The Cincinnati Enquirer from Cincinnati, Ohio • Page 17

THE CINCINNATI ENQUIRER WEDNESDAY, DECEMBER 29, 1993 B5 EDITOR: JON TALTON, 768-8477 PORTFOLIO Consumers perk up in December 3900i early for the readings to be totally convinc 3800 i 3700 i 3600 the Conference Board said. The survey supports other evidence of rising economic activity. The Commerce Department said Tuesday that manufacturers and service industries should enjoy their fastest growth in six years during 1994. Fabian Linden, executive director of the Conference Board's Consumer Research Center, said the index "is now at a level historically associated with a reasonably comfortable pace of economic growth." "The level of consumer expectations, which historically has been an impressive indicator of things to come, has chalked up imposing gains in each of the past two months," he said. "While it may still be too direction.

The December results weren't too surprising', coming after news from big retailers that consumers, while very choosy about what they bought, generally were in a mood to spend at Christmas. But some economists questioned the link between improved consumer confidence and an up-tick in spending. The survey, compiled from answers to questionnaires sent to 5,000 households across the country, found consumers were more optimistic than in November about business conditions six months from now. Twice as many consumers are positive about the immediate future as those who are negative, a turnaround from October, ing, they are extremely encouraging. The Conference Board said more survey respondents believed jobs are plentiful, but people with that sentiment remained a minority.

Gary Schlossberg, senior economist at San Wells Fargo said the consumer confidence report is "consistent in what we see in the other data and our forecasts. We seem to be on track for moderate growth." But "these confidence readings aren't consistent with a boom in consumer spending," said Schlossberg. The index tends to confirm trends already in motion. Confidence level rising rapidly The Associated Press NEW YORK Americans grew substantially more upbeat about the economy's future during the month of December, the Conference Board said Tuesday in its monthly survey of consumer sentiment. The business-supported research group said its consumer confidence index jumped 8.3 points to a level of 80.2.

The index, which has a 1985 base of 100, has gained nearly 20 points since October, reflecting renewed optimism about the economy's 3500 15 16 17 20 21 22 23 27 28 Dec. Dow Jones 30 Industrials Daily highs, with closes at arrow tip Cincinnati Stock Exchange volume 4,024,800 Gold's luster fading? Experts predict $400 ceiling Bloomberg Business News 1 NEW YORK Gold soared 16 this year to near its highest levels in three years, but don't expect the same performance in 1994, a panel of experts told the Bloomberg Roundtable. After starting 1993 at a seven-year low $326 an ounce, gold soared to $410. It then plunged back to $343 in August and gradually returned to trade just below $400. Experts expect the metal to be as volatile in 1994 as it was this year, with gold trading above $400 and eventually averaging si around $380 an ounce, as op- posed to this year's average of yZtZl $cSbU.

A drop in aemana as prices rise plus the chance that producers will sell will prevent the metal from staying above $400, the panel said. The Associated Press GACC plan QK'd Bankruptcy court signs off on reorganization BY MEGHAN HENTERLY The Cincinnati Enquirer Great American Communications pre-packaged reorganization plan cleared U.S. Bankruptcy Court in Cincinnati making its debt and preferred stock more manageable, the company said Tuesday. Gregory Thomas, GACC's chief financial officer, said the company now looks forward to a promising 1994. "This reorganization puts the company's capital structure in line with its business," Thomas said.

Controlled by Cincinnati financier Carl H. Lindner American Financial GACC, which owns WKRC-TV (Channel 12) and WKRQ-FM radio in Cincinnati, sought reorganization earlier this year after reporting $560 million in losses in 1992. The plan reduces the debts and preferred stock obligations of GACC and two subsidiaries, GACC Holding Co. and New GACC Holdings from $910 million to $433 million. Annual charges for subsidiaries' interest and preferred stock dividends will drop from more than $94 million to $41 million.

