Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.invest From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: invest Wed, Feb 26 1992 Date: Wed, 26 Feb 92 06:30:01 EST Message-ID: DECISIONLINE: Personal Investing USA TODAY Update Feb. 26, 1992 Source: USA TODAY:Gannett National Information Network LACK OF CONFIDENCE HURTS STOCKS: Stocks fell Tuesday on news that the consumer-confidence index reached its lowest point since 1974. The Dow Jones industrial average fell 24.59 points Tuesday to 3257.83. Other indexes also fell. Decliners beat advancers 1,082 to 644 on the New York Stock Exchange. The Conference Board's index of consumer confidence dropped to 46.3 in February, down 4 points from 50.2 in January. INVESTORS JUMPING ON T-BILLS: Sharply higher rates on T-bills and notes are prompting investors to snap up the Treasury securities. The Treasury sold $14.3 billion in two-year notes Tuesday - the largest auction ever for those securities - at an annual yield of 5.4%. That far outpaces the current 4.76% average yield on two-year bank certificates of deposit, according to Bank Rate Monitor. (For more, see special Rates package below.) SMITHKLINE SHARES RISE: SmithKline Beecham shares, down 6% this year after rising 42% last year, added 1:8 to $81 1:8 Tuesday after the company reported slightly above average earnings. The drug giant's stock is traded in the USA as American depository receipts. SmithKline looks tantalizing: Two new drugs, a 17% jump in annual earnings and a proposed two-for-one stock split. Some see gold in the new drugs. DILLER'S EXIT HURTS NEWS CORP. Shares of News Corp. Ltd., parent of Fox Inc., fell 1 to $25 Tuesday on the New York Stock Exchange on the surprise exit of Barry Diller as chairman of the TV and movie company. Diller has been at Fox since 1985. He developed Fox as a fourth TV network, leading to hits such as "The Simpsons" and "Beverly Hills, 90210." Industry experts say that Fox without Diller lacks luster. CBS GAINS 4 POINTS: Barry Diller's departure from Fox Inc. set off a round of speculation that he would try to cobble a group to buy another TV network, most likely General Electric's NBC or CBS Inc. CBS, trading in the low $140s two weeks ago, rose 4 to $167 1:2. The rise was prompted by CBS' announcement that the network broke even on the Winter Olympics. RETAILERS REPORT EARNINGS: Retailers moved on earnings announcements Tuesday. May climbed 2 3:8 to $58 5:8 after announcing fourth-quarter earnings per share of $2.01, vs. $1.91 a year earlier. Dillard rose 2 1:8 to $132 3:4 after posting fourth-quarter earnings per share of $2.50, vs. $2.49 a year ago. Nordstrom fell 1 to $39 after posting fourth-quarter earnings per share late Monday of 50 cents, vs. 57 cents. PLATINUM WORRIES HURT PRICES: Platinum prices dropped sharply Tuesday on news Corning Inc. is developing a catalytic converter that traders thought would reduce demand. Prices recovered somewhat after traders realized the new converter would not affect the metal. Platinum closed $5 lower at $353.40 an ounce after being down nearly $7.50. Catalytic converters account for 40% of the world's annual platinum use. GOLD DOWN IN USA: Gold prices rose overseas but declined when trading shifted to U.S. markets. On the New York Commodity Exchange, gold bullion for current delivery settled at $349.40 a troy ounce, off 40 cents. Republic National Bank said gold fell 25 cents an ounce to a late bid price of $349.50. Gold rose in London and Zurich. On the Comex, silver bullion settled at $4.065 a troy ounce, down from $4.090. SPECIAL PACKAGE ON RATES: GAP GETTING BIGGER: The gap between the two securities is big and getting bigger. One month ago, the two-year T-note yield at auction was 4.99%, vs. 4.78% for the average two-year CD - a 0.21-percentage-point difference then, vs. 0.64 now. Five-year T-notes will be auctioned Wednesday (minimum: $5,000). Existing five-year notes were yielding 6.79% Tuesday, vs. 5.87% for the average five-year CD. SECURITIES PAY BONUS: And Treasury securities pay a bonus. Their interest is exempt from state and local taxes. For someone paying state tax of 8%, the 6.79% yield on five-year T-notes is the same as 7.4% on a fully taxable investment. Evidence that the economy may be recovering has been pushing up rates. Banks are keeping CD rates low because they don't want to attract money until loan demand improves. SHORT-TERM RATES GOOD TOO: Investors who think rates are going to continue rising, should consider three-month or six-month T-bills, which are auctioned every Monday. The Treasury will automatically roll over an investor's T-bills into new securities for up to two years. The yield Tuesday on three-month bills was 4.07%; for six-month bills, 4.24%. Both pay more than the 3.89% average on a six-month CD. CHEAPER TO BUY FROM GOVERNMENT: Individuals can buy Treasuries directly from the government for free or through a broker. Typical charge: $50. If you buy on the secondary market, where they are sold after auction, you must use a broker. To buy direct, check the government section of your phone book for the Federal Reserve bank or branch nearest you. (End of package.) DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Wednesday at 3257.83, after closing down 24.59 Tuesday. The New York Stock Exchange composite opens at 226.68, down 0.94. The American Stock Exchange market value opens at 409.78, down 2.02. The NASDAQ OTC composite opens at 621.40, down 3.53. DOLLAR OPENS MOSTLY UP: The dollar opens mixed on foreign markets Wednesday. It opens at 0.5742 British pounds, up from 0.5727; 5.6178 French francs, down from 5.6235; 129.82 Japanese yen, up from 129.25; and 1.6565 German marks, up from 1.6530. (As of 3 p.m. Tuesday. 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: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. 08:0002260000D0226 REAL- R N Asians-move-into-U.S.-market.......... A D0226 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