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 Thu, Nov 5 1992 Date: Thu, 5 Nov 92 05:22:46 EST Message-ID: 11-05 0000 DECISIONLINE: Personal Investing USA TODAY Update Nov. 5, 1992 Source: USA TODAY:Gannett National Information Network WALL ST. POUNDS COMPANIES: Wall Street welcomed President-elect Clinton Wednesday with a pounding of big-company stocks. The Dow Jones industrial average fell 29.44 points to 3223.04. Clinton's victory Tuesday was widely anticipated. Analysts say the drop Wednesday was an example of the Wall Street axiom to buy on the rumor and sell on the news. "There was a minor ripple effect," says Edwin Walczak of Vontobel USA. RIPPLES FROM ELECTION ARE FELT: The ripples from Clinton's election were big in some areas. Drug and health-care stocks stumbled on renewed fears that Clinton will reform health care at the expense of drug and medical-products companies. The American Stock Exchange's drug stock index fell 5 points to 197. Small-company stocks, expected to benefit from Clinton's planned programs, bucked the falling trend. ANNUITIES ARE TOP SELLERS: One of the best-selling investments at banks these days isn't a certificate of deposit. It's an insurance company annuities. Banks are seeing an explosion in sales of fixed-rate annuities. They'll sell $12 billion in annuities this year, up a third from $9 billion last year. Annuities currently pay an average 5.63% for one year, the newsletter says. The average rate on a one-year CD is 3.28%. WALL STREET AWAITS CLINTON: Wall Street awaits Bill Clinton's presidency, but some already have their own ideas about what will happen. Richard Hoey, economist at Dreyfus, thinks Clinton's first crisis has just begun with Wednesday's breakdown in U.S.-Europe trade talks. Analysts Bernadette Murphy and Sheila Baird think Clinton will prompt a shift from growth stocks to industrial stocks. MUTUAL FUND RECORDS GET A BOOST: Mutual fund investors are wise to examine long-term performance of a fund before investing. Now fund companies may be more eager to supply records. This month, the October 1987 stock crash drops off the five-year rankings and should help a lot of records. Example: The five years ended Sept. 30, T. Rowe Price New Horizons Fund was up 36%. The five years ended Oct. 31, the same fund was up 101%. CONSUMER CONFIDENCE IS LOW: The biggest threat to the holiday shopping season is low consumer confidence. Depressed consumers have handed retailers lousy holiday revenues the past three years. But hopes tied to the new president will boost consumer outlook, says Carl Steidtmann, economist for Management Horizons. ECONOMIC GROWTH IS FALTERING: The economy continues to grow at a slow and uneven pace, the Federal Reserve said Wednesday in its latest review of conditions across the USA. That report was one of two signs Wednesday that the pace remains weak. The other news: While factory orders rose 1.1% in September, the Commerce Department said, the gain didn't make up for declines of 2.2% in August and 0.9% in July. LONG-TERM RATES SHOULD FALL: Now that the election is over, interest rates on long-term bonds should fall. The yield on the bellwether 30-year Treasury bond hit 7.22% Sept. 8, its lowest since July 1986. Since then, it has risen and now stands above 7.6%. Yields increased because President-elect Clinton held a commanding lead in the presidential race. The bond market was worried that Clinton would hike government spending. SAVINGS RATES STILL LOW: Even with a new president, savings rates aren't likely to skyrocket. The Federal Reserve Board has been pushing interest rates lower to keep the economy from slipping back into recession. So savings rates are at their lowest since banks were first allowed to set their own deposit rates in 1982. GOLD LOWER, SILVER MIXED: Post-election optimism that President-elect Clinton's economic policies will spur growth sent silver futures surging on New York's Commodity Exchange. Gold futures were little affected by the election, slipping slightly in quiet trading due to the stronger dollar. December gold was 50 cents lower at $337.70 a troy ounce; December silver was 6.5 cents higher at $3.847 a troy ounce. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3223.04 Thursday after closing down 29.44 Wednesday. The New York Stock Exchange composite opens at 229.79, down 1.45. The American Stock Exchange market value opens at 381.94, down 0.89. The NASDAQ OTC composite opens at 605.52, up 0.94. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Thursday. It opens at 0.6504 British pounds, up from 0.6454; 5.3275 French francs, up from 5.3010; 1.5747 German marks, up from 1.5645; and 123.05 Japanese yen, up from 122.15. (As of 3 p.m. Wednesday. 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. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM