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 Thu, Mar 12 1992 Date: Thu, 12 Mar 92 05:46:03 EST Message-ID: 03-12 0000 DECISIONLINE: Personal Investing USA TODAY Update March 12, 1992 Source: USA TODAY:Gannett National Information Network STOCKS FALL ON BUSH COMMENTS: The stock and bond markets went into a tailspin Wednesday after President Bush said he was "more concerned about stimulating the economy" than about long-term interest rates. The Dow Jones industrial average fell 22.36 points, or 0.7%, to 3208.63. Meanwhile, yields on 30-year Treasury bonds rose to 7.95% from 7.90% Tuesday. As recently as Jan. 8, the yield was 7.39%. (For more, see special Market package below.) MCDONNELL DOUGLAS SHARES TUMBLE: Some cautious comments in a financial statement sent McDonnell Douglas shares into a tailspin Wednesday. The stock fell 3 7:8 to $61 3:4 after the company released its annual 10K financial report. In the report, the aerospace and defense company says it's cutting its 1992 production target for the MD-80 medium-range jet to 90 from 100 and predicts negative cash flow the first half. BANK PROFITS UP: Profits for the USA's banks rose to $3.7 billion in last year's fourth quarter, the Federal Deposit Insurance Corp. said Wednesday. For the fourth quarter of 1990, banks had profits of $907 million. California banks did not share in the wealth, losing $379 million in the fourth quarter and $659 million for all of 1991. Plummeting real estate values were responsible. INVESTOR AWARDED $5.3 MILLION: A National Association of Securities Dealers arbitration panel Tuesday said a Cigna brokerage subsidiary had to pay $5.3 million to George Gage, former chairman of GTE Florida. It is a record award to an investor. In 1984, Cigna Securities invested Gage's $2 million in pension money in 12 Cigna limited partnerships that are collectively worth about $125,000 today, says Gage's lawyer. FITCH TO BE STRICTER RATER: Fitch Investors Services says it will announce Friday more rigorous procedures for rating life-insurance companies. Up to now, ratings agencies accepted financial information supplied by life insurers. No more, says Fitch. The Fitch raters will take an aggressive, new "kick-the-tires" approach. Junk-bond portfolios will also be put through a more demanding analysis. BROKERS SPREADING WEALTH: Discount broker Muriel Siebert gets some extra business thrown her way because hers is a woman-owned company. So she's giving something back, contributing 50% of the profits generated by business she gets that way to charities. Brokerage Josephthal Lyons & Ross unveiled the "Dollar-A-Day" program in which workers are asked to donate a dollar a day to the charity of their choice. CD YIELDS UP SLIGHTLY: Most bank certificate of deposit yields rose slightly in the week ending Wednesday, `Bank Rate Monitor' says. Average yields: Six-month, 3.89% vs. 3.89%; one-year, 4.13% vs. 4.12%; 2 1:2-year, 4.89% vs. 4.86%; five-year, 6% vs. 5.95%. GOLD, SILVER UP IN N.Y.: Gold rose $1.70 to $350.70 on the Commodity Exchange in New York after being mixed in overseas trading Wednesday. Republic National Bank later quoted a bid of $349.95, up $1.15. Gold also rose in London and Zurich. Silver rose 0.3 cent on the Commodity Exchange and closed at $4.147 a troy ounce. Earlier, silver fell in London to a late bid of $4.15, from $4.17. SPECIAL PACKAGE ON MARKET: FURTHER CORRECTION SEEN: Small stocks tumbled more than the Dow Wednesday. The NASDAQ composite over-the-counter index lost 6.32 points, or 1%, to 617.14. The Dow's 22.36 point loss sent it to its lowest point since Jan. 13. "The market will correct 5% to 10%" in the next 30 days, says James McCabe of Nomura Research Institute. If he's right, the Dow could fall as low as 2888. RISING RATES HAMPER FED: Rising long-term rates have frustrated the Federal Reserve's attempt to revive the economy by using its most direct tool: Cutting short-term rates. The Fed had hoped long-term rates would also decline, lowering borrowing costs to companies and consumers. Instead, the trend in long-term rates has been up for two months as investors have feared that a recovery would bring inflation. WALL STREET FEARS BUSH: Another big fear on Wall Street: The president, facing a tough re-election campaign, will overstimulate the economy and boost inflation. Wednesday, "we saw the bond market get spooked and then the stock market get spooked," says Martin Sass, chief executive officer of M.D. Sass Investors Services. Sass still believes the Dow will reach 3500 by year's end - after a further pullback. STOCKS, BONDS HAVE HURDLES: Before the Dow can reach 3500, stocks and bonds must clear some hurdles: Government reports on February retail sales, due Thursday, and the producer price index, due Friday. Strong retail numbers would fuel inflation fears and PPI will give a snapshot of February inflation. Another hurdle: Relatively high interest rates and falling stock prices abroad. (End of package.) DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens Thursday at 3208.63, after closing down 22.36 Wednesday. The New York Stock Exchange composite opens at 223.55, down 1.47. The American Stock Exchange market value opens at 405.85, down 2.69. The NASDAQ OTC composite opens at 617.14, down 6.32. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mixed on foreign markets Thursday. It opens at 0.5809 British pounds, down from 0.5830; 5.6740 French francs, up from 5.6470; 133.78 Japanese yen, up from 132.92; and 1.6662 German marks, down from 1.6725. (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: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution 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