Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Mon, Feb 17 1992 Date: Mon, 17 Feb 92 06:46:35 EST Message-ID: DECISIONLINE: Personal Investing USA TODAY Update Feb. 17, 1992 Source: USA TODAY:Gannett National Information Network BIOTECH STOCKS ON THE DECLINE: Last year's big run-up in biotechnology stocks has ended. An index of 36 leading biotech firms tracked by Swiss Bank Corp. is down 10% this year - after racking up a 111% gain last year. Most of the losses have come since mid-January. Investors are selling last year's big winners, such as biotechs and drugs, and buying stocks likely to get a boost from a resurgent economy. (For more, see special Biotech package below.) PRIMARY COULD AFFECT MARKET: Stock players are advised to keep an eye on Tuesday's New Hampshire primaries. Some experts say that the market could get beaten up if President Bush turns in a poor showing against Republican challenger Pat Buchanan. Buchanan raking in 35% to 40% or more of the vote would represent a poor showing for Bush. At present, most pros figure he'll get 20% to 25% of the vote. PENALTY RATES NOT BAD: Considering how far yields on certificates of deposit have fallen, the penalty rates on U.S. Savings Bonds may not look so bad. The penalty rates are the yield paid on Series EE Savings Bonds held for fewer than five years. After six months - the shortest period of time a Savings Bond must be held - the Series EE Bond's yield is 4.16%, vs. 3.9% on average for a six-month CD. INTEREST IS TAX-EXEMPT: If Savings Bonds are held for fewer than five years, savers get a fixed rate that rises over time. If they're held for five years or more, savers get the average of the variable market-based Savings Bond rate in effect during the time the bond was owned. The current variable rate is 6.38%. The minimum guaranteed rate is 6%. The average five-year CD's yield is 5.85%. Interest is tax free. ADVISOR NERVOUS ABOUT MARKET: Peter Anderson, president of Minneapolis-based IDS Advisors (assets: $9.5 billion), recently hiked his cash reserves from 1% to 12%. "I'm extremely uneasy," he says. "I can see a 10% to 15% drop in the market over the next few months." He cites continued weak consumer spending; disappointing earnings; new stock supply coming to market the next two months and a rise in long-term rates. STOCKS LITTLE CHANGED: Auto stocks rolled up strong gains Friday, but the rest of the market drifted in the grip of interest-rate worries. The Dow Jones average of 30 industrials slipped .68 to 3,245.97, finishing the week with a net gain of 20.57 points. The Big Three car makers' stocks rose for a second straight session. General Motors rose 1 3:8 to $38; Chrysler 1 1:4 to $16 3:8, and Ford 1 7:8 to 37 1:8. CONSUMER CONFIDENCE GAINS: Consumer confidence inched up in early February but still remained at recessionary levels, according to a widely respected report by the University of Michigan. The university's index of consumer confidence rose to 68.1 the first 10 days of February from 67.5 in January. The index had risen to 83 in September but has been in the mid-60s since November. GOLD, SILVER DOWN: Gold dropped $2.20 on the Commodity Exchange Friday, closing at $353.70. Republic National Bank later quoted a bid of $353.25, off $2.10. The metal also fell in London and Zurich. Silver lost 4.5 cents on the Commodity Exchange, closing at $4.152 a troy ounce. Silver also fell in London. SPECIAL PACKAGE ON BIOTECH: POINT OR MORE LOSSES RECORDED: The rotation out of last year's highfliers has been going on for several weeks. Friday brought more of the same: Once highflying Centocor dipped 2 3:8 to $46. Its 52-week high: $60 1:4. Cytogen, Regeneron and Alteon all fell more than a point. Biotech bellwether Amgen, despite record revenue last year, also fell Friday and is down 14% this year. Last year, it gained 267%. SOME WILL DELIVER BIG GAINS: "The big question is whether we're looking at a short-term dip or whether this lasts for all of 1992 and longer," says Neil Sweig of Brenner Securities. Most experts say to forget about a repeat of 1991. But analysts also say the scientific revolution the industry is leading is real and some stocks will deliver big gains. "There are home runs out there," says Larry Bloom of Soundview Financial. GO WITH THE LEAST-SPECULATIVE: That means it'll be tough for individual investors to find gems. The best strategy might be to stick to the least-speculative biotech stocks - those that have moved beyond research and have or soon will have products on the market. "They'll be more stable than the others," says Michael Gordon, manager of the $1 billion Fidelity Select Biotechnology fund, down 5% this year. (End of package.) DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Monday at 3245.97 after closing down 0.68 Friday. The New York Stock Exchange composite opens at 228.16, down 0.57. The American Stock Exchange market value opens at 414.27, down 1.00. The NASDAQ OTC composite opens at 636.43, down 2.67. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing Editor: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. 08:0002170000D0217 REAL-R N Development-capital-available......... A D0217 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