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 Mon, Jul 27 1992 Date: Mon, 27 Jul 92 04:22:00 EDT Message-ID: 07-27 0000 DECISIONLINE: Personal Investing USA TODAY Update July 27, 1992 Source: USA TODAY:Gannett National Information Network WORLD EVENTS HAMPER MARKET: The stock market fell slightly Friday, restrained by weakness overseas and uncertainty over events in the Middle East. The Dow Jones average of 30 industrials dipped 4.33 points to 3285.71, extending its loss for the week to 45.93 points. Analysts said traders were reluctant as the White House considered what action to take in response to Iraq's defiance of U.N. weapons inspectors. BANKS SELLING MUTUAL FUNDS: Investors have lost their appetite for bank certificates of deposit these days, but they are buying mutual funds. Banks sold 12.5% of all mutual fund shares last year, up from 11.4% in 1990, according to Dalbar Financial Services. But fund sales at banks are turbocharged this year, banks and fund companies say. (For more, see special Funds package below.) IBM DENIES SPIN-OFF REPORT: A report saying IBM will spin off its personal computer business "is absolutely incorrect," says IBM spokesman Keith Lindenberg. An obscure newsletter, Acknowledge the Window Letter, issued a news release Friday saying IBM will spin off its personal-systems business into a separate corporation within three weeks. The newsletter's editor, Carole Patton, was unavailable for comment. IBM DOESN'T HAVE INFO TO SELL: Most IBM analysts trashed a report saying the computer giant will spin off its personal-systems business into a separate corporation. "It's 100% wrong," says Chicago Corp.'s Rick Martin. Martin says IBM would have a tough time selling a PC company to the public or to a group of investors anytime soon because it can't provide the right financial information to prospective buyers. MARVEL BUYING FLEER FOR $265M: Marvel Entertainment, the comic-book publisher, is buying Fleer, maker of sports trading cards and Dubble Bubble gum, for $265 million. The cash deal, unanimously approved by both companies' directors, values Fleer at $28 a share. Friday, Fleer stock rose 2 1:2 to $28. Marvel added 1 5:8 to $33 3:8. The deal will heat up competition between Marvel and sports-card giant Topps. MORTGAGE RATES DOWN AGAIN: Thirty-year fixed-rate mortgages averaged 8.08% this week, down slightly from 8.09% last week, according to a national survey by the Federal Home Loan Mortgage Corp. It was the lowest rate since July 1973 and the fourth straight decline. In mid-January, rates fell to 8.23%, rose to 9.03% by late March and have fallen in 14 of the 17 weeks since. USA TODAY OFFERS REPORTS: Investors who have missed seeing the quarterly earnings report of a major corporation can call USA TODAY on Demand. The newspaper will fax the complete earnings report to interested investors for $2 each. For a free list of companies whose earnings are available via fax, call 1-800-441-5494. GOLD, SILVER MIXED: Gold and silver rose domestically Friday but were down overseas. Gold rose 70 cents on the Commodity Exchange to $359.30. Republic National Bank said gold ended at $359.50, up $1.50. The metal fell in London and Zurich. Silver bullion fell in London to $3.96 from $3.98, but rose to $3.966 a troy ounce on the ComEx, up from $3.960. SPECIAL PACKAGE ON FUNDS: BANKS INCREASING SALES: Banks sold $1.7 billion of Putnam funds the first six months of 1992, vs. $1.8 billion in all 1991. About 35% of Putnam's fund sales comes from banks, vs. virtually none five years ago. Putnam is the USA's eighth-largest fund group. Alliance Capital, the USA's 15th-largest fund group, says banks now account for 20% of its sales, vs. 16% last year. FALLING YIELDS PROMPT SWITCH: Low interest rates are a big reason for the boom in sales. The average yield on one-year CDs is now 3.7%, down from 6.2% a year ago and 9.5% at their most recent peak in April 1989. Bank CD assets have fallen 16%, or $185 billion, the past 12 months, as bank customers have left to find higher yields. BANKS CHARGE LOADS: By selling mutual funds, banks collect a fee on the cash that goes to funds, typically by charging a sales commission, or load. Typical loads are about 4.5% of the amount invested for stock funds and slightly less for bond funds. Many funds also charge annual marketing fees of up to 1.25% of an account's assets, which pay banks commissions for years after the sale. MONEY USED FOR FUNDS REPLACED: Savers quickly replace the cash they ship to mutual funds - or bring new cash to the table. "We had expected the fund business to cannibalize our deposit base," says Dudley Nigg, chief of Wells Fargo's mutual fund sales. "In reality, we found 50% of the inflow to our funds is new money." Currently, 91% of the 300 largest commerical banks now sell funds, according to Alliance Capital. (End of package.) DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Monday at 3285.71 after closing down 4.33 points Friday. The New York Stock Exchange composite opens at 226.48, down 0.18. The American Stock Exchange market value opens at 382.53, up 0.03. The NASDAQ OTC composite opens at 565.61, up 0.37. 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. This article is copyright 1992 Gannett News Service. 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