Path: bloom-picayune.mit.edu!snorkelwacker.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 Fri, Oct 30 1992 Date: Fri, 30 Oct 92 04:42:14 EST Message-ID: 10-29 0000 DECISIONLINE: Personal Investing USA TODAY Update Oct. 29, 1992 Source: USA TODAY:Gannett National Information Network WALL STREET LIKES LITTLE GUY: Wall Street, that ever-fickle judge of corporate beauty, has decided once again that small is beautiful. Investors are abandoning such stalwarts as Philip Morris, IBM and Boeing on worries about their earnings outlook. Since June 1, the Dow Jones industrial average has retreated 4.7%, erasing most of the gains of the first five months of the year. (For more, see special Small package below.) FEDERAL DEFICIT BREAKS RECORD: The gap between federal spending and revenues reached $290.2 billion in the year ended Sept. 30, breaking the record, the government said Wednesday. The deficit surpassed by 7.7% the previous record of $269.5 billion, reached in fiscal 1991. It was the 23rd consecutive year the government failed to balance its budget and brought the accumulated national debt to $3.97 trillion. CLINTON IS REASON FOR INCREASE: Bank CD yields are on the rise after they had been falling since March 1989. The reason: "It's spelled C-L-I-N-T-O-N," says Robert Heady, Bank Rate Monitor. "Analysts think he'll spend a bundle." But yields may not rise for long. Rates are still diving "because of the sick economy," Heady says. Meanwhile, though, the average on five-year CDs shot up to 5.36% from 5.18%. FORD WARNS OF MORE LOSSES: Ford Motor reported a smaller-than-expected loss $159 million the third quarter, but warned that losses could continue. The loss came to 43 cents a share, including a $114 million tax credit, down sharply from a loss of $574 million, or $1.20 a share, a year earlier. Ford says better results will be tough because of slow growth in the U.S. economy and weakening economies in Europe. BORDEN RESTRUCTURES: Borden says it will cut as many as 3,000 jobs and close 10 plants as part of a restructuring that took a toll on third-quarter earnings. Borden lost $377 million, or $2.68 a share, including a $642 million restructuring charge, vs. income of $99 million, or 67 cents a share, a year earlier. Borden will close some North American snack and dairy operations and some European operations. DURABLE GOODS ORDERS FALL: Orders to U.S. factories for durable goods such as cars and computers fell in September for the third consecutive month, the government said Wednesday in a report taken as an ill omen for manufacturing employment. The Commerce Department said orders fell a seasonally adjusted 0.4% to $118.9 billion last month. It was the first three-straight-month drop since January-March 1991. GOLD UP, SILVER UP: Gold prices settled mostly higher. On the New York Commodity Exchange, gold bullion settled at $339.40 a troy ounce, up $2 from Tuesday. Republic National Bank quoted $338.85, up $1.60. Gold rose in London to $338.55 a troy ounce from $338.15. On New York's Comex, silver bullion settled at $3.757 a troy ounce, up from $3.739 Tuesday. In London the metal rose to $3.77 from $3.76. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens at 3251.40 Thursday after closing up 15.67 Wednesday. The New York Stock Exchange composite opens at 230.91, up 0.90. The American Stock Exchange market value opens at 379.00, up 2.35. The NASDAQ OTC composite opens at 601.39, up 4.44. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Thursday. It opens at 0.6371 British pounds, up from 0.6319; 5.2430 French francs, up from 5.2015; 1.5445 German marks, up from 1.5325; and 122.70 Japanese yen, up from 122.33. (As of 3 p.m. Wednesday. Source: First American Bank of New York.) SPECIAL PACKAGE ON SMALL: INVESTORS LIKE NASDAQ STOCKS: Investors are flocking to computer and biotechnology companies that have market value (stock price times number of shares) of $100 million or less. Many of those small-company stocks are traded on the NASDAQ market. Since Sept. 1, the NASDAQ composite index has climbed 6.3%, while the Dow has been almost flat. Traders are busy at firms that specialize in regional or high-technology stocks. WEAK FOREIGN ECONOMIES HURT DOW: This month investors have been pumping more money into mutual funds that specialize in small stocks such as the Fidelity OTC Fund. Steve Resnick, strategist at Cowen & Co. says the reasons for the shift to smaller stocks are: Weak foreign economies - Dow companies rely heavily on exports; the Clinton factor - if he wins, domestic-only companies like McCaw Cellular should benefit. SMALL STOCKS COULD REIGN: Analysts say small stocks tend to move in pronounced trends for five to seven years. They say we're still in an upward trend that started two years ago, despite a small stock sell-off earlier this year. Robert Natale, editor of Standard & Poor's Emerging & Special Situations newsletter says small growth stocks could have double-digit gains the next 18 months if Clinton wins. (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. 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