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Show i i i I To submit a press release, announce a new Business, or comment on Utah County business, call Business Editor Travis Jacobsen during normal business hours at 344-256- The Daily Herald Thursday, December 21, I&95 G5 Analysts: Fad rate cut will n December 20, 1995 DOW (Industrials) UITA NYSE S&P500 AMEX NASDAQ By MICHAEL DUVALLY Knight-RiddFinancial NEW YORK Five months after it initiated policy easing, the Federal Reserve finally followed up with another rate cut Tuesday NYSE Diary afternoon. 68 And Tuesday's modest trimming of the federal funds target to 5.50 percent from 5.75 percent 3.110 current easing cycle, analysts Higher: Lower: 964 Unchanged: Total issues: 1994 avg. comp. vol.: 352,288,590 Volume: The federal funds rate is the rate that commercial banks charge each other for overnight loans. The Fed influences the rate by changing the cost and availability of bank reserves. The discount rate is the rate of interest the Fed charges member banks. In fact, signs that economic YORK (AP) Banks :1 nationwide have cut their prime rate to 8.5 percent from 8.75 per- - Analysts say the reduction Wednesday was a stocking stuffer for consumers it will knock a few bucks off January's credit card bills and other loan payments at many households. But big savings on the cost of paying off loans probably could reach consumers by summer, economists said. Most believe the Federal Reserve will continue to shave key interest rates next year, r which will lead banks to reduce prime lending rates even further. WASHINGTON (AP) Negotiators resolved a dispute over T I ; media ownership to remove the last major hurdle to an overhaul of laws governing the nation's com-- ; munications industry. Once approved by Congress, ; the White House pledged to sign ; the legislation into law. Vice Al Gore said the compromise pleached Wednesday "prevents 3 Undue concentration (of media Ownership) while providing flexibility." r -- The legislation represents the -- most sweeping changes in the nation's telecommunications laws since 1934. For companies regulated by those laws, the changes involve billions of dollars. Pres-ide- addi-vtion- nt al debt. PolyGram will also receive a extended long-terrecently license to 75 classic films, including "Wuthering Heights," "The Pride of the Yankees," "Guys and Dolls" and "The Best Years of Our Lives." SANTA ANA, Calif. (AP) Orange County sued its former Stocks dive as budget talks fail NEW YORK (AP) Blue-chi- p stocks dove late Wednesday as budget talks in Washington fell apart for the second time. The broader market ended mixed. Stock investors started the day extending Tuesday's rise following a brutal 101 point drop in the Dow average on already factored in additidrial MrAnlev said he thniTcrM .... j the Fed would be relatively eauH tious about easing again soon! l has been four meetings sincetthll '.' last ease," he noted. The cut in interest rates, whj'elL was characteristically modest Federal Reserve Chairman Alar$" Greenspan likes to move in' "baby steps," in the scornfuj words of a former Federal! indicated thai Reserve official the Federal Reserve may be takJ ing seriously signs of a slowjrig economy. Housing starts havg declined for three months, indus trial production is down, and, so far, consumers don't seem to be buying Christmas gifts enthusiastt 12 pacincr - momentum, which was especially robust in the third quarter, is waning and the prospect of an eventual budget deal likely to result in a fiscal drag on the economy, should allow the Fed to trim fed funds yet again sometime in the first quarter, they said. The federal funds rate is the rate that commercial banks charge each other for overnight loans. The Fed influences the rate by changing the cost and availability of bank reserves. "I don't think it is the last easing at all," said Marilyn Schaja, money market economist at Donaldson, Lufkin & Jenrette. "It is the second of many" with more to come in 1996, she m Feb. 24, . 