.04, up 0.16. The American Stock Exchange market value opens at 383.14, up 0.82. The NASDAQ OTC composite opens at 570.22, up 2.42. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Tuesday. It opens at 0.5187 British pounds, down from 0.5204; 4.9890 French francs, down from 5.0700; 1.4770 German marks, down from 1.4943; and 124.89 Japanese yen, down from 125.24. (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 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. For more information, send-email to usa@AmeriCast.COM