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 Fri, Jul 24 1992 Date: Fri, 24 Jul 92 04:47:16 EDT Message-ID: 07-24 0000 DECISIONLINE: Personal Investing USA TODAY Update July 24-26, 1992 Source: USA TODAY:Gannett National Information Network DIGITAL REPORTS WORST QUARTER: Digital Equipment on Thursday reported its worst-ever quarterly earnings, losing $1.9 billion, or $14.76 a share. For the year, DEC lost $2.8 billion on nearly $14 billion in revenue. But some analysts were predicting better times ahead. $1.5 billion of its loss was a one-time restructuring charge that could lead to yearly $1 billion savings. DEC shares closed down 5:8 at $39 7:8. DELTA STOCK HOLDS ON: Brutal fare wars have hammered the USA's airlines, but the worst may be over. Even though Delta Air Lines' reported record-breaking fourth-quarter losses Thursday and a half-billion dollar loss for its fiscal year, Delta stock hung tough. Some analysts see it as a good buy. "The worst is over for the industry and for Delta," says analyst Helane Becker. The stock closed down 1:4 at $53 1:4. BUFFET ZEROES IN ON GD: Famed investor Warren Buffett has picked a hot stock in a shrinking industry. He told the Securities and Exchange Commission that he's bought 4.35 million shares, or 15%, of defense company General Dynamics. Analysts say Buffett bought the stock for around $300 million, or $70 1:2 a share, earlier this month. The stock rose 1 3:4 to close at $75 5:8 Thursday. BUFFETT HAS RULES: Warren Buffett has criteria for investing, says Buffett-watcher Michael Lamb of Wealth Monitors. He won't invest unless he thinks there's additional value in the company not reflected in the share price and there's a way for investors to receive that value. Analysts who follow General Dynamics generally agree that the stock - Buffett has bought 15% - fit the criteria. BAD NEWS MEANS LOWER RATES: After standing still for two weeks, mortgage rates are heading lower due to bad economic news. Rates follow bond yields because lenders pool loans into securities that compete with bonds. Bond yields fell Thursday on higher jobless claims news. Investors think a weak economy will hold down inflation, which erodes the value of bond interest payments. Low inflation means low yields and rates. SOME THRIFTS SHIFT RATES: The U.S. average mortgage rate, at 8.09% last week, could fall below 8% next week. California thrift Great Western Savings dropped the rate on its 30-year fixed mortgage to 8.05% from 8.20% Thursday. Points: 1 1:2. Des Moines-based lender Norwest Mortgage kept its 30-year rate at 8%, but dropped points to 1 1:2 from 2. OIL COMPANIES REPORT LOSSES: Exxon Thursday reported second-quarter net income of $955 million, including a one-time charge, compared to $1.1 billion for that period the year before. Per-share earnings were 76 cents compared to 90 cents. Texaco had second-quarter net income of $245 million vs. $269 million and per share of 85 cents, compared to 94 cents for the second quarter a year ago. M2 WEAKENS: M2, a closely watched measure of the money supply, weakened the week of July 13, falling $2.5 billion to $3.5 trillion, the Federal Reserve says. Weak growth in the money supply is considered bad for the economy. M2 is cash, checking accounts and money market mutual funds. YIELDS GOING DOWN: Yields on six-month bank certificates of deposit and money market funds - now at 3.4% and 3.2%, respectively - could easily fall to 3% or less the next few months, if not weeks, some experts say. Robert Heady sees bank money market yields, now under 3.2%, tumbling to about 2.8% in three to four weeks. That assumes further credit easing by the Federal Reserve, which Heady predicts. NIKKEI RALLY BOOSTS DOW START: Stocks rose Thursday in a wave of afternoon buying. The Dow Jones industrial average gained 12.43 points to 3290.04. Broader indexes also improved. Winners beat losers 962 to 758 on the New York Stock Exchange, where volume was 180 million shares. The market opened higher after a rally on the Japanese stock exchange. Stocks drifted lower midday but surged above opening levels late. GOLD LOWER, SILVER MIXED: Gold prices generally were lower, while silver was mixed. Gold fell on the Commodity Exchange to $358.60, off 30 cents. Republic National Bank quoted a late bid of $358, off $1. Gold traded in London at $358.75, down from $359.38. Silver traded in London at a bid price of $3.98, up from $3.97. Silver closed on the Comex at $3.960, down from $3.969. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Friday at 3290.04 after closing up 12.43 points Thursday. The New York Stock Exchange composite opens at 226.66, up 0.53. The American Stock Exchange market value opens at 382.50, down 0.67. The NASDAQ OTC composite opens at 565.24, down 1.36. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Friday. It opens at 0.5225 British pounds, down from 0.5254; 5.0080 French francs, down from 5.0180; 1.4833 German marks, down from 1.4867; and 126.67 Japanese yen, down from 126.70. (As of 3 p.m. Thursday. 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