It calls for issuing new GACC stock and 14 notes in exchange for the outstanding debt and preferred stock of the companies. Great American Television Radio bank credit facility and Great American Broadcasting 13 senior subordinated notes were also refinanced. The reorganization ends more than a year of negotiations with creditors to restructure debts Lindner took on in his $1.5 billion acquisition of the former Taft Broadcasting Co. in 1987. But analyst Phelps Hoyt with Duff Phelps Investment Research Co.

in Montpelier, said he expects GACC to refinance the 14 senior extendible pay-in-kind notes initially due 2001. Hoyt said the chances of GACC defaulting on the reorganization within the next two years are less than 5. Great American said the reorganization plan doesn't affect its principal operating unit, Great American Television Radio which runs its six TV and 11 radio stations. Royal Canadian Mint worker in Ottawa examines gold Maple Leaf coins. Investors may buy coins.

I the big commodity funds starting to get involved in gold in a very, very big way," said Milling-Stanley. "They were ultimately responsible for the whole of the move. But it came against this background of much, much stronger fundamentals." Prices crashed in August because China stabilized its currency and introduced an economic austerity program, Milling-Stanley said. But more important, the panel said, prices above $400 weren't sustainable for industrial gold users. iWv pushes to slight gain Bloomberg Business News U.S.

stocks rose Tuesday amid renewed optimism about the economy, sparked by a report that consumer confidence rose in December. Bonds were little changed, while the dollar fell. "The U.S. economy is the strongest in the world right now," said Timothy Connors, who helps oversee almost $3 billion for CoreStates Investment Advisers in Philadelphia. "The strength is translating into higher stock prices." The Dow Jones Industrial Average rose 0.84 to a record 3,793.77, more than 10 points above the day's low of 3780.08.

Dealerships to be sold The Cincinnati Enquirer The Kenwood Dealer Group Inc. will purchase Norath Motor's Pontiac and Subaru dealerships on or about Jan. 3. The dealerships will be renamed Pontiac of Beechmont and Subaru of Beech-mont, according to Mike Molzberger, general sales manager of Kenwood's Saturn dealership at Kings Auto Mall. Molzberger, who will take over as general manager of the Pontiac and Subaru dealerships, said he hopes to add a Saturn dealership at the Beechmont location some time next year.

Realty wins state grant The Cincinnati Enquirer An Over-the-Rhine realty company is one of 11 businesses in Ohio receiving a chunk of $563,300 in economic development grants the Ohio Department of Development is awarding to small businesses and microenterprises. Owning the Realty, Inc. will use its $50,000 grant to establish a laundromat near Findlay Market that will create five jobs, spokeswoman Elaine Hayes said Tuesday. Angstrom offering received The Cincinnati Enquirer Erlanger-based Angstrom Technologies Inc. Tuesday announced the consummation of its public offering of 1.5 million units at a price of $2 each.

Each unit consists of one share of the company's 8 redeemable convertible preferred stock and one class A redeemable common stock, purchase warrant. Angstrom said it received gross proceeds of $3,450,000 before underwriting discounts and commissions and other expenses. North American sells unit Bloomberg Business News A Norfolk Southern Corp. subsidiary Tuesday it agreed to sell its remaining commercial trucking operations to De-Boer completing the company's exit from the market. North American Van Lines a unit of Norfolk Southern, said it will sell North American Freight Systems to privately held DeBoer Inc.

of Blenker, Wis. Terms were not disclosed. North American Van Lines has been selling its truck load operations to concentrate on higher-margin services, such as shipping household goods, said Dennis Koziol, vice president of corporate planning at Fort, Wayne, North American Van Lines. GE unveils China venture Bloomberg Business News GE Lighting said Tuesday it plans to manufacture and sell light bulbs and other lighting products in China for the first time through a joint venture with Shanghai Jiabao Industry and Commerce Co. The General Electric Co.

unit will have a 65 stake, while Jiabao will have a 35 interest in the venture, to be called GE Jiabao Lighting Co. Honda pays pollution fine The Associated Press Honda of America has agreed to pay a $450,000 fine for air pollution from its Ohio auto and motorcycle plants and to reduce pollution over the next three years. The state Environmental Protection Agency said the company admitted it had violated Clean Air Act regulations dealing with fumes from the priming and conditioning of bumper surfaces before painting, from cleaning vehicle bodies after welding and from incinerating wastes. I I Jesuit -1 If Better prices next year "For next year's range, we're probably looking for $340 or $350 at the bottom, and probably as high as $420," said George Milling-Stanley, first vice president of commodity risk at Lehman Brothers. "For next year, I think we're looking for $375" as an average.

