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 Mon, Nov 9 1992 Date: Mon, 9 Nov 92 04:44:15 EST Message-ID: 11-09 0000 DECISIONLINE: Personal Investing USA TODAY Update Nov. 9, 1992 Source: USA TODAY:Gannett National Information Network BOND INVESTORS FEEL THE PINCH: Bond investors are feeling the pinch of higher interest rates. If the trend continues, they'll wish they'd bought bond mutual funds rather than individual bonds. Bond funds generally drop half as much as individual bonds do when rates rise and gain about half when rates fall. A USA TODAY study found that lower returns in rising rates is made up by the higher return in down months. PRICE SHARES SOAR ON RUMORS: Shares of Price warehouse club rocketed Friday on rumors that several major retailers might be interested in buying the company. Kmart, Wal-Mart and Sears all were mentioned as suitors. Retail stock analysts say Kmart is the most likely buyer. Analyst Christopher Vroom has hear rumors of a takeover at $65 to $70 a share, or more than $3 billion. EUROPE TRIES TO AVERT TRADE WAR: Europe appeared to blink over the weekend in its trade dispute with the United States. European Community diplomats told Reuters they'll reject a French request for a list of U.S. products that could be hit with tariffs. The European tariffs would have been in retaliation to U.S. plans - announced Thursday - for 200% tariffs on European imports, effective Dec. 5. TRADE TALKS TO RESUME: European Community leaders said European foreign ministers Monday will call for a quick resumption of U.S.-European trade talks. That reduces the likelihood of a trade war, which could gravely damage a global economy already weakened by recession. The talks failed last week and sparked a U.S. threat of imposing tariffs. DEMOCRATS AVERAGE BIG GAINS: A study shows stocks average much fatter returns the first calendar year of a Democratic regime than they do the first year of a Republican administration. The study by NCM Capital Management tracked the yearly performance of stocks the first calendar year of the past 12 administrations back to 1945. History shows gains of 17.5% the first Democratic year. ANALYST SAYS BONDS MAY HURT: Michael Steinhardt of Steinhardt Partners says Bill Clinton's win should scare investors away from 30-year Treasury bonds. Steinhardt figures long-term bond rates, at least for now, will stop going down. His rationale: Election of a new president may boost consumer confidence. Likewise, the bond market faces some uncertain months and always a bad bond note: Business is improving. JUNK BONDS SLOW DOWN: The two-year party in the high-yield junk-bond market appeared to end last month. But experts say it will continue, albeit at a tamer pace. Prices of junk bonds fell in October, says Bill Veronda of the Financial Bond High Yield Fund. Many investors noticed the drop and bolted. Analysts don't see junk bonds matching the great returns of the last two years, but expect them to remain healthy. FUND GROUPS HELP OUT: Some no-load mutual funds are quietly offering a new service: Investment guidance. Fund companies don't want beginning investors to flee the first time the stock or bond market dives. For instance, fund groups like T. Rowe Price use telephone representatives to steer conservative investors away from high-risk funds. Groups also offer publications for green investors. INVESTORS GUN SHORT-SELLERS: Short-sellers - bettors on lower stock prices - got slammed last month, losing as much as 14.5%. One hot rumor: Some big-name investors are said to be zeroing in on companies in which short-sellers have big positions. An obvious aim: To force the shorts to buy stock to cover their positions, thus driving stock prices higher. TOCZEK SEES CRISIS: Peter Toczek, a Wall Street veteran with strong overseas contacts, says Bill Clinton's next crisis may not be financial, but political. And within three months. In brief: A revolution or major outbreak of civil disorder in Russia, maybe even the overthrow of President Boris Yeltsin. Toczek says an event would end the bull market. "Stocks could get bloodied." SEC MAY CRACK DOWN: The cop on the beat finally may come to the rescue of the army of small investors who've been mauled by lousy brokers. It's an outgrowth of an earlier study of brokerage hiring practices by the Securities and Exchange Commission. USA TODAY columnist Dan Dorfman says it could lead to the SEC establishing new industry hiring guidelines or a crackdown on some brokers or both. GRANO CONFIRMS TALKS: Joseph Grano, president of retail sales at PaineWebber Group, confirms the brokerage has talked to Banc One, the big Midwestern bank-holding company, about a distribution arrangement involving sale of PaineWebber's products to Banc One customers. But he says there are no talks under way now. Still, one PaineWebber insider says a tie-in with a big bank, maybe even Banc One, is likely. ONEITA GETS HIGH RATING: Benefiting from a booming business in T-shirts and sweatshirts, Oneita Industries, a maker of both, should rack up giant earnings gain in fiscal 1992 and record results in '93, says analyst Dennis Rosenberg. He pegs earnings at $1.55 a share the fiscal year ending Sept. 30, up from an estimated $1.30 in fiscal '92. Rosenberg's 12-month target: $20, vs. a Friday close of $13 1:8, up 1:8. GOLD, SILVER DECLINE: Gold prices declined worldwide Friday. On the New York Commodity Exchange, gold bullion for current delivery settled at $335.70 a troy ounce, off 50 cents from Thursday. Silver prices relinquished ground. On New York's Comex, silver bullion for current delivery settled at $3.872 a troy ounce, down from $3.926 on Thursday. DOW OPENS DOWN: The Dow Jones average of 30 industrials opens at 3240.06 Monday after closing down 3.78 Friday. The New York Stock Exchange composite opens at 230.09, down 0.28. The American Stock Exchange market value opens at 383.26, up 0.57. The NASDAQ OTC composite opens at 616.82, up 2.74. 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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