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Show Basic Money Supply On Decline for 2nd Straight Week By Steven P. Rosenfeld Associated Press Writer NEW YORK The nations basic money supply fell for a second straight week in early March and all three measures of the nation's money supply stayed within Federal Reserve growth targets in February, the Fed said Thursday. Analysts said the report should calm fears that a sharp and sustained increase in interest rates is imminent, but they did not rule out a slight rise in the prime rate in the weeks ahead. Its obviously good news," said Thomas Thomson, chief economist at Crocker National Bank in San Francisco. It should relieve some tension in the money markets that has been building for the last two to three weeks. In the nations credit markets, traders greeted the figures by bidding interest rates lower, with yields on three-montTreasury bills slipping to 9.45 percent from 9.49 percent just before the release of the rep0rl 15 Increase compute interest charges on shortterm business loans. Thompson said there probably would be a rise in the prime rate within two weeks, but that for the next three to four months, that will probably be the extent of it. The Fed said Ml fell to a seasonally adjusted $532 billion in the week ended March 5 from a revised $533.4 billion the previous week. The previous weeks figures was originally reported as $533.3 billion. For all of February, Ml climbed to an average $532.9 billion from $530 billion the previous month. Included in Ml Ml includes cash in circulation, deposits in checking accounts and k travelers checks.The Fed has said it would like to see Ml grow between 4 percent and 8 percent from the fourth quarter of 1983 through the fourth quarter of 1984. The Fed said M2 rose to $2.2219 trillion in February from $2.2064 trillion the previous month. M2 includes Ml and such things as deposits and deposits in mutual funds. money-markM3 rose to $2.7438 trillion last month from $2.7211 trillion in January. It represents M2 plus money that is tied up in large, longer-tercertificates deposits, such as of deposit in denominations of over non-ban- h Prices of long-terbonds, which move in the opposite direction of interest rates, rose more than $5 for each $1,000 in face value. The Fed said Ml, representing funds readily available for spending, fell $1.4 billion in the week ended March 5 after falling $1.6 billion the previous week, when it snapped a string of five straight weekly increases. For all of February, the Fed said Ml rose by $2.9 billion. The central bank also reported on two broader measures that are compiled on a monthly basis, saying M2 increased $15.5 billion in February and M3 climbed $22.7 billion. The Fed tries to provide enough money to sustain economic growth without reviving inflation. There had been fears that a combination of rapid growth of the money supply and a brisk economy would prod the Fed to make credit scarcer, something that would push interest rates higher and jeopardize the economys expansion. Two Conditions Thomson said that for the Fed to tighten policy significantly, both the money supply would have to exceed growth targets and the economy would have to be growing rapidly. With only the economy showing continued vigor, he said, only a slight rise in interest rates is expected. Donald Maude, chief financial economist at the New York investment firm of Merrill Lynch, Pierce, Fenner & Smith Inc., called Thursdays report one positive development out of left field. He, too, said there is still a chance of the Fed adopting a more restrictive policy because of the economys strength. The Fed said earlier Thursday that industrial production rose 1.2 percent in February, matching Januarys rise, which Maude called a k strong monthly increase at a time when people are expecting moderation. Maude said there is an outside shot of a small hike in the prime lending rate, which has stood at 11 percent si ice last August. It should t n out to be temporary if it does ot.cur," he added. Maude predicted an increase of of a percentage point to one-haof a point for the prime rate, the base upon which banks y $100,000. The Feds growth target for both M2 and M3 is 6 percent to 9 percent from the fourth quarter of 1983 to the fourth quarter of 1984. The Salt Lake Tr ibuue The Market In Brief New York Stock March 15, 1984 79,520,000 0 0 - NEW YORK (AP) The stock market settled for a modest gain Thursday after a midafternoon rally SHARES UNCHANGED 646 90.67 0.35 157.41 0.64 1,167.40 1.36 S. credit-tightenin- WASHINGTON (AP) - The