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, Oct 13 1992 Date: Tue, 13 Oct 92 05:19:04 EDT Message-ID: 10-13 0000 DECISIONLINE: Personal Investing USA TODAY Update Oct. 13, 1992 Source: USA TODAY:Gannett National Information Network CAMPBELL BIDS FOR COOKIE MAKER: Campbell Soup made an offer Monday to buy Australian cookie and cracker maker Arnotts. Analyst Ellen Baras of Duff & Phelps in Chicago says the move is good news. "It means the company's strategies and plans are being implemented," she says. Soup accounted for 60% of Campbell's operating income in the fiscal year ended Aug. 2, but the move should spread income around. U.S. FOOD COMPANIES EXPAND: U.S. food companies, hungry for fast growth at relatively low cost, are filling their plates with inexpensive international fare. Campbell Soup's Monday offer for Australian cookie maker Arnotts is the latest in a string of buys which are seen as the quickest way to expand. Other overseas bids from Philip Morris and Heinz prove to analysts that this is an expansive trend which won't end soon. HOPE FOR RATE CUT IS RENEWED: Blue-chip stocks posted sharp gains Monday on renewed hopes for a cut in interest rates, regaining nearly all the ground lost Friday when the market fell to new lows for 1992. Relief from last week's sour mood came from Federal Reserve Chairman Alan Greenspan, who said the central bank will not refrain from cutting interest rates just because of the election. DISCOUNT CUT MAY HURT MARKET: Ned Davis research notes that the Federal Reserve has only twice this century cut the discount rate eight times without an increase and it seems likely to happen again. In 1931 it bombed the Dow Jones industrial average, while in 1982, things picked up. The difference: Foreign currency crises forced the Fed to turn around and raise rates in '31, and analysts say that may happen this year. MERCK STOCK IS UP IN THE AIR: Some analysts see continued trouble for drugmaker Merck, whose stock looks expensive when compared with its earnings. Wertheim Schroder analyst Jonathan Gelles is telling investors to buy other drug stocks, particularly Schering-Plough. Others are sticking with Merck. Ken Nover of A.G. Edwards says that "in a matter of a few months, Merck's stock will look very cheap." PEROT PERFORMANCE WON'T HURT: Ross Perot's success in Sunday's debate didn't have the expected negative implications for the stock market Monday. Logic said that a strong Perot creates uncertainty and trouble for stocks. But market analysts say that what votes Perot won probably came at the expense of President Bush. Translation: Bill Clinton was the expected winner before the debate, and he still is. INSURANCE STOCKS LOOK BETTER: A lot of analysts were leaving insurance stocks for dead in August and September after hurricanes Andrew and Iniki ravaged parts of the USA. But lately, those conclusions are looking less sound. Insured losses, as it turns out, were underestimated, maybe enough to force rate hikes. Some investors have been picking up insurance stocks at what they hope will prove to be bargain prices. MICROSOFT WILL GO EAST: Microsoft is taking its software to the former East Bloc, where businesses are still as likely to use an abacus as a personal computer. The software giant figures demand there will grow, both among local companies and Western firms setting up offices there. Microsoft plans to open offices in Moscow, Warsaw and Prague, Czechoslovakia. SPORTMART DOES POORLY: Four sporting-goods companies blazed a promising trail for Sportmart this summer. The four - Sports & Recreation, Authentic Fitness, Finish Line and Sportstown - offered shares to the public for the first time and saw their shares jump. Sportmart had no such luck. Since going public a week ago at $15 a share, the stock has never traded above $16 1:4 - it closed Monday at $14 1:4. GOLD DOWN ON ONE-SOURCE SALE: Gold prices fell heavily, apparently on a major sale from one source Monday. On the Commodity Exchange, gold bullion for current delivery fell $5.20 to $345.20. Republic National Bank said gold ended at $345.85, off $4.45. Gold fell in London to $346.05, down from $350.35. On the Comex, silver bullion settled at $3.732, down from $3.758. Silver fell in London to $3.76, down from $3.78. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens at 3174.41 Tuesday after closing up 37.83 Monday. The New York Stock Exchange composite opens at 224.28, up 2.17. The American Stock Exchange market value opens at 365.98, up 1.13. The NASDAQ OTC composite opens at 573.84, up 3.32. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Tuesday. It opens at 0.5933 British pounds, down from 0.5935; 4.9870 French francs, down from 5.0515; 1.4855 German marks, down from 1.4895; and 121.75 Japanese yen, down from 121.95. (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: 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. 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