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 Fri, Mar 20 1992 Date: Fri, 20 Mar 92 05:44:41 EST Message-ID: 03-20 0000 DECISIONLINE: Personal Investing USA TODAY Update March 20-22, 1992 Source: USA TODAY:Gannett National Information Network STOCKS STAGE SMALL ADVANCE: Stocks inched forward in mild trading as interest rates eased Thursday. The Dow Jones industrial average rose 7.15 points to 3261.40. Most other indexes gained slightly. Advancers bested decliners 926 to 781 on the New York Stock Exchange, where volume was 197 million shares. MORE MORTGAGE BANK OFFERINGS: Investors are having second thoughts about one of Wall Street's latest fads: Selling initial shares of mortgage banks. No less than six mortgage lenders are preparing for initial public offerings. Two firms, Margaretten Financial and Farragut Mortgage, completed IPOs this year. Another 10 are considering them. The story: Mortgage bankers finally are getting some respect. (For more, see special Mortgage package below.) DEAL NEWS LIFTS H-P: Shares of Hewlett-Packard, the Palo Alto, Calif.-based maker of midrange computers, hit another 52-week high Thursday and closed up 2 1:4 at $81 7:8. Investors say the company has made all the right moves in the fiercely competitive computer market, including taking a 5% stake in Convex Computer, a fast-growing maker of supercomputers. That move also was announced Thursday. HARLEY-DAVIDSON REVVING UP: Motorcycle maker Harley-Davidson surged 3 3:8 to $59 3:4 after bullish analysts said the company is in high gear. Merrill Lynch analyst Jill Krutick repeated her strong buy recommendation despite lowering her first-quarter earnings estimate to 45 cents a share from 55 cents. Her full-year estimate remains $2.85, vs. an actual 2.08 a share last year. Morgan Stanley also recommended the stock. WELLS FARGO SEEN AT $100: Money manager Shelby Davis sees the beaten-up shares of bank Wells Fargo jumping 48% in 12 months, fueled by a super 1993 earnings comeback. Problems in its $144 billion loan portfolio has caused the USA's ninth-largest bank-holding company to fall out of favor with investors. Thursday, Wells stock closed at $67 5:8, vs. a 1991 high of $98 3:4. But Davis sees a rebound to $100 in a year. LONG-BOND YIELD DROPS: Yields on 30-year Treasury bonds fell to 7.96% Thursday, ending a five-day reign above the 8% mark. The yields closed at 8.01% Wednesday. Bond prices closed higher, pushing yields down, on news that the United States may be preparing to attack Iraq. Military action makes U.S. securities attractive as a safe haven to investors. GOLD PRICES ADVANCE: Gold prices advanced Thursday, closing higher for the first time in a week. Gold rallied somewhat in New York amid fears of unrest in the Middle East. Gold closed on the New York Commodity Exchange at $338.80 a troy ounce, up 40 cents from Wednesday. Republic National Bank later quoted a price of $338.75, up 35 cents. Silver was quoted on the Comex at $4.121 a troy ounce, up 9.1 cents. SPECIAL PACKAGE ON MORTGAGE: EARNINGS SURGED LAST YEAR: Mortgage banks specialize in making home loans, which can then be held or sold in the secondary market. They've been around for years but haven't gotten much investor attention. Since the savings-and-loan crisis, mortgage firms have filled the void left by collapsing thrifts. Many saw earnings surge last year, as falling interest rates prompted homeowners to refinance their loans. COUNTRYWIDE POSTS BIG 1991 GAIN: Hungry for capital to fuel their expansion, mortgage bankers turned to the stock market. Until this year, only one firm, Countrywide Credit, the USA's largest mortgage banker, was publicly traded. Countrywide's stock soared 339% last year. It peaked at $46 3:8 in January. With that in mind, investors rushed to buy Margaretten's January IPO. REFINANCING EBBING: Rising interest rates are cooling the wave: Refinancing applications are down 53% from late January, according to the Mortgage Bankers Association. Margaretten stock closed Thursday at $14 1:2, down 32% from its peak. Countrywide closed at $35, down 25% from its high. "Wall Street went a little gaga over the refinancing craze," says Kenneth Campbell of Audit Investments. PENDING IPOS MAY FACE TROUBLE: That could spell trouble for companies that have pending IPOs. They are Imperial Credit Industries, EquiCredit, ARCS Mortgage, North American Mortgage, American Residential Mortgage and Plaza Home Mortgage. Analysts say the firms still have selling points. A key one: Market share. They now originate more than half of all home loans, up from about 25% in the mid-1980s. (End of package.) DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Friday at 3261.40, after closing up 7.15 Thursday. The New York Stock Exchange composite opens at 226.25, up 0.31. The American Stock Exchange market value opens at 402.17, up 1.20. The NASDAQ OTC composite opens at 625.96, up 1.02. DOLLAR OPENS UP: The dollar opens up on foreign markets Friday. It opens at 0.5855 British pounds, up from 0.5780; 5.6485 French francs, up from 5.6030; 133.54 Japanese yen, up from 131.95; and 1.6710 German marks, up from 1.6500. (As of 3 p.m. Thursday. 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. 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