Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.invest,americast.usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Tue, Aug 25 1992 Date: Tue, 25 Aug 92 04:24:46 EDT Message-ID: 08-25 0000 DECISIONLINE: Personal Investing USA TODAY Update Aug. 25, 1992 Source: USA TODAY:Gannett National Information Network COMPUTER CHIPS WORTH INVESTMENT: Investors in makers of computer chips could benefit from the price wars in the personal computer market and a recovering economy. Influential stock analyst Elaine Garzarelli, among others, is touting the group. Orders for chips have been surprisingly strong this summer, and should get stronger. Book-to-bill ratio is 1.09, meaning orders in the short term are outpacing sales by 9%. INDUSTRY CONTINUES TO GROW: Analysts' projections of computer-chip industry revenue growth run from 15% to 25% next year. Expected growth this year: 5%. "We're in an industry upturn," says County NatWest Securities' Tony Langham. Consumers are snapping up low-cost PCs. They're also buying more software with sophisticated graphics capability. Also, reserves are low, so any new demand will boost orders. INSURANCE FALLS AFTER ANDREW: Stocks of most insurance companies slipped Monday as Hurricane Andrew tore across Florida and threatened states along the Gulf of Mexico. Some losers: Aetna, down 1 to close at $39; GEICO, down 3:8 to close at $57 1:8; St. Paul Cos., off 1 to close at $72; American International Group, off 7:8 to $93 3:8; and Travelers, off 1:2 to close at $20 5:8. SALOMON, DEAN WITTER WARN: Two major brokerages have grown worried enough about the stock market to warn clients to lighten stock holdings. Salomon Bros. Monday dropped the stock portion of its model portfolio from 58% to 50%. Dean Witter Reynolds cut its stock weighting from 55% to 50%, the third time this year Dean Witter has lowered its recommended stock holding 5%. RAIL STOCKS GET RUN OVER: Rail stocks took a beating Monday. CSX fell 1 3:4 to $60. Conrail lost 2 to $79 5:8. Burlington Northern fell 5:8 to $33 1:2. Donaldson Lufkin & Jenrette analyst Joel Price says the reason may be that expectations caught up to reality. The year started off strong for auto shipments on railroads - but auto, coal and grain shipments have weakened. FTC APPROVES MERGER: The Federal Trade Commission Monday gave early clearance for a $913 million merger between Franklin Resources Inc. and Templeton, Galbraith & Hansberger Ltd. The merger will create the largest publicly traded independent mutual fund in the United States. Companies that plan to acquire assets of $15 million or more, or at least 15%, in another company's securities must get FTC approval. NASD CENSURES EX-EMPLOYEES: The National Association of Securities Dealers Monday censured and fined four former Dillon Securities Inc. employees. Spokane, Wash.-based Dillon has since closed. The four allegedly sold unregistered securities, the NASD said. The four brokers did not admit or deny guilt. The securities: penny stocks Smarty Pants Inc. and Cancer Quest Inc. Dillon closed four months ago. TREASURY SELLS THREE-MONTHS: The Treasury Department Monday sold $11.63 billion in three-month bills at an average discount rate of 3.14%, up from 3.10% last week. It also sold $11.65 billion in six-month bills at 3.24%, up from 3.18% last week and the highest since Aug. 3. DOLLAR CONTINUES TO TUMBLE: The dollar's decline continued Monday, as it hit an all-time low against the German mark. President Bush may be partly responsible. At the Republican convention, he promised an across-the-board tax cut, shaking up overseas investors and sending the dollar down Friday. Foreign investors worry that the government can't cut the budget, making them less likely to buy U.S. bonds. FOREIGN INVESTORS SHUN DOLLARS: Foreign investors less likely to buy U.S. stocks and bonds are also less likely to want U.S. dollars. That's why concern over the economy is helping push the dollar down against foreign currency. While U.S. taxpayers may listen, the promise from Bush of tax cuts "reminds (foreign investors) that this country is still running an irresponsible fiscal policy," says economist David Jones. GOLD CLIMBS: Gold prices climbed as the dollar continued to decline in value Monday. Gold is quoted in dollars. At the New York Commodity Exchange, gold for current delivery rose $4.30 a troy ounce to $341.60. Republic National Bank of New York quoted bullion at $341.60 at 4 p.m. ET, up $4.10 from Friday. Silver on the Comex was at $3.712, down 0.3%. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Tuesday at 3228.17 after closing down 25.93 Monday. The New York Stock Exchange composite opens at 226.34, down 2.27. The American Stock Exchange market value opens at 380.90, down 3.41. The NASDAQ OTC composite opens at 555.39, down 8.31. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Tuesday. It opens at 0.5023 British pounds, down from 0.5124; 4.8225 French francs, up from 4.8605; 1.4040 German marks, down from 1.4330; and 124.79 Japanese yen, down from 125.80. (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. 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