6 Jan. 15, 1985 J 11.50, WoJ L 1989V Jan. 8, 1990 1986 1987 1988 f 1989 1990 gest that further interest rate cuts are coming. "Yes, there will be more action," Dederick said, adding that he expected the easing cycle to continue through the winter and be completed by I y .A 10 1985 if If 4 said. 1991 060.20,1995: 1992 1993 1994 1995 tically. I. A cut in interest rates believed to stimulate the ecofttyQ In announcing the cut, the FOMC said that U.S. inflation has been "somewhat more favorable" and that inflation expectations have moderated. That is nearly the same line the Fed used in July when it last midyear. Monday. Stocks got an early boost from bonds, which rose in response to a decision by the Federal Reserve on Tuesday to cut the Federal Funds rate the interest on overnight loans between banks to 5.5 percent from 5.75 percent. Banks nationwide followed the Fed's action with cuts in the prime rate, the base upon which they make loans, to 8.5 percent from 8.75 percent. Bonds gained more than 14 point early in the day, but backed off in early afternoon as the news from Washington proved disappointing. The Treasury bond was down 9-point near the end of the day, yielding 6.12 percent. my by making borrowing fo& businesses and consumers Jess' 1 cosuy, out 11 usuany tatces utw 8 months for the effects to up. In cutting rates, theref Greenspan may be trying to Fqrsii stall a recession a year from now!'. U.S. stock and bond markets roared back in 1995 after a troubled 1994, a sign of growing confidence in America's economic future. The dollar rebounded from a bout of spring weakness to finish the year little changed. THE STOCK MARKET The Dow Jones industrial average pierced the 4,000 and 5,000 barriers. Even with a pullback, the stock market's yardstick finished about 30 percent higher for the year. best-know- n Yields on Dec. 15 5.176.73 Treasury bonds fell, a barometer of broader interest rate trends and a sign of investor happiness over tne tame U.S. inflation rate. - sN BOND 1 nnw j 3,000 ! (D ecern '. 4 j 2 i 1,000 : 0 Feb. Mar. April June May July Aug. Sept. Oct. Nov. Dec. Dec. Jan. 1994 1995 Feb. Mar. The British pound was quoted at $1.5360, down from $1.5415 May .. - June July Aug. Sept. 5 5 : Oct 1 Nov. Dec.1 .. The American currency hit a postwar low against the yen in the spring but then rebounded, a reflection of improved U.S.Japanese economic cooperation and skillful coordinated central Dank intervention. j f ' I SJ YEN j l- I - 4 4oi ?' ;' mark- I QUI , 20 iJo Feb- - Mar 1 ( - 7 M "SN& May June July 001 Jaa l j i Feb- - Mar- W May 1994 1995 Aug. i Sept Oct Nov &2 'ii'i - I Tuesday. X l I sV to i r ' i " I marlr J v I m I DM!..-- S4 f ' The do ar a m fp to a vwu nnainct tho mart rli uui iigaggea oacx. py iaie uecemoer n was aown only 1443 i a94 level. sugniiy tram ns year-en- a Dec. 15 102 xen jvf ;TTS-- V yen ! " t,J ! WEEKLY DOLLAR RATES iyy 1.3754. April 3 f9 I Dec. Jan. 1994 1995 yV ... 2,000 J 5.35 . - lollarsfifetals FJarln 'down from 4.9555; 1,594 Italian lire, down from 1,595; and 1.3669 Canadian dollars, down from Dec. 15t 6.09 i 4.000 st :i.l565; 4.9415 French francs, -- w 30-ye- 7 ed from 101.96. Other late dollar rates in New York, compared with late Tuesday: 1. 1545 Swiss francs, down from j. TREASURY BONDS FT-S- E NEW YORK (AP) The dollar weakened slightly against most leading currencies Wednesday after budget negotiations between President Clinton and congressional Republicans crumbled late in the day. ' In late New York trading the dollar was quoted ; Wednesday, lat 1.4400 German marks, down 'from 1.4410 marks late Tuesday. The dollar was changing hands in New York at 101.90 yen, down so 1 NICE YEAR ON WALL STREET 30-ye- ar mon--ey-- j -- NEW BRITAIN, Conn. (AP) Connecticut has become the first place in the nation to allow statewide competition for local phone service. The Department of Public Utility Control on Wednesday unanimously approved a plan to Foreign stock markets allow companies like MCI Commade in strong gains munications Corp. and AT&T overnight trading following Corp. to compete against Southern Tuesday's recovery on Wall New England TelecommunicStreet. The Nikkei index in ations Corp., which now has a Tokyo rose 1.61 percent, the monopoly on local phone service DAX in Frankfurt added 1.16 in the state. and in London, the percent, Regulators in other states have 100 index climbed 1.03 ; allowed local phone competition percent. in limited areas, such as in Rochester, N.Y., portions of Chicago and California. But the decision outside auditor for $3 billion, ;ih Connecticut marks the first time accusing KPMG Peat Marwick of ;an entire state is involved. failing to detect and