New Braunfels Herald Zeitung (Newspaper) - March 31, 1985, New Braunfels, Texas
Upbeat quarter ends on quiet note
NEW YORK (AP) — The first quarter of 1985 produced many bright moments in the stock market — including record highs for several market indicators and many individual issues.
As winter gave way to spring on Wall Street, however, investors’ enthusiasm seemed to be waning a bit.
By any measure, the market turned in a strong showing for the quarter. But nearly all of its gains came in the first few weeks of the year.
It will be several weeks before investors know how the nation’s corporations fared in the January-March period. The early in
dications, though, are that there will be plenty of earnings disappointments.
In recent weeks, investors have also been confronted with confusion and volatility in the bond and currency markets. The dollar, after a long bull market in foreign exchange, has lately dropped back in value against other prominent currencies.
The dollar’s decline so far has encouraged some investors to buy stocks of multinational companies, such as drug manufacturers, whose earnings from their foreign business has been hurt by the high value of the dollar.
But analysts say it has also stirred fears that interest rates will rise, because of
reduced demand among international investors for U.S. interest-bearing securities, and that inflation might revive.
In addition, despite all the recent worries that have plagued the stock market, many analysts believe the economy still shows a lot of strength.
“Business is moving ahead with no recession in sight,” said Albert Wojnilower, chief economist at the First Boston Corp., in a quarterly commentary on the investment scene.
After slipping .67 points to 1,266.78 in the past week, the Dow Jones average of 30 industrials finished the first quarter with a net
gain of 55.21 points.
Other readings for the week showed the New York Stock Exchange composite index up 1.42 at 104.60, and the American Stock Exchange market value index up 4.60 at 229.59.
Big Board volume averaged 93.23 million shares a day, against 103.65 million the week before.
Perhaps the most impressive aspect of the market’s first-quarter advance was its breadth. From Jan. I through the close on March 27, Standard & Poor’s Corp. reported, 78 of the stock groups it tracks registered gains, while one was unchanged and just IO
The big winner was the broadcasting group, up 39 percent, thanks to takeover mania engendered by Capital Cities Communications’ plan to acquire American Broadcasting Companies.
In second place were the shares of publicly traded securities brokers, with a 34 percent advance. These issues often move in tandem with the overall stock market.
The list of losers was dominated by cyclical industries, reflecting the worries about a possible business slowdown that periodically afflicted the market.
Japan aggravates U.S. trade concerns
NEW YORK (AP) - While Japan’s decision to import more cars to the United States was expected, the move still generated heated protest on both sides of the Pacific, highlighting the growing friction in U.S.-Japanese relations.
The Japanese government announced it will allow car exports to rise by 450,000 vehicles, or 24 percent, to 2.3 millon in the fiscal year that begins Monday.
Japan’s current “voluntary" restraint limited annual shipments to 1.85 million units. President Reagan had declined to press Japan to retain that quota for another year, clearing the way for Japan's announcement this past week.
And while critics in the United States argued that the new limits set by Japan’s government was hardly a ceiling at all, Japanese automakers were not any happier.
At a time when the United States is screaming that Japan’s markets remain too closed to American products — thereby contributing to the record U.S. trade deficit with Japan — the Japanese automakers complained that their government's decision was another unnecessary restraint to trade.
Takashi Ishihara, president of Nissan Motor Co., said the action might “risk spreading protectionism on a global level and may even undermine the free trade system.’’
The criticism from Ishihara and his colleagues came as U.S. negotiators are trying to convince Japan that if it does not further open its markets, the United States will have no choice but to impose protectionist measures against Japanese imports.
Indeed, the White House was quick to say after Japan’s announcement that it did not think the new auto-export ceiling “should be construed as any tradeoff for U.S. access to their markets in those areas in which we have talks going on.’’
Those markets include telecommunications, medical equipment and pharmaceuticals, electronics and forest products.
The Reagan administration, which so far has tried to talk Japan into buying more U.S. goods, increasingly is finding it has little choice but to protest the actions of its Far East ally.
In other developments this past week:
—The government’s economic weather vane, the Index of leading Economic Indicators, rose 0.7 percent in February following a 1.5 percent increase in the previous month, the Commerce Department said.
—Sales of single-family homes climbed 6 2 percent in February’ after edging lower the month before, the Commerce Department and the Department of Housing and Urban Development said.
—Major U.S. auto manufacturers said their combined mid-March sales rose 5 percent from a year earlier, bolstered by cut-rate financing and other incentives offered by some of the companies.
—General Electric Co. was indicted by a federal grand jury on charges of defrauding the government of about $800,000 on a nuclear warhead system, a charge the defense contractor denied. Irater, GE was suspended by the Air Force from receiving any new contracts.
Some unemployment benefits expire
WASHINGTON (AP) — A federal unemployment benefits program for 339,000 people nationwide expires this week, the third major cut in government aid to the jobless in the past four years.
A House subcommittee has endorsed a bill to extend the federal supplemental compensation benefits program three months after it runs out at midnight next Saturday.
But it appears Congress won’t have enough time to act before the Easter recess, and President Reagan says the program is no longer needed, citing a growing economy and the alternative of job training.
In 1981, the administration pushed through Congress changes that made it more difficult to qualify for participation in another program, a joint state-federal extended benefits plan for the jobless.
Only West Virginia and Alaska, the states with the highest unemployment rates in the nation, are participants today in that extended benefits program, which provides up to 13 weeks of aid after basic state benefits have expired.
Had the old rules still been in effect, at least four other states, and perhaps more, would have been eligible for the program.
In another reduction, officials in at least nine states since 1981 have reduced benefits for the basic state benefits program, which provides up to 26 weeks of aid to the jobless.
“The shrinkage of unemployment insurance ... shows up in the extremely large number of jobless workers who remain without benefits,” concludes a report issued last week by the Center on Budget and Policy Priorities, a nonprofit organization supported by several foundations.
At the low point of the last recession in November 1982, there were 5.9 million unemployed without jobless assistance
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