chair- issues. Unless Reagan chooses some businessmen, farmers, people who give more balance to the board, rather than just trained economists, I am putting everyone on notice that I will oppose, not just vote against, but try and stop those nominations, the chairman, Sen. Jake Garn, said in a recent floor speech. President Reagan is expected to name Martha Seger, a Central Michigan University finance professor with a background in banking in the Detroit area, to replace Nacy Teeterm expired ters, whose Jan. 31. Money-SupplNumbers Largely in response to the money-supplnumbers, rates on short-terTreasury bills dropped as much as 7 basis points, or hundredths of a percentage point, and prices of longterm government bonds, which move in the opposite direction from interest rates, rose more than $5 for 0 in face value. each Gainers of a point or more among the blue-chi- p and technology stocks included International Business Ma- m er at 47 V Knight-Ridde- r which estimated Newspapers, a gain of better r than 30 percent in its 0- Cap. Red. 1000.00 -- Plus Sales Tax for complete Center Garff Motor Satt 575 S State information... 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Grimm has been named president of the new corporation, at P66 Atherton Drive, Salt Lake City. of On Friday, representatives Utah businesses, who can purchase goods from Price Savers for their own use or for resale, can visit the p.m. and C.ty 355 6057 mmm custom-programme- business Lake per month" Seattle Firm Opens Wholesale Warehouse Today 8 30 500-stoc- k first-quarte- Only TRUNK QUEUING and Nationwide turnover in NYSE-liste- d issues, including trades in those stocks on regional exchanges and in the market, totaled 94 11 million shares. Standard & Poor's index of 400 industrials rose .79 to 177.91, and S&Ps composite index was up .64 at 157.41. chines, up 1 at 112; Procter & Gamat 48 V Digital Equipble, up ment, up 1 at 92; Burroughs, up ll2 at 48 V and Data General, l3g high- System 801 by Radio Shack lf 10 a m. to 90.67. Our Newest Electronic Phone System Features Microprocessor Circuitry one-quart- 100,000-square-fo- Advancing issues outnumbered declines by almost 4 to 3 in the daily count on the Big Board, and the exchange's composite index added .35 TElEraME SYSTT back-to-bac- tween tions. $1,-00- mbmey by M Short of Expectations Federal Express dropped 1 to 36V The company reported earnings for the quarter ended Feb. 29 of 60 cents a share, up from 46 cents in the comparable period a year earlier, but the increase apparently fell short of some investors expecta- y Wednesday. Deficit Negotiations Analysts said buying at midafternoon apparently reflected speculation that negotiators in Washington might soon have some progress to report in their efforts to agree on measures to reduce the federal budget deficit. But market-watcher- s also said interest rates were still a major concern for investors. Before the market opened, the Federal Reserve reported that industrial production increased 1.2 percent last month, matching its rate of gain in January. Brokers said that news reinforced the belief that economic growth was still setting a strong pace. Concerns have been widespread on Wall Street lately that too much evidence of strong economic activity might prompt the Federal Reserve to tighten credit, pushing interest rates higher. After the stock market closed, however, there was some better news on the interest-rat- e front when man of the Senate Banking Committee says his panel will take a dim view of President Reagans next nominee to the Federal Reserve Board unless he or she knows something about farm and small business to 138V2. g y Exchange totaled 79.52 million shares, up from 77.25 million Garn Issues Warning Regarding Nominee earnings, climbed 2 to 23 V Capital cities Communications, which reported plans to by up to 500,000 of its shares on the open market, rose 5 d Blue-chi- p and technology issues posted some of the most notable advances in a quiet session. The Dow Jones average of 30 industrials, up more than 7 points at its best level of the day, closed with a 1.36 gain at 1,167 40. Since the start of the week the widely recognized average has climbed 27.64 points. Volume on the New York Stock DOWN &P. Comp. Dow Jones Ind. the Fed reported a $1 4 billion decline in the money supply for the week ended March 5. The figure was seen as lessening the chances of any stringent by the central bank. faded. 452 N.Y.S E. Index B9 Stock Market Posts Modest Gain VOLUME UP 16, 1984 Midafternoon Rally Fades Exchange 870 Friday, March .. .,.....1 iau |
