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 Thu, Aug 27 1992 Date: Thu, 27 Aug 92 05:59:07 EDT Message-ID: 08-27 0000 DECISIONLINE: Personal Investing USA TODAY Update Aug. 27, 1992 Source: USA TODAY:Gannett National Information Network INVESTORS TURN TO ARM FUNDS: Yield-hungry investors are flocking to adjustable-rate mortgage funds. During the first six months of this year, they poured $5.2 billion into ARM funds, which invest primarily in securities backed by adjustable-rate home mortgages. That boosted the funds' assets to more than $18.7 billion last month. Fund companies have created 28 ARM funds this year to capitalize on the demand. ARMS HAVE BETTER YIELDS: One reason investors are descending on adjustable-rate mortgage funds: an average yield of 5.4%. The rate on one-year certificate of deposits is 3.6%; money-market funds offer 3.1%. There is a drawback, though: ARMs carry more risks. Certificates of deposit and money-market funds are safe investments that preserve principal. ARMs are more volatile. NOVELL CLIMBS; ADOBE IS HIT: Analysts' insights boosted and pummeled two technology stocks in Wednesday trading. Novell shares jumped 3 7:8 to $49 1:2 after its third-quarter earnings slightly exceeded analysts' expectations and Lehman Bros. upgraded its rating to buy. Adobe Systems fell 3 3:4 to $32 1:8 after Morgan Stanley lowered earnings projections and its rating to hold. NOVELL HOLDS ITS OWN: Novell has been strong despite a weak economy and plenty of competition, analysts say. After markets closed Tuesday, the company said third-quarter earnings jumped almost 50% to 43 cents a share, vs. 29 cents a year earlier. Lehman Bros. analyst David Readerman raised his earnings expectations for the company this fiscal year 9 cents a share, to $1.65. A GERMAN DEAL COULD SAVE USA: International bargaining could rescue the dollar and spark a stock rally, according to strategist Tracy Herrick. He said Wednesday policymakers can't raise interest rates, because it would likely trigger a triple-dip recession. But the USA could ask Germany to let the mark fall. "They owe us for the Gulf war," he said. In return: Let Germany protect its agricultural markets. ANDREW COULD HURT GDP: Hurricane Andrew could trim up to half a percentage point from already weak gross domestic growth this quarter, economists say. That could be bad news for President Bush's re-election effort. The economy is the dominant issue this year, and the first report on third-quarter GDP - output of goods and services - will be released Oct. 27. That's one week before the Nov. 3 election. UTILITY TO SELL MORTGAGE BONDS: Metropolitan Edison Co. filed Wednesday with the Securities and Exchange Commission to sell up to $300 million of first mortgage bonds. Metropolitan Ed, a unit of General Public Utilities Corp., will use the proceeds for construction and other purposes. UGI didn't name any underwriters in the registration statement. UGI owns two other electric utilities in addition to Metropolotan Ed. INVEST IN GERMANY: Investors who send their money to Germany could clean up. Three-month German government bills yield 10.1% and one-year government bills yield 9.9%. Ways to cash in: Buy a mutual fund that invests in German bonds or short-term money market instruments. Call 1-800-544-8888. Buy certificates of deposit denominated in foreign currencies. Citibank offers CDs. Call 1-800-248-4669. EVERYONE'S OFF GUARD: Stocks gained Wednesday as the dollar halted its recent slide. The Dow Jones industrial average gained 14.59 points to 3246.81. Broader indexes also rose. Winners beat losers 1,013 to 732 on the New York Stock Exchange, where volume was moderate at 172 million shares. The gains in stocks caught some traders off guard because of concerns about the economy and the presidential election. GOLD, SILVER DOWN: Gold prices fell worldwide Wednesday. On the New York Commodity Exchange, gold bullion for current delivery settled at $338.30 a troy ounce, down from $340.60 on Tuesday. Republic National Bank said gold fell to a late bid price of $338.15 a troy ounce, off $2.35. On New York's Comex, silver bullion for current delivery settled at $3.669 a troy ounce, down from $3.70 Tuesday. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Thursday at 3246.81 after closing up 14.59 Wednesday. The New York Stock Exchange composite opens at 277.48, up 1.01. The American Stock Exchange market value opens at 379.65, up 0.13. The NASDAQ OTC composite opens at 558.80, up 4.58. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Thursday. It opens at 0.5033 British pounds, up from 0.5025; 4.7890 French francs, up from 4.7725; 1.4053 German marks, up from 1.3988; and 124.75 Japanese yen, up from 124.66. (As of 3 p.m. Tuesday. Source: First American Bank of New York.) 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