"So a little bit better than this year, but not dramatically better." Gold enjoyed renewed interest this year because demand from China soared. Demand grew 36 during the first quarter of 1993, according to the World Gold Council. The jump occurred partly because double-digit growth caused inflation in some Chinese cities to hit 23.3, according to the State Statistics Bureau. The combination of inflation, a plunging currency, and economic growth pushed Chinese demand to unsustainable levels, said Ian MacDonald, precious metals analyst at Credit Suisse. Stronger demand, fewer sales by producers which flooded the market in 1992 and a drop in inventories helped boost the metal, the panel said.

But what sent commodity funds rushing into gold was the purchase in April of a 10 stake in North America's largest gold mining company, Newmont Mining, by the money manager George Soros, the panel said. "Soros getting involved meant that we did see a big increase in general investor interest and of m. HW ,,1 The Associated Press Gold bullion bars are marked with the degree of purity. Industrial users to benefit "I think at those sort of levels it would you would persuade a central bank or two to unload some gold into the market," said MacDonald said. The panel agreed it was industrial users who would stem any significant rise in gold above $400 an ounce.

"The industrial users are resistant. And they're probably much more critical in the jewelry sector than it is in the electronics or dental-alloy sectors," said Jeffrey Christian, managing director at CPM Group, precious metals consultants here. The gold market is volatile, the panel said, because it remains small compared to other commodities. Any large move by a trading firm can move prices sub- "In the late 70s the daily turnover in currency markets and gold markets were roughly equivalent," Christian said. "The gold market really competed for dollars there.

"Today, what you have is the market that is 11000 the size of the currency market in terms of daily turnover In fact, you don't want very many people at all to buy gold because if investors en masse decided they wanted gold, they would destroy the market in short order." stantially. "It's absolutely tiny," said Milling-Stanley. "If a small fraction of the money that went, for example, into other investment avenues in this country alone were put into gold, then you could quadruple the price overnight." Daily turnover in the gold market is on the order of $700 million or $800 million a day, Christian said. By contrast, the interbank foreign exchange market is probably valued at $800 billion, he said. Commerce Dept.

sees 2.9 growth in '94 Auto sales expected to grow 7.5 in 1994 Manufacturing sector rebounding nicely to rise another 5 in 1995 and 3.2 in 1996, before dropping 8 in 1997 because of a cyclical downturn, Randall Miller, a senior industry analyst, said. Rising U.S. auto sales won't mean more jobs in the auto sector, however, because the automakers are producing more with fewer workers, he said. Knight-Ridder Financial News Sales of U.S. autos should rise 7.5 in 1994 to 14.95 million units, as low interest rates continue to unleash pent-up consumer demand, but the gain won't necessarily boost jobs in the auto industry, a Commerce Department official said Tuesday.

U.S. auto sales which grew 8 in 1993 to 13.9 million units are expected expected to show fairly good growth in, 1994." "One of the fastest growing sectors-addressed (in the report) is the U.S. automotive industry," said Jeffrey Garten, commerce undersecretary for international trade. The study projects a 6 rise in unit sales of domestically produced cars and light trucks in 1994. Health care and environmental industries also are expected to help boost growth, but the service-producing sector in general is not expected to grow much faster than in 1993, Commerce said.

While manufacturing is expected to help boost growth in 1994, manufacturing employment is expected to lag. In addition, aerospace and defense industries are expected to continue to contract in 1994. 'r i Knight-Ridder Financial News WASHINGTON A rebounding manufacturing sector is likely to help push the U.S. economy to 2.9 growth in 1994, the Commerce Department said Tuesday in a study of the outlook for major U.S. industries in the coming year.

That's up from an estimate of 2.6 in 1993, the department said. The annual government study pinpointed autos, electronic goods, computers and metal working equipment as among the fastest growing sectors in the U.S. economy in the coming year. Commerce said manufacturing shipments were likely to rise by 2.8 in 1994, i units were started. "In general, interest-sensitive components of spending are expected to provide much of the impetus for overall growth," the study said.

"Consumer purchases of durable goods, producers' durable equipment, and residential investment all are compared with a rise of 2 in 1993 and the fastest growth rate since a 3.4 increase in 1988. Housing is also expected to contribute to growth, with Commerce predicting 1.3 million housing starts in 1994. Through the first 11 months of 1993, 1.19 million.