warn of the reckless investments that caused LOS ANGELES (AP) : The the nation's biggest municipal Samuel Goldwyn bankruptcy. The suit filed Wednesday is a ;Co. is selling its film and television library to PolyGram Filmed companion to a $2 billion-plu- s in an attempt to lawsuit the county filed earlier : Entertainment rebuild Goldwyn's movie produc-tio- n against Merrill Lynch & Co., the main investment house used by and distribution arm. London-base- d PolyGram former county Treasurer Robert L. agreed Wednesday to pay Gold-wy- n Citron. $62 million for 850 movies, Merrill, the nation's largest bro"Much Ado About including kerage, and Peat Marwkk, the "Nothing" and "The Madness of nation's second-largeaccounting King George," and 740 television firm, say the county must accept shows. Goldwyn will use the blame for its own mistaken restructure its $72.9 million debt-crippl- j T? is move "validafijjj Tuesday's the markets where they are now,'; said John McAuley, economist at Wilkinson Boyd Capital fyfjjjrj kets. .; Though the markets hava trend 10-ye- ar ; 1 Washington. The prime rate affects rates on credit card, auto, home equity and small business loans. said. 538,244,600 cut the fed funds target. "They are trying to tie id$ something (and) they can't tiejil to the budget," said Stephen Gal lagher, director of U.S. econorrii researcn tor aocieie ueneraiej referring the budget stalemate in The fed funds rate wili stand at "no more than 5 percent" once the easing cycle is completed, he stated. At the same time that the FOMC cut the fed funds target, it left the discount rate unchanged at 5.25 percent. Prim rate: likely will not be the last in the Business Highlights - NEW "The easing is not too much, not too little. It's really the midpoint of expectations that will make everyone comfortable," agreed Robert Dederick, chief economist at the Northern Trust. The FOMC's focus on moderating inflationary pressures sug- - 1 it--1 : Source: AP research NEW YORK ( AP) Spot metal prices Wednesday. Aluminum - 75.3 cents per lb, London Metal Exch. Tue. Copper $1.3700 Cathode full plate, U.S. destinations. Copper - $1.3020 per lb, NY Comex spot Tue. Lead - 46 9 cents per lb. Zinc per lb, delivered. Tin - $4.1737 Tue Metals Week composite price per lb. Gold - $387.60 Handy & Harman (only daily quote). Gold $387.40 troy oz., NY Comex spot month Tue. Silver - 5.115 Handy & Harman (only daily quote). Silver - $5,102 per troy oz., NY Comex spot month Tue. Mercury $250.00 per 76 lb flask. New York. Platinum $409.50-$- 4 12.00 troy oz.. N.Y. (contract). Platinum $407.80 N.Y. Merc spot per troy oz. Tue. us non-ferro- -- .5095-.524- -- -- -- Bull market' taking I've heard quite a bit Q: about the global w heat shortage, yet prices don't appear to be going anywhere. Is this a classic case of "buv the rumor, sell the fact"? A: While wheat prices appear stalled in a sideways trend over the past month, it's interesting to note the nearby futures contracts are trading at a premium, higher than the distant months. This is a sign of a bull market. It's taking place in all three of the major wheat markets Chicago, Kansas City and Minneapolis. It's occurring at a time (the December speculative liquidation) when the charge of wheat near months generally lose to the farther out months. It's a sign the market wants wheat now and is willing to pay up per contract for a profit in i-- for it. Georgia If the market had enough supply now, the back months would trade at a premium to compensate for storage and interest charges. Bottom line, it's a sign of tightness. My conclusion is that this means higher prices yet to come. Here's a speculative strategy designed to take advantage of a bull wheat move. Look to buy March Minneapolis on strength an indication the euui of $1,750. Commissions sKiiM run no more than 2 centffcf bushel or less than $100 pexSrpjj-trac- t. tS-- . ; V of George Kleinman is prestftftit Commodity Resource On Commodities Corjya licensed commodity brokerage firm. Direct your questicYalit recent Herald has run its course. close above 4.97. Risk 20 cents for a profit objective above $5.35. This is a risk of about $1,000 sell-o- ff Buy on a George Kleinman do ThelWr PmvoP.O. Box Minneapolis, MS 55415, oraMt CRC at 1(800)233-444- 5 or Fi or Int6cl address: . "7U http:www.commodity.com. 107 833-140- 0, . OOR ; |