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 Wed, Oct 14 1992 Date: Wed, 14 Oct 92 04:48:25 EDT Message-ID: 10-14 0000 DECISIONLINE: Personal Investing USA TODAY Update Oct. 14, 1992 Source: USA TODAY:Gannett National Information Network FIRMS REPORT HEALTHY EARNINGS: A long list of companies reported healthy earnings gains Tuesday. It was uplifting for analysts, many of whom had been chopping earnings estimates. Among those posting encouraging results were such closely watched companies as Microsoft, Rubbermaid, PepsiCo and Merril Lynch. The results boosted each of those stocks and helped push prices higher across-the-board. (For more, see special Earnings package below.) DEMAND FOR ISSUES TO PICK UP: Treasury Secretary Nicholas Brady said Tuesday that foreign demand for U.S. Treasury issues will pick up even with higher interest rates overseas. Brady told reporters after an industry gathering that worsening economic conditions in other countries would persuade foreign investors to put their money "in the United States as a safe haven." PRESSURE BUILDS OVER GM: Pressure is intense at foundering General Motors. Its market share continues to slide. Union locals bring GM to heel with strikes and strike threats. The cash-cow European market is running dry. Suppliers scream abuse as GM demands that they cut already-slim profit margins. And insiders say GM's outside directors - who thought the ills were cured - have found how bad off the giant is. SOME THINK GM WILL BOUNCE BACK: Most analysts think General Motors has big problems: In-fighting, strikes and high cost among them. But GM anxiety isn't universal. Analyst John Casesa of Wertheim Schroder says the institutional investors he counsels have confidence in President Jack Smith and CEO Robert Stempel. Casesa thinks the two will not bail out on GM's attempted reorganization during tough times. N.C. BANKS ARE BIG GUNS: Charlotte, N.C., is home to NationsBank and First Union, the No. 4 and soon-to-be No. 9 banks in the USA. And just 80 miles away, in Winston-Salem, is another national banking power: Wachovia, one of the nation's most conservative, and respected, bank companies - now 21st largest in the country. North Carolina's liberal banking laws have propelled the stunning growth of these three banks. DRUG STOCKS GET RECOMMENDATION: Drug stocks have been slipping as drug companies have come under pressure to slow price hikes. But Kidder Peabody's Steve Buell is betting that the slide is over for two drug companies. Tuesday, he recommended Merck and Pfizer. Both are known for a steady pipeline of new products and reliable earnings growth. Buell's estimate: 20% to 25% '93 growth for Pfizer, 10% to 12% growth a year for Merck. GOLD CONTINUES TO FALL: Gold prices fell Tuesday after a steep plunge the previous session. On New York's Commodity Exchange, gold bullion fell $1.20 to settle at $344.00 a troy ounce. Republic National Bank of New York reported $343.80, off $2.05. On New York's Comex, it settled at $3.695 a troy ounce, down 3.7 cents from $3.732 Monday. Silver bullion fell in London to a late bid price of $3.72 from $3.76. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens at 3201.42 Wednesday after closing up 27.01 Tuesday. The New York Stock Exchange composite opens at 225.31, up 1.03. The American Stock Exchange market value opens at 366.83, up 0.85. The NASDAQ OTC composite opens at 576.44, up 2.60. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Wednesday. It opens at 0.5824 British pounds, down from 0.5933; 4.9785 French francs, down from 4.9870; 1.4650 German marks, down from 1.4855; and 121.25 Japanese yen, down from 121.75. (As of 3 p.m. Tuesday. Source: First American Bank of New York.) SPECIAL PACKAGE ON EARNINGS: EARNINGS REPORTS ARE STRONG: Tuesday's strong earnings gains come at the front end of a flood of third-quarter reports due this month. Typically, companies that have good results report first. So the enthusiastic response might seem overdone. But analysts last month cut earnings estimates at nearly twice the normal pace, because of companies in early trouble. That spate of gloom is what was overdone, some now say. MARKET MAY BE LOOKING UP: So the market may be set up for more pleasant surprises as results come in. "American industry has turned the corner in terms of being able to knock out a profit even when times aren't the best," says Steven Resnick, analyst at Cowen. He predicts that the trend toward positive surprises will continue through the month. THERE WILL BE SOME DISRUPTIONS: Analysts are sure there will be disruptions in the big earnings gains companies are reporting. Indeed, furniture company Kimball warned Tuesday of disappointing results. But Resnick expects the quarter to play out much like the first and second quarters, when 1991's vicious cost cutting first began showing up in higher corporate earnings. (End of package.) 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