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 Mon, Oct 5 1992 Date: Mon, 5 Oct 92 04:46:08 EDT Message-ID: 10-05 0000 DECISIONLINE: Personal Investing USA TODAY Update Oct. 5, 1992 Source: USA TODAY:Gannett National Information Network STOCK MARKET STILL LOOKS UGLY: Worries that this could be another messy October for the stock market may be warranted. The Dow Jones industrial average has fallen 71 points (2.2%) in two days, including a drop of almost 54 points Friday. The Dow is close to breaking below 3181, its lowest close in 1992 after an early-year rally. Many investors say they'll become sellers below 3181. HISTORICALLY BAD MONTH: Octobers have been bad for stocks. The 1989, 1987 and 1929 crashes started in October. Problems hurting stocks are here to stay. A further drop in interest rates, the fuel for stock rallies so far this year, looks unlikely. Also: Corporate earnings for the three months ended Wednesday could be weaker than investors expected a month ago. A FEW MUTUAL FUNDS HOT: The stock market was lukewarm the third quarter, but some stock mutual funds delivered strong returns. Including reinvested dividends and price gains, the average general stock fund rose 2.8%. The Standard & Poor's 500 index gained 3.2% including dividends. Funds that invested in stocks of small, growing companies fared best of all general stock funds. HIGH TECH LOOKS GOOD: Managers of the hottest small-company funds say the biggest boost in the mutual fund returns came from stocks in the high-technology sector, ranging from computer-chip manufacturers to computer retailers. High-tech stocks, slammed the first half of 1992, were cheap the third quarter, says David Alger of Alger Small Capitalization Fund. EC CRISIS HURTS GLOBAL FUNDS: Stock funds that invest overseas had a tough third quarter. Slowing economies around the globe continued to play havoc with stocks. International funds fell an average 4.6% last quarter. In the second quarter, the declining value of the dollar helped cushion the stocks' decline, because the fund holdings could buy more dollars when translated back into dollars. FINANCIAL-SERVICES FUNDS FALTER: Proving that nothing soars forever, financial-services funds turned in an unimpressive performance in the third quarter. The average fund specializing in bank, brokerage and other financial-industry stocks rose 3.2%, outdoing stock funds' overall average of 2.8%. But their performance was a shadow of what investors had come to expect during a two-year run-up. HEALTH STOCK FUNDS ARE SICK: Funds that invest in health-care and biotechnology companies were dogs the first half of 1992, and the trend continued last quarter. In July, August and September, the 14 funds that invest in those industries fell an average 1.3%, compared with a gain of 2.8% for all stock funds. For the year, they're down an average 17.5%, compared with essentially no change for all stock funds. HOUSE PASSES REGULATORY BILL: The House Saturday passed a compromise bill to regulate government-sponsored enterprises Freddie Mac and Fannie Mae. Both organizations buy residential mortgages from banks, thrifts and other originators, adding to the amount of money that institutions can lend to homebuyers. The House bill sets capital standards and establishes an independent regulator. INSURANCE RULES REVISED: A top official of the Securities and Exchange Commission said Friday that the SEC is requiring insurance companies to revise the methods they use to value their investments in debt securities. That policy already is applied to several leading banks. The SEC hopes the requirement will give investors a clearer picture of how healthy an insurer is. TREASURY BONDS, BILLS RISE: The Dow Jones industrial average shed 53.76 points to 3200.61 Friday, ending the week down 46.71. The yield on 30-year Treasury bonds rose to 7.33% from 7.32%. The discount rate on three-month T-bills rose to 2.62% from 2.59%. The dollar was mostly lower against other currencies. On the N.Y. Merc.: Platinum fell $1.70 to $366.70 an ounce. Light sweet crude oil rose 9 cents to $21.92 a barrel. GOLD AND SILVER MIXED: On the Commodity Exchange Friday, gold bullion for current delivery rose 60 cents to $348.10. Republic National Bank quoted a price of $348.25, up $0.15. Gold fell in London to $348.15, down from $348.45. Silver rose on the Comex to $3.734, up from $3.714. Silver fell in London to $3.74, down from $3.75. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3200.61 Monday after closing down 53.76 Friday. The New York Stock Exchange composite opens at 225.81, down 2.92. The American Stock Exchange market value opens at 371.24, down 2.92. The NASDAQ OTC composite opens at 571.63, down 6.70. 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. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM