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The nations exchanges and brokerage houses said their computers systems have been strained by the avalanche of trading triggered by the past weeks stock market collapse. And while the financial instrys hi-tech resources have been able to handle the crisis the sudden surge in trading volume will likely force the exchanges and securities firms to revamp their computer systems and communications networks several years earlier than they had planned industry officials said. We had already started certain processes to increase the New York Stock Exchanges capacity said Jim Squyres a spokesman for the Securities Industry Automation Corp which runs the central computer network for the New York and American Stock Exchanges. We will have to seriously consider speeding that up he said. After three straight days of record volume however many exchanges were pushing their systems to untested limits. And while the exchanges said their computers were handling the crush brokers and traders complained about lost trades and delayed price quotes. The most serious problems arose on Monday when a record fall of 508 points in the dow and volume of more than 600 mln shares on the New york stock exchange stunned the entire industry. The American Stock Exchanges order-routing system crashed just 10 minutes before trading closed. The Pacific Stock Exchange suspended business a half-hour early so it could catch up with a massive backlog of trades. And the price-quote feed supplied by the NYSE was cut off several times during the day leaving some traders with quotes that were often 45 minutes behind the actual market. Although the computers whirred away late into the night the exchanges opened on time Tuesday and problems were fewer even though NYSE volume swelled to 610 mln shares. Combined volume of the NYSE American and over-the-counter exchanges topped 900 mln shares. I think were equipped for this kind of trading said Paul Stevens executive vice president of operations for the American Stock Exchange. The problem is less the computers which are handling the volume than the strain on people he said. The computers might turn out to be the heroes of this whole thing added DuWayne Peterson executive vice president of technology at Merrill Lynch and Co Inc. In fact officials said the biggest constraint on trading was caused by some of the oldest machines on exchange floors the card printers that issue the buy and sell orders. But even as computer executives spoke with awe about their systems ability to hold up under unprecedented pressure they started to plan for the future. We had to do a lot of innovative things to handle this volume said Squyres of the Securities Industry Automation Corp (SIAC) which is jointly owned by the New York and American Stock exchanges. SIAC had planned to boost the capacity of its system by up to 50 pct by 1990. But that and other improvements will now be made much earlier. Meanwhile New York Telephone Co said Mondays panic selling did not wreak havoc on its telephone system. It was a normally heavy business day said company spokesman Steve Marcus. Reuter | COMPUTER SYSTEMS STRAINED BY MARKET COLLAPSE |
TLX Partners a group led by Asher Edelman does not see any problems with its 65 dlr per share bid for Telex Corp a Shearson Lehman official advising the group said. Several other takeover proposals have crumbled following declines in financial markets leading to speculation that Edelman might also drop his offer. Telex fell 11 to 34-1/4. Earlier today Carl Icahn dropped his bid to take Trans World Airlines Inc <TWA> private and Dart Group Corp <DARTA.O> said it abandoned plans to acquire Dayton Hudson Corp <DH>. Both cited market conditions. Nothing fundamental has changed with the company. The stock price has changed but the company hasnt changed so theres no reason for us to change said Daniel Good head of Shearson Lehman merchant banking. Things are proceeding as planned and we fully expect that at the time we have to pay for the shares the financing will be in place Good said. Shearson has agreed to provide bridge financing of up to 600 mln dlrs for the Edelman group. Reuter | EDELMAN GROUP COMMITTED TO TELEX <TC> BID |
Shr 46 cts vs 55 cts Net 3532000 vs 4217000 Revs 54 mln vs 52.4 mln Nine mths Shr 1.97 dlrs vs 1.98 dlrs Net 15.0 mln vs 14.8 mln Revs 176.2 mln vs 176.9 mln Reuter | CP NATIONAL CORP <CPN> 3RD QTR NET |
Shr primary 92 cts vs 1.09 dlrs Shr diluted 82 cts vs 97 cts Net 21.8 mln vs 26.1 mln Nine mths Shr primary 3.07 dlrs vs 2.96 dlrs Shr diluted 2.72 dlrs vs 2.44 dlrs Net 73.2 mln vs 65.3 mln Assets 14.29 billion vs 12.35 billion Deposits 9.52 billion vs 8.69 billion Loans 8.79 billion vs 8.69 billion Reuter | GREAT AMERICAN FIRST SAVINGS <GTA> 3RD QTR NET |
MDS Health Group Ltd said that mass spectrometry equipment developed and made by its Sciex division will be used in British-made contraband detection systems being purchased by the Japanese government. The company said the Japanese customs bureau placed an initial 21 mln dlr order. The equipment is able to detect illegal drugs in cargo the company said. The systems are made by British Aerospace <BAEL.L>. Reuter | MDS HEALTH <MHGA.TO> GETS ORDER |
The U.S. Senate on Tuesday backed President Reagans retaliatory strike against Iranian targets in the Gulf as it moved to take a greater role in making policy in the volatile region. Senators voted 92-1 for a non-binding measure that endorsed Mondays U.S. attack on two Iranian oil platforms in retaliation for an Iranian attack last Friday on a Kuwaiti ship flying the American flag. The measure said the attack was a firm indication of U.S. resolve that Iran cannot take military action against the United States with impunity. Earlier the Senate cut off Republican stalling tactics and set a vote on a measure that could give Congress a larger role in making Gulf policy. The measure however does not require Reagan to comply with the 1973 War Powers Act which could lead to a pullout of U.S. forces from the Gulf. While Democrats and Republicans praised the U.S. retaliatory strike many voiced new fears about the growing U.S. involvement in the Gulf and some demanded that Reagan comply with the War Powers Act. Reuter | SENATE BACKS U.S. RETALIATION IN GULF |
Canada will propose at the new round of international trade talks that most trade-distorting farm subsidies be phased out over a five year period Trade Minister Pat Carney said. Agricultural subsidies and trade barriers have created a vicious circle which continues to cause problems of overproduction and low commodity prices Carney told the House of Commons. Carney was outlining the governments new position on the farm trade problem that was tabled on Tuesday in Geneva in the multilateral talks under the GATT (General Agreement on Tariffs and Trade). While few details were released Carney said the government would also be pressing for an improvement in market access and new measures to ensure countries do not erect artificial barriers. Under the Canadian proposal all countries would have to ensure that domestic policies and programs to address the specific needs of their farm sectors do not distort trade a government background paper said. Furthermore in assessing the trade impact of programs credit could be given to countries which effectively control the output of farm products the papers said. Reuter | CANADA SEEKS FIVE YEAR FARM REFORM PLAN |
Standard and Poors Corp said it is reviewing for downgrade United Artists Communications Incs single-B rating on 490 mln dlrs of outstanding and shelf-registered subordinated debt. Placed under review with positive implications were United Cable Television Corps B-minus rating on 250 mln dlrs of outstanding subordinated debt and preliminary B-plus senior and B-minus subordinated ratings on 200 mln dlrs of shelf-registered debt. S and P said the reviews reflect its perception of the implications of a proposed merger involving the two firms. Reuter | S/P REVIEWS UA COMMUNICATIONS <UACI> FOR CUT |
Standard and Poors Corp said it may downgrade the 100 mln dlrs of B-plus 13-5/8 pct senior subordinated debentures due 1997 of Bally Health and Tennis Corp a unit of Bally Manufacturing Corp. S and P cited the parents proposals to sell Bally Health for more than 500 mln dlrs to an investor group. It noted the transaction includes the assumption of Bally Healths debt. Although the investor groups plans are not known the acquisition will probably be debt financed and markedly increase Bally Healths financial risk. S and P said the sale of the unit would increase the parents financial position. In a related action Standard and Poors affirmed the debt ratings of Bally Manufacturing and related entities. Affirmed were BB first mortgage bonds BB-minus second mortgage bonds and B-plus subordinated debt. S and P said pro-form debt leverage for Bally Manufacturing adjusted to capitalize operating leases drops to a still high 68 pct from an aggressive 75.5 pct at June 30. Adjusted for asset sales the parent companys return on capital 11.6 pct in 1986 should remain subpar S and P said. Reuter | BALLY <BLY> UNIT MAY BE DOWNGRADED BY S/P |
MGM/UA Communications Co said it signed an agreement with CST Communications Co for the purpose of financing American motion picture projects. CST is an American corporation formed by C. Itoh and Co Ltd <CITT.T> Suntory Ltd and Tokyo Broadcasting Systems Inc <TBRS.T>. The company did not detail the agreement. Reuter | MGM/UA <MGM> SETS PACT WITH JAPANESE GROUP |
Shr 1.18 dlrs vs 87 cts Net 149.6 mln vs 134.0 mln Revs 1.10 billion vs 956.4 mln Nine mths Shr 3.36 dlrs vs 2.42 dlrs Net 428.1 mln vs 373.7 mln Revs 3.13 billion vs 2.70 billion Avg shrs 127.3 mln vs 154.5 mln NOTE: 1986 results include 25 mln dlr reduction of operating income for the relaunch of Contac. Reuter | SMITHKLINE BECKMAN CORP <SKB> 3RD QTR NET |
First Commercial Bancorp said it will acquire the three-branch Citizens Bank of Roseville in a stock swap. The value of the agreement will be based on Citizens adjusted book value at year end and the trading price of First Commercials stock. Citizens book value was about 1.9 mln dlrs at the end of the third quarter according to the banks counsel Guy Gibson. Under the agreement Citizens shareholders could also trade their stock for a five-year debenture issued by First Commercial. Terms of the debenture have not been established. Reuter | FIRST COMMERCIAL <FCOB.O> TO ACQUIRE CITIZENS BANK |
United Artists Communications Inc and <United Cable Television Corp> said they have indefinitely suspended negotiations on a proposed merger of their companies previously announced. The companies cited a combination of extraordinary market conditions and unresolved terms of the merger as contributing to the action. Reuter | UNITED ARTISTS <UACI.O> SUSPENDS MERGER TALKS |
Shr 41 cts vs 33 cts Net 10.2 mln vs 8309000 Revs 193.3 mln vs 157.7 mln Nine months Shr 1.29 dlrs vs 1.02 dlrs Net 32.1 mln vs 25.4 mln Revs 582 mln vs 486.5 mln Reuter | THE DEXTER CORP <DEX> 3RD QTR NET |
Shr 56 cts vs 68 cts Net 8327000 vs 9738000 Nine mths Shr 2.19 dlrs vs 1.67 dlr Net 32.8 mln vs 24.8 mln Avg shrs 15.0 mln vs 14.9 mln Assets 5.58 billion vs 4.34 billion Deposits 3.60 billion vs 3.27 billion Loans 2.96 billion vs 2.90 billion Reuter | WASHINGTON MUTUAL SAVINGS BANK <WAMU.O> 3RD QTR NET |
Sept 30 end Shr six cts vs 17 cts Net 1064000 vs 2676000 Revs 144.6 mln vs 129.4 mln Avg shrs 17121000 vs 16065000 Six months Shr 13 cts vs 25 cts Net 2167000 vs 4029000 Revs 248 mln vs 249.2 mln Avg shrs 17121000 vs 16065000 Reuter | TRINITY INDUSTRIES INC <TRN> 2ND QTR NET |
BSD Medical Corp said Alan L Himber has been appointed chairman of the board replacing John E. Langdon who resigned. BSD said Langdons close businees associates Philip D. Dixon III and Robert E. McCarroll all resigned as directors. New board members will be appointed in the near future. Himber became the majority stockholder of the company in June. Reuter | NEW BSD <BSDM.O> CHAIRMAN NAMED |
National Self Storage said has sold nine storage facilities to Southmark Corp for 37.1 mln dlrs. National Self a developer of storage space for business records said the purchase includes nine storage facilties. National Self also said it and Southmark plan a two-year 100 facility expansion program in South Florida and across the country. Reuter | SOUTHMARK <SM> TO PURCHASE <NATIONAL SELF> |
W.R. Grace and Co said a federal district court jury in Chicago has ordered it to pay 100 mln dlrs in damages based on a judgment involving a loan agreement with Continental Illinois National Bank <CIL>. The company said the damages consist of 25 mln dlrs in compensatory damages and 75 mln dlrs in punitive damages. It said it will appeal the ruling. The company said the litigation involved an interpretation of a complex financing arrangement entered into with Continental Illinois National Bank <CIL> which transferred the loan to the Federal Deposit Insurance Corp upon restructuring of the bank. The company said it believes the appeal will be successful. Separately it said it has resumed the periodic purchases of up to 2.3 mln shares of Grace common stock in unsolicited open market and privately negotiated transactions. The company has about 42.2 mln common shares outstanding. Reuter | GRACE <GRA> PLANS TO APPEAL 100 MLN DLR JUDGMENT |
Qtly div 63 cts vs 62 cts Pay Nov 20 Record Nov 3 Reuter | HEALTH CARE PROPERTY <HCP> INCREASES QTLY DIVIDEND |
Foreign investment in Mexico stood at end August at 17.8 billion dlrs following an increase of 900 mln dlrs in the first eight months the Trade and Industrial Development Ministry said. It said authorized investments rose 30 pct last year equivalent to 2.45 billion dlrs and expected a similar increase for 1987 as a whole. Reuter | MEXICO PUTS FOREIGN INVESTMENT AT 17.8 BILLION DLRS |
The Swiss Mortgage Institute (Schweizerischer Hypothekarinstitute) is issuing a 160 mln Swiss franc five pct 12-year bond priced at 100.5 pct lead manager Credit Suisse said. Subscriptions run until Oct. 29. Reuter | SWISS MORTGAGE INSTITUTE ISSUES 160 MLN SFR BOND |
Chiles military rulers imposed a range of punishments ranging from fines to loss of political and civil rights for those convicted of belonging to banned Marxist parties. Any newspaper or magazine publishing their views risked temporary suspension. The crackdown came in an ammendment to the Constitution approved by the Military Junta the countrys legislature on which the four branches of the Armed Forces are represented. Reuter | CHILE MILITARY MOVES TO SHACKLE MARXIST LEFT |
Tokyo stock index rises 63.48 points to 21,973.56 in first nine minutes |
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Tokyo stock index rises 63.48 points to 21,973.56 in first nine minutes |
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Australian share index up 79.0 points at 1628.5 in first 30 minutes |
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Tokyo stock index rises 353.09 points to 22,263.17 after 30 minutes |
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Tokyo stock index soars 828.37 to 22,738.45 after 64 minutes |
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Tokyo stock index up 1,214.68 at 23,124.76 after 98 minutes |
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Tokyo stock index soars 1,376.86 points to end morning trade at 23,286.94 |
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The Bank of Japan bought around 50 billion yen of 10-year government bonds in an operation seen aimed at allaying fears of a collapse in the market bond traders said. The central bank bought the 6.8 pct 73rd 6.5 pct 80th and 5.1 pct 89th issues. Yield on the key 89th bond due 1996 subsequently fell to 5.560 pct in early trading from 5.920 pct at the close on Tuesday after opening at 5.600 pct. The market had generally welcomed the operation and trading volume had been gradually increasing. There was some retail bargain-hunting for less active issues traders said. REUTER | BANK OF JAPAN BUYS 50 BILLION YEN OF BONDS |
The Bank of Japan reassured a nervous money market after the sharp fall in Tokyo stock prices yesterday by conducting a 200 billion yen commercial bill purchase operation money traders said. The central bank injected funds through three-month repurchase agreements which mature on January 11 and bear interest of 3.9375 pct identical to this mornings rates on three-month commercial bills. The operation was done partly to roll over 300 billion yen in commercial bills maturing this morning. Money market sources project a 260 billion yen surplus today. In the bond market the Bank of Japan offered to buy around 50 billion yen of 10-year government bonds encouraging an already firm tone in bond prices dealers said. The Bank of Japan was trying to reassure market participants that it was ready to supply funds whenever the market needed them especially after Tuesdays plunge in Tokyo stock prices securities house traders said. The widely held market belief that interest rates were heading higher was a major cause of the recent tumble in bond market prices and one reason behind the stock market plunge they said. REUTER | BANK OF JAPAN BUYS 200 BILLION YEN OF BILLS |
The Black Monday stock market crash failed to destroy Americans faith in the economic soundness of the country according to a poll released on Tuesday. The ABC-Washington Post poll taken after the close of stock trading on Monday showed 58 pct did not believe the unprecedented slide in stock prices foretold an economic downturn and 70 pct rejected the notion the country faced a 1930s-style Depression. Fifty-three pct of those interviewed said they had owned stocks at some point and only one pct said they had sold any as a result of Mondays decline. Of the 40 pct who currently held stocks only two pct said they planned to sell some and four pct said they planned to buy. The poll of 507 men and women was taken by telephone on Monday night after the Dow Jones Industrial Average plunged more than 500 points or 22 pct in record volume. REUTER | POLL SHOWS AMERICANS HOLD ON TO STOCKS AFTER DROP |
Tokyo's stock index plummets 615.31 points to 25,131.25 after 51 minutes |
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Miyazawa says overseas stock plunges not likely to cause Tokyo market freefall |
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Miyazawa says G-7 still strongly supports Louvre Accord |
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Tokyo stock index falls 201.12 to 25,545.44 after open, most stocks untraded |
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Mondays stock market collapse could spell disaster for Republican hopes of retaining the White House in 1988 -- if it proves to be the start of a general economic downturn -- political experts said. The question is does the stock market (decline) signal an impending recession. If that is the case the Republicans will have a very difficult time winning independent political analyst William Schneider told Reuters. If the Democrats nominate anyone halfway credible they would win he added. Schneiders comments on the heels of a 500-point decline in the bellwheter Dow Jones stock market average reflected the old political adage that elections are almost always decided by voters feelings about their financial well being. There is no doubt people always vote their pocketbook and we dont expect 1988 to be any different says Donald Foley the top spokesman for Missouri Representative Richard Gephardts Democratic presidential campaign. Foley added that the five-year old stock market rally has shown amazing resilience and theres no telling where the market will be by the end of the week. President Reagan said he was puzzled by the days events but is convinced the economy is fundamentally sound. I think everyone is puzzled ... because all the business indices are up. There is nothing wrong with the economy he told reporters. I dont think anyone should panic because all the economic indicators are solid he added. But for the time being the decline on Wall Street knocked the underpinnings from his boasts that the record bull market demonstrates the wisdom of current economic policy. It could also deprive the Republicans of a major argument for keeping the White House in their hands when President Reagan leaves office in January 1989. It gives a hollow ring to the words used by Vice President George Bush just a week ago when he formally entered the White House race. We have weathered the storm. Our economy has recovered to be the strongest in history Bush said in reference to the recovery from the 1981-82 recession that pushed unemployment to its highest level since the Great Depression of the 1930s. We mark next week the longest peacetime economic expansion in our nations recorded history Bush bragged. At midday even as Wall Street was being battered by a record selling panic Reagan gave a glowing account of the economys performance at a swearing in ceremony for his new Commerce Secretary William Verity. Indeed the Labor Department reported earlier this month that unemployment among American workers had fallen to an eight-year low of 5.9 pct in September compared to seven pct a year ago and a Post World War Two peak of 10.7 pct in December 1982. But with interest rates climbing steadily and no improvement in the record U.S. trade deficit with the rest of the world a number of economic experts have expressed doubts about the staying power of the current expansion. Warnings of economic danger around the corner have been a staple of Democratic campaign speeches this year. And Democratic party leaders here for an organizational meeting two weeks ago predicted at that time that the economy would be the determining factor in next years election. The 1988 election will be decided as most peacetime elections are on economic issues said Michigan party chairman Richard Weiner. In Ohio people are uneasy. They want to know where the economy is going added Ohio Democratic leader James Ruvulo. American political history is replete with examples of voters throwing out incumbent officeholders when the economy turns sour -- most notably in 1932 when Democrat Franklin Roosevelt won a landslide triumph that ended 12 years of Republican rule and made the Democrats the nations majority party for more than 40 years. But political experts said that if Mondays stock decline turns out to be a temporary phenomena it will have no effect on the 1988 election. Times change conditions change Schneider said. Quoting legendary baseball manager Casey Stengel Schneider added Never make predictions especially about the future. Reuter | STOCK MARKET'S FALL MAY BE BAD OMEN FOR REPUBLICANS |
Stock market analysts polled before Tokyos market opened on Tuesday said Wall Streets dramatic fall on Monday was overdone and although Tokyo would fall drastically at the opening it might stabilise later. Factors affecting the Tokyo market are not the same as those in New York they said. Tokyos market is completely different from New York said a senior analyst at Nomura Securities. We have no computer (program) selling and much more stable share ownership than in New York. The discount rate in Japan cannot rise the senior Nomura analyst said. He said the Tokyo Exchanges 225-share index may fall 1000 points on Tuesday because of basic concern. It dropped 620.18 points to 25746.56 on Monday. But he said a 1000 point fall would be nothing compared to New York. New York overreacted the dollar is rising -- that should be a positive sign for New York he said. The Tokyo Stock Exchange opens from 0900 local time (0000 GMT) to 1500 local (0600 GMT). The Dow Jones Industrial Average fell 508 points (or 22.5 pct) to 1738 on Monday its biggest ever one day decline in both absolute and percentage terms. Simon Smithson a Kleinwort Benson International share analyst said Tokyos market was likely to free fall in morning trading but perhaps would stabilise later. He too predicted a drop of perhaps 1000 points in the index today. But he said overall economic conditions in the U.S. And Japan were different. The problems that pushed down the New York market like the (U.S.) budget deficit trade deficit and slow economic growth do not exist in Japan Smithson said. However a stocks fund manager at a major trust bank made a more gloomy prediction. The situation is different in the two markets but you cannot ignore New York he said. Foreigners will be selling and the index funds will be selling he said. A fund manager at another Japanese trust bank said Mondays New York fall was completely out of the range of expectations. All we can do is wait now and see what happens. There seem to be no factors which would stop the fall. There is no way we can invest now he said. REUTER | TOKYO BROKERS SEE SHARP EARLY STOCK PRICE FALL |
Dollar opens sharply higher in Tokyo at 143.55 yen (Monday close 141.35) |
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Chase Manhattan Corp (CMB) president Thomas Labrecque said the sharp decline in the stock market was not justified by economic conditions and there was a need for perspective by investors on fundamental economic conditions. If we are right about the fundamentals this thing should settle down Labrecque said at a news conference at the American Bankers Associatioon annual convention here. Labrecque also said the stock market drop could cause U.S. monetary officials to ease credit policies. Inflation fears are exaggerated and Chase still believes inflation will not rise much beyond five percent this year Labrecque said. He said strong economic conditions would permit growth to continue well into 1988. I dont think the stock market will cause a recession Labrecque said. He said he could not estimate what the impact on Chase from the stock market fall would be. Chases stock price however dropped 23 pct but other money center banks suffered even sharper losses. Referring to the banking industry he said: Were talking about one day. These are strong institutions he said. Labrecque said he did not think the Federal Reserve Board would tighten monetary policy in view of the stock markets behavior. If there is a bias I expect it would be a little bit the other way he said. Labrecque said the high U.S. budget deficit was not the single most important factor behind the markets worries. He called for closer cooperation in economic policy by the United States West Germany Japan and Britain. Reuter | CHASE'S LABRECQUE SAYS STOCK DROP UNWARRANTED |
British foreign secretary Sir Geoffrey Howe told his EC colleagues on Monday that Britain wants agreement by December on a detailed plan to curb EC farm spending if it is to sanction an increase in EC budgetary resources. British diplomatic sources quoted Howe as saying that an accord containing detailed figures and involving immediate penalties for farmers in the case of overproduction must be reached in advance of an EC heads of government summit meeting in December. We require numbers as well as words in all the commodity regimes Howe was quoted as saying. The EC Commission proposed last month a plan for budgetary stabilisers under which there would be reductions in guaranteed prices restrictions of sales into intervention or increases in coresponsibility levies if output of individual commodities exceeded certain levels. Britain has so far given the clearest backing to the idea although several other EC states back it in outline. Diplomats say Britain can exercise some leverage on the issue because the EC is in a severe budgetary crisis from which it can only emerge if all 12 member states agree to revise the system by which it is financed. The sources quoted Howe as saying: An interim or partial solution covering some elements of the Commission package would be unacceptable to the United Kingdom. They said he insisted that any penalties imposed on farmers for exceeding production limits must take effect in the same marketing year as the overproduction rather than resulting in a price adjustment the following year. Howe also said there should be no question of a special fund which could top up EC farm coffers in the event of an unexpected development such as a major fall in the value of the dollar. The Commission has suggested such a fund to deal with emergency situations. French EC affairs minister Bernard Bosson told journalists that his country could not accept the idea that there should be no emergency reserve. The British position has become tougher he said. Howe was speaking at a meeting of EC foreign ministers which discussed the future of EC finances and which took place simultaneously with a farm ministers meeting to consider the Commissions farm spending proposals. Before his meeting got under way British agriculture minister John MacGregor said he backed the Commission proposal to set the 1988 cereals production ceiling at 155 mln tonnes. Reuter | BRITAIN TAKES STRONG LINE ON EC FARM BUDGET PLAN |
Trade Representative Clayton Yeutter said on Monday that the U.S. free trade agreements with Canada and Israel should help to pave the way for liberalizing the global trading system. He said the Canadian and Israeli pacts will not set back worldwide reform efforts under the General Agreement on Tariffs and Trade (GATT) as some critics feared but help them. The GATT talks began a year ago in Punta del Este Uruguay to liberalize the global trading system and to include in it trade in agriculture and services such as banking. Yeutter made his remarks at a U.S.-Israeli trade meeting marking the second year of their bilateral accord. The Canadian-U.S. pact signed by two sides two weeks ago has yet been approved by the U.S. Congress and Canadian Parliament. The two free trade agreements (FTA) would gradually remove tariffs and other barriers to cross-border trade in goods and many services. Yeutter said in the aftermath of the Canadian and Israeli pacts other countries have realized that if they want to continue to have access to the worlds largest market they had better get serious about improving the GATT. The pact with Israel he said is gradually increasing shipments both ways and the Canadian pact will substantially increase the gross national products in both countries. Yeutter also said the Canadian and Israeli pacts should serve as important precedents for progress in GATT. Yeutter said increasing trade is one of the keys to enhanced political and economic stability around the globe. He said a stronger GATT will enhance prosperity not only for advanced industrial nations but also for other countries that need to increase trade in order to better their standards of living. Yeutter added it was important not to risk the progress made in the Israeli and Canadian trade pacts by resorting to protectionism. He was referring to trade legislation pending in Congress that would force the United States to take retaliatory actions against nations with large trade surpluses with the United States if the countries practiced unfair trade. The legislation was prompted by a growing U.S. trade deficit that hit 156 billion dlrs last year and is still rising. Yeutter said the pressures for Congress to act were hard to resist but the pending legislation would undermine President Reagans efforts to liberalize the world trade. Yeutter renewed the threat of a White House veto. He said President Reagan will veto any bill that contains serious flaws and I believe that veto would be sustained. Reuter | US SAYS CANADIAN, ISRAELI PACTS SHOULD SPUR TRADE |
EC agriculture ministers attacked plans to penalise farmers immediately it becomes clear that cereals output is above standard norms EC sources said. They said this was the major criticism raised at a meeting of ministers which discussed Commission proposals for curbing spending on the cereals regime. The Commission wants powers to cut guaranteed prices or raise the coresponsibility levy if output next harvest rises above 155 mln tonnes. The sources said several ministers complained that changing price levels in the middle of a season would severely damage the financial security of farmers. But an EC Commission spokesman said farm commissioner Frans Andriessen told them producers could not be guaranteed security regardless of market circumstances. The sources said there was a general acceptance of the need for some output ceilings. However the French and Dutch ministers called for a maximum output for a wider range of cereal crops rather than for cereals alone. The sources added West Germany wanted production ceilings for individual countries with excess production being paid for from national exchequers but received no support for this idea. British farm minister John MacGregor told reporters he detected more support for his position against the penalties on farmers being administered through higher coresponsibility levies. He said he believes increasing the levies would do nothing to increase EC cereals consumption whereas lower prices for farmers could help in this direction. Reuter | EC STATES ATTACK PLAN TO PENALISE FARMERS |
Wall Streets biggest one-day drop since 1914 has revived a bitter debate about whether modern investment techniques turn shifts in investor psychology into colossal moves in share prices. The market has gotten away from the players said Dudley Eppel vice president-equity trading at Donaldson Lufkin and Jenrette Securities Corp. He says stock index futures and options have distorted the investment process. But Wall Street professionals who work with index futures and options insist the blame is misplaced. Fischer Black head of the trading and arbitrage division at Goldman Sachs and Co says so-called program trading strategies involving opposite positions in futures on stock indices and the underlying stocks deserve almost no blame for todays decline. People have changed their minds about the future of the economy he said. Another strategy known as portfolio insurance may have exagerated the decline to a small degree said Black. Eli Wachtel of Bear Stearns and Co was emphatic. I do not believe the drop was precipitated by portfolio insurance or expanded by program trading. The only thing that will stop it in the end is the value investor who comes in and says IBM still sells computers and buys for traditional reasons said Jeffrey Miller of Miller Tabak Hirsch and Co. IBM <IBM> fell 31 to 104 as the Dow Jones Industrial Average dropped more than 500 points. Several years ago Millers firm was one of the first to pursue program trading strategies seeking to lock in an automatic profit by taking advantage of discrepancies in the prices of the futures and the underlying stocks. But he said his firm has not been involved in that since late last year. Miller said some investors who were burned in the recent market declines may have miscalculated the effects of portfolio insurance. He estimated 70 to 80 billion dlrs in invested funds prior to the decline were hedged with futures. The way portfolio insurance is used Miller said investors at the time they protect their portfolios commit themselves to a future course of action such as buying a put option. While negative news such as trade deficits and budget deficits build for months the put options tend to be crowded into a narrow span of time because they are executed as the market starts to fall. Miller said at present people can only guess how much portfolio insurance is in use. He suggested some system of disclosure could put other investors on guard that the seeds were being planted that might add to a future decline. But in any case Miller argued that index futures and options do not initiate market trends. People like Eppel of Donaldson Lufkin and Jenrette were steadfast in their criticism. If I had my way there wouldnt be any index futures he said. They propelled the market up when nothing was going on and now were paying the price. Another irate trader referring to IBMs 31 point drop complained what announcement did IBM make over the weekend that made its stock drop 31 points? IBM was as high as 175-7/8 earlier this year. Some economists agreed that the stock market could be sending signals about the economy. Allen Sinai chief economist for Shearson Lehman Brothers told Reuters the 508 point decline represented a crisis of confidence. This is a a bona-fide financial crisis. The market is showing panic. I suspect there is a wholesale deserting of our markets by a lot of foreign investors. Sinai said the crisis was caused by continuing U.S. budget and trade deficits and by rising interest rates. This is not a signal of the start of a recession but a strong indicator that one is coming if nothing is done in Washington to deal with the budget and trade deficits Sinai said. Some market participants said redemptions by investors who own mutual funds fueled the decline. But Steve Norwitz a spokesman for T. Rowe Price Associates a Baltimore-based investment management firm said redemptions and switches into money market funds by Prices one mln accounts amounted to less than two pct of assets. Its not a rout by any means. Norwitz said the company normally receives about 3500 telephone inquiries from its customers each day. On Friday he said when the Dow index fell 108 points the volme of calls rose to around 7000 and today it exceeded that although he did not have a precise number. Ike Kerridge an economist with the oilfield service firm Baker Hughes Inc. was one of several analysts who said the evaporation of billions of dollars of paper profits could alter consumer behavior. This could be the trigger for a national recession which would be very unusual in an election year Kerridge said. Reuter | U.S. STOCK DECLINE RENEWS DEBATE ABOUT FUTURES |
News of a meeting between U.S. Treasury Secretary James Baker and West German Finance Minister Gerhard Stoltenberg on Monday soothed currency markets allowing the dollar to recoup much of the days losses dealers said. News of the meeting which took place in Frankfurt in great secrecy came after the dollar fell sharply on criticism by Baker of West German monetary policy which had provoked fears that the Louvre pact on currency stability was in jeopardy. The dollar reacted immediately to the news rising over two pfennigs in after hours New York trading dealers there said. The announcement of the meeting also attended by Bundesbank President Karl Otto Poehl was made simultaneously in Bonn and Washington timed for after the closure of New York markets. Baker Stoltenberg and Poehl agreed to pursue the policies accepted under the February Louvre accord a finance ministry spokesman in Bonn said. The dollar rose to 1.7970/90 marks from New Yorks close of 1.7730/40. It had closed there on Friday at 1.7975/85 marks. The dollar had tumbled nearly three pfennigs as the market reacted to Bakers criticism of rising West German interest rates and stock markets crashed worldwide. Baker had said that West Germany was apparently breaching the Louvre accord. Under the accord leading industrial democracies pledged to coordinate economic policies to foster currency stability with the surplus countries West Germany and Japan stimulating their economies and the U.S. promising to cut its budget deficit. West German government sources said rising West German money market rates could not be seen as a breach of the Louvre pact. They were rather a direct reaction to higher interest rates in the United States. U.S. Bond yields have been rising since May on inflationary fears and in early September the Fed raised the discount rate to 6.00 pct from 5.50. German yields have also risen over this period but less markedly and since late September the Bundesbank has nudged up short-term rates by changing the terms on its security repurchase pacts its principal instrument for steering the money market. The allocation rate on the last facility was 3.85 pct compared with 3.60 pct. This was partly due to West Germanys inability to uncouple itself from U.S. interest rate trends but also reflected concern among monetary conservatives in the Bundesbank central bank council about excessive monetary growth which raised fears of domestically produced inflation bank economists said. This monetary tightening reflected a switch from the pragmatic line pursued by Bundesbank President Karl Otto Poehl since early this year to stabilise the mark externally to the more cautious approach of Vice President Helmut Schlesinger. In an apparent gesture to Baker coinciding with his visit the Bundesbank repeatedly added money market liquidity this morning. Dealers said this was clearly a move to appease U.S. anger over the most recent West German interest rate rises. They (the Bundesbank) just dont want to come too much under American fire said Chris Zwermann currency adviser at Swiss Bank Corp here. It seems to me that this is the Bundesbank beating quite a significant retreat from its position added Giles Keating economist at Credit Suisse First Boston Ltd in London. The significance that retreat will emerge from the terms of the Bundesbanks next tender for a securities repurchase pact on Tuesday and its result on Wednesday money market economists said. Todays injection of liquidity shows that the Bundesbank does not want a further strong rise in the tender allocation rate which is likely to turn out at between 3.80 and 3.90 pct little changed from the 3.85 pct on the last facility. The Bundesbank and Finance Ministry had given no indication that the meeting would take place although the Finance Ministry spokesman said it had been arranged last week. Earlier on Monday the Finance Ministry spokesman asked to comment on the apparent U.S.-German clash over the Louvre accord went no further than quoting Stoltenberg as saying he assumed monetary cooperation would continue. The spokesman said he believed Baker had already left West Germany for Sweden on Monday. This week he is also due to visit Denmark and Belgium. Reuter | BAKER/STOLTENBERG MEETING SOOTHES MARKETS |
Dwindling global crude oil reserves and the lack of any major new discoveries in recent years will send the world into an energy crisis by 1990 the former Atlantic Richfield Co chairman Robert O. Anderson said. Its going to come sooner than anyone thinks Anderson told reporters after addressing a Houston business lunch. I believe were going to see a change in the world oil markets in two to three years because oil is becoming harder to find. Anderson who retired from Arco last year to form Hondo Oil and Gas Co said world oil consumption is approaching 60 mln barrels a day but a current excess capacity cushion of about 4.5 mln barrels a day will rapidly disappear. If you looked around the world you could not scrape up one mln barrels a day in shut-in production outside the Middle East he said. Were soon going to be right back where we were in 1973 and 1979. Anderson predicted that world oil prices would end 1987 at about 24 dlrs a barrel and continue a gradual climb. Theres no way prices can stay flat because there isnt enough supply he said. There have been no major oil discoveries for the past 15 to 20 years. Alaskas Prudhoe Bay oil reserves the last major world discovery has already produced about five billion barrels of oil or more than half of its estimated reserves he said. Reuter | EX-ARCO <ARC> CHIEF SEES ENERGY CRISIS BY 1990 |
Economist Ravi Batra whose book warning of a crash on Wall Street has been a best seller all summer said Mondays record-breaking market drop was no reason to panic. I think (investors) should stay in the market. Dont panic. The time to panic is two years from now Batra a professor at Southern Methodist University told Reuters by telephone from Pittsburgh where he was to deliver a lecture at Rockwell International Corp. Batras book The Great Depression of 1990 predicts that the increasing concentration of U.S. wealth will lead to a depression. He said Mondays 508-point drop was set off by last weeks news of the trade deficit and other things that added to the total jitters. However he called the fall a mini-crash due in part to a change in peoples attitude to the market. In the 1920s people thought the market would never come down he said But today people think it will come down at some point and therefore when it does everyone wants to get out. It turns a mini-crash into a maxi-crash he said but added that he did not see it falling any further. He said he expects the government to announce by the end of the week an agreement with Japan and West Germany to bring interest rates down. Once (interest rates) come down the market will calm down he said adding the government had other options such as acting on program trading that it might be able to use to stabilize the market. But in two years time the government will run out of options he added. Reuter | ECONOMIST BATRA SEES NO REASON TO PANIC |
Brazil will only lift the partial moratorium on its 113-billion-dlr foreign debt after an accord is reached with the private banks the Finance Ministry said in a statement. The statement said such agreement currently being negotiated must place the debt within the terms proposed by Brazil on September 25. Brazil proposed to the private creditors a refinancing of the interest on its foreign debt that have expired or will expire up to 1989 totalling an overall 10.4 billion dlrs. Brazil also proposed the end of spreads and conversion into bonds of part of the 70-billion dlrs owed to private banks. Brazil in February stopped interest payments on about 68 billion dlrs owed to private banks and the Ministry statement issued on Monday said this would only be lifted when an accord is reached. The statement said that a token payment which banks want from the Brazil as a condition to discuss an agreement will only be made when there is a major progress in the negotiations. Meanwhile a World Bank mission arrived on Monday to analyse the performance of the Brazilian economy after the new plan launched in July by Finance Minister Luiz Carlos Bresser Pereira. Reuter | BRAZIL WILL LIFT MORATORIUM ONLY AFTER BANK PACT |
The discovery of a fertile female Mediterranean fruit fly in a backyard apple tree may lead to aerial spraying in Orange County California State Department of Agriculture officials said. California Department of Agriculture spokeswoman Gera Curry said more than 1700 traps have been set in an 80-square mile area around the Westminster neighborhood following the discovery. The fly was found in a trap routinely checked by agriculture officials. Curry said if aerial spraying is used it would be one-time spray unlike the nightly sprayings used in 1980. Reuter | FEMALE FRUIT FLY MAY LEAD TO CALIFORNIA SPRAYING |
Active Japanese investment in U.S. real estate will continue despite a weak dollar because such investments are strong hedges against inflation financiers and real estate industry experts said. Addressing a conference on Japanese investment in U.S. real estate Setsuya Tabuchi chairman of Nomura Securities Co Ltd said Japanese investors are extremely cautious about investing in Treasury securities because of currency losses suffered in the past during the dollars sharp decline. But he added Real estate is a hedge against inflation so such investment will not decline. Japanese total investment in U.S. real estate last year is estimated at around six billion dlrs exceeding the four billion dlrs ploughed into U.S. equities Arther Mitchell of Coudert Brothers a U.S. law firm told the conference. Adding in financing of real estate projects by Japanese banks and leasing companies the total aamount of Japanese funds committed to U.S. real estate projects could reach 20 billion dlrs in 1987 he said. The dollars fall has made U.S. property cheap and exchange risks are low because many Japanese firms are making investments projected on a dollar/yen rate of 120-130 he said. Panelists at the conference said Japanese are now looking at a wider variety of real estate investments including development projects and suburban buildings. Benjamin Lambert chairman of Eastdil Realty Inc said the sale of 50 pct of the company to Nomura last year was designed to expand its customer base to Japan through the securities houses close ties with Japanese investors. Participation in mortgage loans is becoming popular among Japanese panelists said. Mortgages can be made to disguise active purchases and years later the loans can be converted into ownership of the property they said. Reuter | JAPAN TO KEEP BUYING U.S. REAL ESTATE ACTIVELY |
Shr 46 cts vs 50 cts Net 10.9 mln vs 12.0 mln Revs 105.2 mln vs 100.0 mln Note: Canadian Marconi Co qtly figures unavailable. Reuter | CANADIAN MARCONI <CMW.TO> SIX MTHS SEPT 30 NET |
Cheyenne Software Inc said it intends to distribute to its shareholders rights to buy common shares of its F.A. Computer Technologies Inc subsidiary on the basis of one sahre of F.A. stock for every two shares of Cheyenne stock owned. Reuter | CHEYENNE <CHEY.O> TO DISTRIBUTE RIGHTS |
Gabelli Equity Trust Inc said it intends to repurchase up to one mln shares of its common in the open market or in privately negotiated transactions as its shares are trading at a discount of more than 10 pct from net asset value. There are currently 44.0 mln shares outstanding. Gabellis board had previously granted authority for the stock repurchase. Reuter | GABELLI EQUITY <GAB> TO BUY BACK SHARES |
CityFed Financial Corp said it will from time to time make open market purchases of its common stock for an amount not to exceed one mln dlrs. The shares will be held by the company as treasury stock. CityFed also said that its City Federal Savings Bank unit will be acquiring additional shares for the units employee stock ownership trust. The additional purchase by the employee stock trust will be funded by a loan up to five mln dlrs. At the current stock price of 5.50 dlr to 6.50 dlrs CityFed and the trust will be able to purchase about 950000 additional shares or about five pct of shares outstanding. Reuter | CITFED <CTYF.O> TO MAKE OPEN MARKET PURCHASES |
Venezuela will back Ecuadors bid to raise its OPEC quota above 221000 barrels per day (bpd) because it is a justifiable demand Venezuelan Energy Minister Arturo Hernandez Grisanti said on Monday. He told reporters the country deserved a higher quota in compensation for the five months it was forced to suspend oil production when its main pipeline was destroyed by an earthquake last March. For this five-month period Ecuador did not exercise its right to produce 221000 bpd he said. We should recognize Ecuadors right to increase its quota ... There is a basis of justice in that countrys petition. He added however the quota increase should be gradual to avoid harming the market he added. Hernandez Grisanti said he understood Ecuador would formally submit the request for a higher quota at the next ministerial conference of the Organization of Petroleum Exporting Countries (OPEC) opening December 9 in Vienna. Reuter | VENEZUELA BACKS INCREASE IN ECUADOR OPEC QUOTA |
Shr profit 1.07 dlrs vs loss 1.19 dlrs Net profit 3326000 vs loss 3446000 Nine mths Net profit 9714000 vs profit 3665000 NOTE: Latest and prior nine month per share amounts not given. Reuter | CAPITOL BANCORP <CAPB.O> 3RD QTR NET |
NYSE REPORTS PRELIMINARY DOW CLOSING AT 1738.41, OFF 508.32, LARGEST IN HISTORY |
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The United States invoked the right of self-defense in destroying an Iranian oil platform in the Gulf the American delegation told the United Nations. Lieutenant General Vernon Walters sent letters about the incident to Security Council President Maurizio Bucci the delegate of Italy and Secretary General Javier Perez de Cuellar. U.N. press secretary Francois Giuliani said the Secretary General had no comment on the attack which followed his appeal last Friday for restraint in the crisis while he pursued efforts to obtain a ceasefire between Iran and Iraq. In his explanation Walters said the United States took defensive action in response to an Iranian attack against American ships in the Gulf. He cited an Iranian Silkworm missile strike last Friday in Kuwait waters against the United States-flag ship Sea Isle City. Walters said that military forces on the destroyed Iranian platform had engaged in a variety of actions against United States-flag and other nonbelligerent vessels and planes. In accordance with Article 51 of the United Nations (Charter) I wish on behalf of my government to report that United States forces have exercised the inherent right of self-defense under internation law by taking defensive action in response to attacks by . . . Iran against United States vessels in the Gulf Walters said. Members of the Security Council met behind closed doors on Monday to discuss developments in the Gulf war but no statement was issued afterwards. Reuter | U.S., AT U.N., CLAIMS SELF-DEFENSE FOR GULF ATTACK |
France voiced its comprehension for a U.S. Attack on an Iranian target while calling for a swift halt to the Gulf War to avoid further escalation. The French authorities reaffirm their attachment to the freedom and security of navigation and to the right of all states to take action under international law and the United Nations charter to halt attacks such as that of October 16 the Foreign Ministry spokesman said in a statement. The United States said its forces destroyed an Iranian oil platform in the Gulf and struck at a second on Monday in retaliation for a recent Iranian missile attack on a U.S.-flagged Kuwaiti ship. Washington said the platforms were used to monitor shipping and to launch small-boat attacks on shipping. The French statement described the target as an Iranian military platform. But the French statement added that everything must be done now to avoid that these military developments lead to a new escalation of the conflict. Reuter | FRANCE SAYS U.S. HAD RIGHT TO STRIKE |
Shr loss 1.73 dlrs vs nil Net loss 16.3 mln vs profit 2206000 Sales 69.1 mln vs 29.1 mln Note: per share is after payment of preferred dividends. Reuter | <POTASH CO OF AMERICA INC> NINE MTHS LOSS |
Granges Exploration Ltd filed with the Securities and Exchange Commission for a proposed offering of up to 2500000 shares of common stock. PaineWebber Inc and Drexel Burnham Lambert Inc will act as underwriters for the proposed offering Granges said. Proceeds from the offering will be used to acquire shares of its Hycroft Resources and Development Corp subsidiary and as working capital to fund exploration development and acquisitions of additional mining properties. Reuter | GRANGES <GXL> FILES FOR COMMON STOCK OFFERING |
Shr 22 cts vs 20 cts Net 4033000 vs 3398000 Sales 125.3 mln vs 99.1 mln Avg shrs 18.4 mln vs 17.5 mln Nine mths Shr 89 cts vs 78 cts Net 15.9 mln vs 13.6 mln Sales 413.7 mln vs 345.0 mln Avg shrs 17.8 mln vs 17.5 mln NOTE:1987 3rd qtr per share reflects issuance of two mln shares in initial public offering. 1986 nine mth results include extraordinary gain of 3843000 dlrs or 22 cts Reuter | JEPSON CORP <JEPS.O> 3RD QTR NET |
Cardiac Control Systems Inc said it entered into a marketing agreement with a Japanese firm to distribute Cardiacs pacemakers in Japan. Cardiac said the agreement requires the Japanese firm to purchase certain minimum quantities of pacemakers annually over the next three years with the aggregate value of purchases of about 12 mln dlrs. Cardiac said it received an initial order from the Japanese company which is did not name for about 2.2 mln dlrs and expects to begin shipments during its fourth quarter to end March 31 1988. Reuter | CARDIAC CONTROL <CCSC.O> IN MARKETING PACT |
Fifth Third Bancorp and <C and H Bancorp> said they reached a preliminary agreement to merge. C and H Bancorp has assets of 257 mln dlrs and is the parent company of Citizens Heritage Bank N.A. The companies said the agreement calls for each of the about one mln shares of C and H Bancorp to be exchanged for one share of Fifth Third Bancorp. Based on its financial expectations Fifth Third said the dilution in per share earnings for the merger will be negligible. Reuter | FIFTH THIRD <FITB.O> TO MERGE WITH C AND H |
Shr 25 cts vs NA Net 3081000 vs 2063000 Nine mths Shr 86 cts vs NA Net 10.5 mln vs 6966000 NOTE: Year-ago per share amounts not available as bank converted to stock ownership August 13 1986. 1987 amounts include operations of Burgdoff Realtors acquired during December 1986 and other operations. Reuter | BANKING CENTER <TBCX.O> 3RD QTR NET |
National Processing Co INc said it signed a contract with Chrylser Corps Chrysler Financial Corp unit to process its loan payment trasactions beginning February 1988. Terms werent disclosed. National said that more than four mln transactions are expected to be processed for Chrysler each year under the contract. Reuter | NAT'L PROCESSING <FKYN.O>, CHRYSLER <C> IN PACT |
American lawmakers rallied behind President Reagan for the U.S. strike against Iranian targets in the Gulf but the attack fueled a sharp new White House-Congress debate over limits on his powers to make war. The Pentagon announced on Monday that U.S. warships destroyed a non-producing oil platform used for monitoring Gulf ship traffic and military operations and also raided a second Iranian oil rig in retaliation for an earlier Iranian attack on a Kuwaiti ship flying the American flag. Many Democrats who control Congress and Republicans expressed support for the attack and praised it as an appropriate measured response. But Democrats and liberal Republicans voiced new fears that the growing confrontation between Tehran and the United States could erupt into a major war and demanded that Reagan comply with the 1973 War Powers Act which could lead to a pullout of American forces from the waterway. Those who contend the strike was necessary must realize their words are easily construed as a tacit endorsement of war with Iran said Sen Mark Hatfield of Oregon a Republican. Reuter | U.S. LAWMAKERS SUPPORT GULF ACTION |
Saudi Arabias Crown Prince Abdullah bin Abdul Aziz met for an hour with Vice President George Bush on Monday after U.S. naval forces destroyed one Iranian oil platform in the Gulf and raided another. Asked at the start of the meeting how he felt about the attack the Crown Prince who is here on an official visit replied I believe what the United States has done is their responsibility as a superpower. His remark appeared to be an implicit endorsement of the U.S. action which the Pentagon said came in retaliation for last Fridays Iranian missile attack on a U.S.-flagged Kuwaiti tanker. Administration officials said Bush had assured the Crown Prince the United States would stay the course in the Gulf. They said Prince Abdullah who is deputy prime minister of Saudi Arabia and commander of the kingdoms national guard was very supportive of the U.S. role in the strategic waterway. Before meeting with Bush the Crown Prince paid a brief courtesy call on President Reagan. During his stay in Washington he was also scheduled to meet with Deputy Secretary of State John Whitehead Defense Secretary Caspar Weinberger and leaders of the House and Senate foreign policy committees. Reuter | SAUDI CROWN PRINCE MEETS WITH US VICE PRES BUSH |
The U.S. Food and Drug Administration has allowed ICN Pharmaceuticals Inc to resume testing its ribavirin experimental AIDS drug according to ICN. Our safety concerns are not of sufficient magnitude to withhold approval of further clinical studies designed to assess the safety and efficacy of ribavirin the FDA told ICN Chairman Milan Panic in an October 16 letter made public by ICN. An FDA spokesman confirmed the authenticity of the letter. ICNs tests of the drug on humans were blocked last spring after the FDA decided there was insufficient evidence of its effectiveness against two common AIDS-related conditions. The tests had been intended to determine whether ribavirin was effective against AIDS-Related Complex (ARC) and Lymphadenopathy Syndrome or LAS. FDA Commissioner Frank Young disclosed in May however that the agency was investigating suspicious test results submitted by ICN on the antiviral drug. Young said he had personally scolded ICN officials for making exaggerated claims about the drug. In addition a House subcommittee said it was probing ICN for possible trading or financial irregularities. Today the FDA said it was letting ICN test ribavirin for safety and effectiveness in 32 patients with ARC and LAS. Reuter | U.S. FDA LETS ICN <ICN> RESUME TESTING AIDS DRUG |
U.K. Chancellor of the Exchequer Nigel Lawson welcomed on Monday the reaffirmation by the U.S. And West Germany of the Louvre accord aimed at stabilising currencies. His office said Lawson had welcomed the outcome of a meeting between U.S. Treasury Secretary James Baker Bundesbank President Karl Otto Poehl and West German Finance Minister Gerhard Stoltenberg in Frankfurt. After the meeting a Bonn finance ministry spokesman quoted Stoltenberg as saying he was confident that foreign currencies could be stabilised at around current levels. The meeting came after Baker criticised West Germany for increasing key interest rates saying they were not in line with last Februarys Louvre accord. Reuter | LAWSON WELCOMES REAFFIRMATION OF LOUVRE ACCORD |
Shr 28 cts vs 46 cts Net 1634000 vs 2007000 Avg shrs 5850000 vs 4400000 Nine Mths Shr 82 cts vs 1.77 dlrs Net 4788000 vs 7792000 Avg shrs 5850000 vs 4400000 Loans 586.9 mln vs 481.5 mln Deposits 697.4 mln vs 606.2 mln Assets 797.2 mln vs 683.4 mln Note: Full name Sun State Savings and Loan Association. Reuter | SUN STATE SAVINGS <SSSL.O> 3RD QTR NET |
California Water Service Co said its shareholders approved a two-for-one stock split at a special meeting on Monday. The company said the new shares will be mailed on or about October 30 to holders of record October 20. Separately the company said it declared a 37-3/8 cts per share common stock dividend which will be paid on the new shares. The dividend is payable November 14 to holders of record November two the company said. Last quarter California Water paid a dividend of 73-3/4 cts per share. Reuter | CALIFORNIA WATER <CWTR.O> IN STOCK SPLIT |
Shr 2.10 dlrs vs 1.83 dlrs Net 5919000 vs 5168000 Revs 35.0 mln vs 34.3 mln Nine Mths Shr 5.09 dlrs vs 3.55 dlrs Net 14391000 vs 10099000 Revs 88 mln vs 83.7 mln Note: Curent nine mth figures include 2.2 mln dlr or 79 cts per share gain resulting from change in accounting method for unbilled revenues. Reuter | CALIFORNIA WATER SERVICE CO <CWTR.O> 3RD QTR |
The Pacific Stock Exchange closed half an hour early under a pile of unfilled orders on heavy but not record volume of over 11 mln shares Exchange officials said. As traders remained on the floors in San Francisco and Los Angeles madly trying to balance their accounts long after the close Exchange Chairman Maurice Menn told a news conference trading will nevertheless begin on time tomorrow at 0630 Pacific Daylight Time. Menn told reporters the price of a seat on the exchange dropped to 86000 dlrs today from 100100 dlrs a week ago. Menn said the day also saw 134000 options contracts traded compared to a record 202000 contracts last friday. Traders both in Los Angeles and San Francisco said volume was curbed purely by their inability to fill orders and the chaos created by the exchange tape falling hours behind making it nearly impossible to get accurate price readings. If we would have been able to execute the orders we got there would have been 20 mln shares traded said Richard Goforth a partner with Crowell Weedon and Co who trades on the Los Angles floor of the Pacific Exchange. Traders in San Francisco said there were unconfirmed reports that one brokerage house alone turned away orders for 50000 shares they were unable to fill in late trading. The traders and exchange officials said action on the Pacific Exchange did not deviate from that in New York with some early buying giving way to panic selling through the close which left the Dow Jones Industrial Average down a record 508 points. We pretty much mirrored what was going on in New York... they couldnt fill their orders and we knew we couldnt fill them either said Goforth. While traders said they are bracing themselves for a lower opening tomorrow Mann attributed todays dive to panicking young traders and to monetary policy and said the market should still recover. It depends on what the politicians do...Theres no reason it cannot go back. This is an abnormality and there is no justification for this. People are nervous he said. Mann noted he had never seen traders in San Francisco leave on the floor so long after the close. In Los Angeles one office manager commented early in the day it was unusual to see traders on their feet. Usually theyre sitting down studying the market but its moving so fast they dont have a chance he said. In San Francisco about 50 people on the sidewalk outside the jammed lobby of Charles Schwab and Co strained to see the discount brokerage houses large ticker display. I cant believe it mumbled one onlooker. Reuter | PACIFIC EXCHANGE CLOSE BURIED IN UNFILLED ORDERS |
The Great Atlantic and Pacific Tea Co Inc said it withdrew its offer to acquire Delchamps Inc <DLCH.O> for 27 dlrs a share or about 175 mln dlrs which was made earlier this month. Michael Rourke A and P vice president said the company withdrew the offer because Delchamps did not respond favorably to it and because of market conditions. He would not comment on whether A and P would make another offer to acquire Delchamps. Reuter | GREAT ATLANTIC <GAP> WITHDRAWS DECHAMPS BID |
The massive stock market correction on Wall Street will force a decline in Japanese share prices but a decline of similar proportions will not occur due to economic factors said Setsuya Tabuchi chairman of the board of Nomura Securities Co Ltd. There are less inflation worries in Japan and less possibility of interest rate rises Tabuchi told reporters. He also said Japan had a higher savings rate which provided more funds for investment than was the case in other countries. If interest rates rise worldwide Japan may raise the discount rate but the possibility of a Japanese rate increase is smaller than in the U.S. Britain and West Germany Tabuchi said. However he noted that the Nikkei Dow stock index of the Tokyo stock exchange and the Dow Jones Industrial average have moved in tandem in the past four years. The Dow fell 508 points to 1738 on Monday its largest percentage decline since the First World War. The Tokyo index fell 620.18 to 25746.56 on Monday the sixth largest decline on record. Reuter | JAPANESE STOCKS WILL FALL, BUT NOT LIKE WALL ST |
Shr 38 cts vs 52 cts Net 3980000 vs 5524000 Revs 37.4 mln vs 44.8 mln Nine mths Shr 76 cts vs 99 cts Net 7983000 vs 10.5 mln Revs 100.4 mln vs 123.6 mln NOTE: 1987 qtr and nine mths includes loss 9000 dlrs and 432000 dlrs or four cts per share from repurchase and retirment of debt. Reuter | AMERICAN FRUCTOSE CORP <AFC> 3RD QTR NET |
GREAT ATLANTIC AND PACIFIC TEA CO SAID IT WITHDREW ITS OFFER TO BUY DELCHAMPS INC |
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Italian Prime Minister Giovanni Goria told the cabinet on Monday he was worried about the increased tension in the Gulf but said Americas retaliation against Iran had been limited. A statement issued after a cabinet meeting said Goria had been informed by the United States that it would take action against an Iranian target in the Gulf but had not known beforehand that the action would involve an attack on an oil platform. The prime minister expressed his concern over the possible consequences of increased tension in the Gulf at the same time recognizing the limited character of the American military reaction to the attacks it has suffered in the past few days the statement said. Goria said Italys own ships were far from the platform at the time of the attack and the fleet had been advised to follow events with caution. Italy has sent eight ships including three frigates and three minesweepers to the Gulf to protect Italian merchant shipping there. Reuter | ITALY WORRIED AT RISING TENSION AFTER GULF ATTACK |
Standard and Poors Corp said it raised short-term ratings to A-1-plus from A-1 of Kyowa Bank Ltd. S and P cited a steady progress in all major areas of operation over the past few years. The upward trend in profitability partly reflects decreased operating expenses as interest margins have been historically strong S and P added. It said Kyowas capital ratios compare favorably with domestic and international banking peers when some credit is given for a substantial level of hidden reserves. Management appears capable of taking necessary steps to cope with financial deregulation of the domestic market S and P added. Reuter | KYOWA BANK SHORT-TERM RATES UPGRADED BY S/P |
Shr 59 cts vs 27 cts Net 6398000 vs 2979000 Revs 91.0 mln vs 94.1 mln Avg shrs 10.8 mln vs 11.2 mln Nine mths Shr 1.58 dlrs vs 1.06 dlrs Net 17.2 mln vs 12.2 mln Revs 279.7 mln vs 289.1 mln Avg shrs 10.9 mln vs 11.4 mln Reuter | A.H. BELO CORP <BLC> 3RD QTR NET |
Media General Incs chairman D. Tennant Bryant said his family would not sell its controlling share block so it would be impossible for an investor group led by <Giant Group Ltd> to gain control of the company. The investor group which includes Barris Industries <BRRS.O> recently reported that it acquired a 9.8 pct stake of Media Generals class A shares and might seek control. Bryant said the companys class A stock elects only 30 pct of the board with the remaining 70 pct being elected by class B shares two-thirds of which are controlled by the Bryant family trust which has no intention of selling its shares. Reuter | MEDIA GENERAL <MEGA> FAMILY WONT SELL SHARES |
AMCA International said it expects to earn a profit in the fourth quarter which will exceed the third quarter result. The company earned 4.9 mln dlrs in the third quarter against a year earlier loss of 56.2 mln. However after the payment of preferred dividends it lost two cents per share from a loss of 1.79 dlrs per share last year. In the 1986 fourth quarter the company had an operating loss of 4.9 mln dlrs or 98 cents per share. It said its positive outlook was based on expected debt bill reduction and an improved backlog of orders. The company also said its board approved a decision to sell its Manitoba Rolling Mills. It did not elaborate. Reuter | AMCA INTERNATIONAL <AIL> SEES 4TH QTR PROFIT |
U.S. Treasury Secretary James Baker met West German Finance Minister Gerhard Stoltenberg and Bundesbank President Karl Otto Poehl in Frankfurt on Monday a Bonn Finance Ministry spokesman said. After the meeting the spokesman quoted Stoltenberg as saying he was confident that foreign currencies could be stabilised at around current levels. The meeting came after Baker criticised West Germany for increasing short-term money market interest rates. He had said the rise was not in line with the spirit of the Louvre accord aimed at stabilizing the U.S. dollar last February. The meeting had been arranged last week the spokesman said. Baker Stoltenberg and Poehl had agreed to pursue the policies agreed under the Louvre pact with reference to currency stability and monetary policy. Earlier on Monday the Bundesbnak injected liquidity into the West German money market in a move which money market dealers interpreted as an attempt by the West German monetary authority to curb interest rate rises. The spokesman described Mondays talks which he called private as very positive. Reuter | BONN CONFIDENT OF MAINTAINING CURRENCY STABILITY |
U.S. bank executives said if the precipitous fall in the stock market continued it could force banks to demand more collateral on stock loans and hurt consumer borrowing. But the leaders of the American Bankers Association which is holding its annual convention said the drop was probably only temporary and the market would eventually recover because of the strength of the economy. The underlying basics of the economy are still strong Mark Olson president of the ABA the largest U.S. bankers group said. Reuter | U.S. BANKERS WARN OF EXTENDED STOCK MARKET DROP |
Iranian foreign minister ali akbar velayati here on a two-day official visit informed cuban foreign ministry officials on monday on the tense situation in the gulf diplomatic sources said. They said the envoys trip to be followed from tuesday by a visit to nicaragua could be linked to a possible mediation of the non-aligned movement in the seven-year-old iran-iraq war but they ruled out any prominent cuban role in it. Velayati could not be reached for comment on the U.S. Attack on an abandoned iranian oil rig on monday which tehran vowed to avenge. Reuter | IRAN FOREIGN MINISTER TELLS CUBA OF GULF SITUATION |
Shr loss nine cts vs loss 1.03 dlrs Net profit 100000 vs loss 11.6 mln Revs 125.2 mln vs 71.8 mln Nine mths Shr loss 2.46 dlrs vs loss 98 cts Net loss 26.9 mln vs loss 8.5 mln Revs 355.4 mln vs 215.6 mln NOTE: 1987 qtr includes loss 5.9 mln dlrs non-recurring after-tax charges due almost entirely to the companys recent buyout of its Tilden Mine debt obligations. 1987 nine mths includes loss 23.7 mln dlrs pre-tax charge to reduce the carrying value of the companys 17 land drilling rigs. 1987 nine mths includes pre-tax gain 1.2 mln dlrs on sale of uranium reserves. 1986 nine mths includes pre-tax gain 20.6 mln dlrs on sale of iron ore interest in western Australia. Reuter | CLEVELAND-CLIFFS INC <CLF> 3RD QTR NET |
A proposal to require imported tropical oils to be labeled as saturated fats suffered a narrow and possibly debilitating defeat in the U.S. Senate. The Senate Agriculture Committee rejected the proposal by a 10-8 vote virtually snuffing out U.S. soybean producers hopes the plan would be adopted this year. A similar proposal has made no headway in the House. Sen. Tom Harkin (D-Iowa) offered the proposal as an amendment to a farm spending reduction package. I dont see this as a trade issue. I see it as giving American consumers the information they need he said. Proponents of the measure including the American Soybean Association have claimed palm palm kernel and coconut oils are high in saturated fat and can contribute to heart disease. The U.S. soybean industry believes labels indicating tropical oils are high in saturated fats would discourage consumption of the oils imported primarily from Malaysia Indonesia and the Philippines. But Sen. Richard Lugar (R-Ind.) read a letter from U.S. Trade Representative Clayton Yeutter who said the proposal blatantly discriminates against imports would be impossible to defend under international trade law and would harm relations with the Philippines Malaysia and Indonesia. Yeutters letter also said Americans derive most of their saturated fats from meat and dairy products and relatively little from tropical oils. The committee voted largely along party lines with three Democrats joining seven Republicans to oppose the measure. Reuter | US TROPICAL OIL LABELING PLAN SUFFERS DEFEAT |
Morrison Knudsen Corp in its third quarter earnings report released today said that its backlog of uncompleted contracts at Sept 30 stood at 3.8 billion dlrs the third highest level in the companys history. Morrison Knudsen said the backlog was 20 pct above the 3.16 billion dlrs reported at the same time a year ago. Morrison said it also took a 70 mn dlrs charge on the closing of its real estate development operations. It also took a 47 mn dlrs pretax provision for estimated losses on construction mining and shipbuilding projects. Reuter | MORRISON KNUDSEN <MRN> BACKLOG REACHES HIGH |
Shr three cts vs two cts Net 456000 vs 272000 Sales 15 mln vs 14.4 mln Nine mths Shr six cts vs 23 cts Net 992000 vs 3812000 Sales 41.1 mln vs 45.4 mln Order backlog 46 mln vs 24.3 mln Note: 1986 figures include a gain of 2.9 mln dlr or 17 cts a share from life insurance proceeds. Reuter | CADE INDUSTRIES INC <CADE.O> 3RD QTR NET |
U.S. SELLS 3-MO BILLS AT 6.84 PCT, STOP 6.90 PCT, 6-MO 7.21 PCT, STOP 7.25 PCT |
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Oper shr 45 cts vs 42 cts Oper net 33.0 mln vs 31.1 mln Revs 749.8 mln vs 716.5 mln Nine mths Oper shr 1.23 dlrs vs 1.11 dlrs Oper net 91.1 mln vs 81.3 mln Revs 2.2 billion vs 2.1 billion NOTE: Prior nine mths and qtr excludes loss of 2.3 mln dlrs due to discontinued operations. Reuter | ABITIBI-PRICE INC <AIB.TO> 3RD QTR OPER NET |
Standard and Poors Corp said it affirmed at A-1-plus commercial paper of Perkin-Elmer Corp. S and P cited expectations of the firm to show sustained long-term profit improvement after a recent restructuring. After two years of lackluster profitability and cuts in operations activities concentrated in promising product lines and reduced the firms overall cost base S and P noted. It added that cash flow should strengthen due to anticipated improvement in asset management. Balance sheet strength should continue with substantial liquidity and debt to total capital at 22 pct as of July 31 S and P said. Reuter | PERKIN-ELMER <PKN> PAPER AFFIRMED BY S/P |
Gary Associates LP which said previously it may seek control of Gull Inc said it increased its stake in Gull common stock to 388900 shares or 7.7 pct of the total outstanding from a previous figure of approximately 318000 shares or 6.2 pct. In a filing with the Securities and Exchange Commission Gary Associates said it made net purchases of 70900 Gull common shares at 15 dlrs to 18.62 dlrs a share. Gary Associates made no mention of a possible takeover attempt in its report to the SEC. Reuter | PARTNERSHIP INCREASES GULL <GLL> HOLDINGS |
Shr 92 cts vs 91 cts Net 24.1 mln vs 22.7 mln Avg shrs 25.4 mln vs 24.8 mln Nine mths Shr 20 cts vs 2.58 dlrs Net 6028000 vs 62.7 mln Avg shrs 25.4 mln vs 24.3 mln Assets 10.3 billion vs 9.21 billion Deposits 7.10 billion vs 6.32 billion Loans 6.52 billion vs 5.60 billion Reuter | SIGNET BANKING CORP <SBK> 3RD QTR NET |
Unocal Corp said it raised its posted prices for most U.S. grades of crude oil by 50 cts a barrel effective October 16. The move brings the price the company will pay for the U.S. benchmark grade West Texas Intermediate and West Texas Sour to 19 dlrs a barrel. The price was last changed September 9 Unocal said. Reuter | UNOCAL <UCL> RAISES CRUDE OIL POSTED PRICES |
Shr 18 cts vs 14 cts Net 1852000 vs 1488000 Revs 44.7 mln vs 35.9 mln Nine mths Shr 41 cts vs 34 cts Net 4233000 vs 3512000 Revs 123.8 mln vs 98.4 mln NOTE: Full Name is American Management Systems Inc. Reuter | AMERICAN MANAGEMENT SYSTEMS <AMSY.O> 3RD QTR NET |
MEDIA GENERAL SAYS GIANT GROUP, AFFILIATES HAVE 9.8 PCT OF CLASS A COMMON STOCK |
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European Community Commission President Jacques Delors called for a swift convening of a meeting of the G-7 countries following the instability in todays trading on world money and stock markets. He told a press conference here: G-7 should meet discreetly and quickly. Delors said if the dollar were to fall further against the mark to levels around 1.60 the European Monetary System would undergo a test by fire. Delors said the current problems in the markets had been caused by excessive growth in financial trading excessive deregulation and the failure of the fundamentals of the world economy to adapt themselves quickly enough to changing circumstances. He said it was profoundly unjust to blame it on recent increases in West Germany. Reuter | DELORS CALLS FOR G-7 MEETING |