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 Wed, Aug 12 1992 Date: Wed, 12 Aug 92 04:31:16 EDT Message-ID: 08-12 0000 DECISIONLINE: Personal Investing USA TODAY Update Aug. 12, 1992 Source: USA TODAY:Gannett National Information Network GAP MOVE UPSETS INVESTORS: Gap is making a grab for market share by cutting denim prices. Shoppers may celebrate, but Wall Street isn't happy. Several analysts cut earnings estimates on the specialty retailer. Gap shares sank 3 3:8 to close at $32 3:8 Tuesday. News of the Gap's lower prices leaked out during the weekend. Jeans already in stores were marked down from $36 to $28 a pair. COMMODITIES PLUNGE: A plunge in commodities prices may have eased any remaining concerns that inflation is about to rise. The Commodity Research Bureau's index of 21 commodities futures fell 1.88 points to 199.84 Tuesday. It was the third straight day that the CRB index closed at a six-year low - another sign the economy remains sluggish. Bulging supplies and thin demand are driving prices down. HONG KONG MARKET COOLS: The Hong Kong stock market, the hottest of the major foreign markets this year, has been cooling. In the months ahead, it may see pressure from Bill Clinton. The Democratic presidential candidate's policy on China likely will emphasize human rights and may mean the loss of its most-favored-nation status. WAL-MART, PENNEY'S THRIVE: Despite a tough retailing climate, Wal-Mart Stores and J.C. Penney reported strong second-quarter profits Tuesday. But Limited continued to struggle, and Chairman Leslie Wexner blames poor merchandising decisions for flat earnings. Wal-Mart reported record net income of $420.4 million. Penney's stock fell 2 1:8 to $70 1:4. Limited net income was $80.1 million vs. $79.2 million last year. WABASH STOCK RECOMMENDED: Rothschild Inc. recommends buying stock in Wabash National, which makes truck trailers. Wabash stock soared after it first sold stock to the public in November, but recently has fallen back to its offering price because of worries about the economy and a drop in the company's earnings. That weakness is a buying opportunity because business will improve, Rothschild says. DOLLAR STILL WOBBLY: Despite a move early in the day to prop up the U.S. dollar, it ended lower against the German mark in trading Tuesday. The dollar ended at $1.466 marks vs. $1.474 marks Monday, not far from its record low of $1.443 marks in February last year. Early Tuesday, the Federal Reserve and central banks from more than a dozen other countries intervened in trading, buying dollars for marks. SENATE MAY OK TAX BILL: The Senate is considering passage of a tax bill drafted last week by its tax-writing committee. In the bill are sweeping changes that would affect savers and investors if it becomes law. Upper-middle-income people stand to win, says economic expert Tom Ochsenschlager. The bill also would set aside $5.5 billion as tax incentives for businesses to create jobs. IRAS COULD GET A BOOST: The Senate Finance Committee's tax bill being considered in the full Senate would mean that contributions to individual retirement accounts would become fully deductible regardless of the income of the investor. The House passes a version of the tax bill in July that did not include provisions to make individual retirement accounts, or IRAs, fully deductible. NIKKEI SLIDE PROMPTS YAWNS: When the U.S. stock market crashed in 1987, the word heard around the world was "sell," as the Dow dropped 23% in one day. But the 36% plunge of Japan's Nikkei average this year has barely created whispers in world financial capitals. The Nikkei has long been a bubble waiting to burst. FOREIGN MUTUALS DROP: The mutual fund industry has launched a flotilla of funds that specialize in fledgling overseas stock markets, just in time for those markets to sink. Eight funds that invest in small foreign stock markets - known as emerging markets - have started this year, vs. just one last year. Nearly all have lost money for investors, which isnot always unusual in the fund industry, say experts. THEY COME ON QUICKLY: Emerging markets funds have started appearing rapidly. Six of eight new funds launched this year have been launched since June. More are in the wings, awaiting regulators' approval: Columbia Fund, First Cuba Fund, Cuba Fund, Greece Fund, and Pakistan Fund. Most of the new funds are closed-end funds, which trade on stock exchanges like stocks. T-NOTE YIELDS FALL: Yields on three-year Treasury notes fell in Tuesday's auction to the lowest since regular auctions of three-year notes began in 1978. The average yield was 4.69% vs. 5.96% at the last auction, May 5. The Treasury sold $15 billion in notes in the first leg of the quarterly auction, used to help finance the government's $3.9 trillion debt. STOCKS EDGE DOWNWARD: Stocks edged down Tuesday as foreign markets tumbled. The Dow Jones industrial average fell 6.48 points to 3331.10. Broader indexes also dropped. Losers outnumbered winners 941 to 796 on the New York Stock Exchange, where volume was 174 million shares. Stocks fell in the morning on news of a dismal trading day in Tokyo. The key 225-share Nikkei average sank below 15,000. GOLD, SILVER FALL TUESDAY: Precious-metals prices fell Tuesday. Republic National Bank said gold ended at $347.60, off $2.40, and the metal dropped $3.10 to $347.30 on the Commodity Exchange. Gold fell in London to $348.95 from $350.50. Silver fell 7 cents to $3.885 on the Commodity Exchange. In London, silver fell to $3.95 from $3.96. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Wednesday at 3331.10 after closing down 6.48 points Tuesday. The New York Stock Exchange composite opens at 230.61, down 0.25. The American Stock Exchange market value opens at 388.08, down 0.33. The NASDAQ OTC composite opens at 571.60, down 1.54. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Wednesday. It opens at 0.5196 British pounds, up from 0.5186; 4.9700 French francs, up from 4.9590; 1.4675 German marks, up from 1.4659; and 128.05 Japanese yen, up from 127.95. (As of 3 p.m. Tuesday. 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. 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