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, Sep 3 1992 Date: Thu, 3 Sep 92 04:19:20 EDT Message-ID: 09-03 0000 DECISIONLINE: Personal Investing USA TODAY Update Sept. 3, 1992 Source: USA TODAY:Gannett National Information Network INVESTORS IGNORE CYCLICALS: Investors are taking out their frustration over the sluggish economy on cyclical stocks. Although some cyclicals rallied Wednesday, most are still down. Cyclical stocks are those of companies that do better than average when the economic cycle turns up and worse than average in recessions. Many cyclical stocks are heavy-industry such as chemical, paper and steel makers. (For more, see special Cyclicals package below.) IBM TO ANNOUNCE PC UNIT: IBM announces Thursday it is setting up a separate operating unit to make and market personal computers. It's a bid to make its flagging PC business more competitive with other makers of low-cost PCs. Analysts think IBM is preparing to sell the PC business, and PC-industry analysts think it will be in an initial public offering. The unit will have annual revenue of about $7.5 billion. BUSH RECOMMENDS F-16 SALE: Reversing a 10-year ban, President Bush will recommend the sale to Taiwan of 150 F-16 fighter jets valued at $6 billion. Some analysts believe that by allowing contractors easier access to foreign markets, Bush may save jobs and spur the economy. They rate stocks of General Dynamics, Lockheed and Martin Marietta a buy. Other analysts think Bush is only trying to buy votes. STRONG DOLLAR COULD BOOST DOW: Stocks were steady in the morning and climbed in the afternoon Wednesday. Some insiders attribute the boost to the dollar's slight rise against the German mark. A stronger dollar would make U.S. stock investments more attractive by reducing concern that interest rates will rise. Some analysts believe a stronger dollar could boost the Dow as much as 10% this month. MONEY FUND YIELDS SLIP: The average money fund yield slipped this week from 3.03% to 3.01%, the lowest ever, according to IBC:Donoghue's Money Fund Report. Experts expect the average yeild to slip below 3% next week. Yields on certificates of deposit have dropped 0.5% or more since July. Analysts say the trend won't turn around this fall. CD and money fund yields are expected to drop 0.25% more by 1993. SHAREHOLDER SUPPORTS CHANGES: A major Jefferson-Pilot Corp. shareholder has said she strongly supports and publicly endorses proposed changes in Securities and Exchange Commission rules. Louise Parsons favors changes that would make it easier for shareholders to communicate with each other. The rule changes also would let shareholders split proxy votes between management's director nominees and alternates. GOLD, SILVER FALL: Gold and silver prices dropped Wednesday. On the Commodity Exchange, gold bullion for current delivery settled at $338.50, down $2.30. Republic National Bank quoted a price of $338.70, off $2.20. Gold fell in London to $338.85 from $342.35. On the Comex, silver for current delivery settled at $3.692, down from $3.714. In London, silver fell to $3.71 a troy ounce, from $3.75. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens at 3290.31 Thursday after closing up 24.05 Wednesday. The New York Stock Exchange composite opens at 230.01, up 0.99. The American Stock Exchange market value opens at 382.74, up 1.29. The NASDAQ OTC composite opens at 571.25, up 5.64. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Thursday. It opens at 0.5008 British pounds, up from 0.5003; 4.7520 French francs, up from 4.7435; 1.3940 German marks, up from 1.3920; and 123.15 Japanese yen, up from 122.87. (As of 3 p.m. Wednesday. Source: First American Bank of New York.) SPECIAL PACKAGE ON CYCLICALS: CYCLICALS SOMETIMES JUMP: Several times since the economy began to slump in summer 1990, cyclical stocks have jumped on hopes that the economy would soon rebound - giving those companies a big earnings lift. Most recently, cyclical stocks rallied this spring. But lately, those stocks have staggered as government reports keep showing that the economy is stuck in slow motion. DOUBTS PUMP GROWTH STOCKS: The renewed doubts about the recovery have sent investors back to growth stocks - such as tobacco, food and drug companies. Those are companies whose earnings growth holds up relatively well in a sloppy economy. A growing number of analysts say cyclicals deserve to be weak because little good economic news is likely in the next few months. CYCLICALS MAY BOOMERANG: Some analysts argue that lowly cyclical stocks are a bargain that shouldn't be ignored, because the recovery has only been delayed. They believe people will find the economy is better off than they thought and go back to cyclicals. Maybe so. But for now, investors might do well to wait until there is solid evidence the economy is coming back strongly. 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Personal Investing editor: Martin Baucom. (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