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The Cincinnati Enquirer from Cincinnati, Ohio • Page 35

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Cincinnati, Ohio
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35
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THE CINCINNATI ENQUIRER Commercial real estate Neyer Properties will remodel a building on Beechmont Avenue that housed T.J. Maxx and Service Merchandise. Industry notesB14 Page Worth noting: Pearson unit sold IDG Books Worldwide publisher of Cliffs Notes and the "For Dummies" books, said it will buy Macmillan General Reference USA from the United Kingdom's Pearson Pic. TBNMO Editor: Richard A. Green, 768-8147; Fax: 768-8330 Thursday July 1, 1999 Balancing the boom TRISTATE iUMMARY Stocks ral may os dome re Dow soars The Dow Jones Industrial Average, at 5-minute intervals Wednesday: Inflation control The Federal Reserve uses interest rate increases to ensure that inflation rises at a modest rate.

ina7n unl 11,000 Qgs, -rf'-y JK 10,950 1 10,900 5-fltlrffite saw the Fed first signaled its willingness to raise rates in an effort to hold inflation down. Bank and brokerage stocks were among the first to benefit, as the Fed's future course appeared less punishing than previously feared. J. P. Morgan rose $4.75 to $140.50, the strongest gainer among Dow components.

Analysts were quick to caution that the Fed's neutral bias leaves it plenty of room to impose higher rates if it finds further indications that inflation has crept into the still-booming economy. (Please see MARKETS, Page B15) 6.06 percent late Tuesday. The Fed's Open Market Committee surprised few with the announcement of a quarter-percentage point increase in short-term interest rates. But the committee also returned to what's called a neutral bias on interest rates, which indicates that Fed officials think that they might not need to follow up Wednesday's rate action with additional increases. Traders welcomed the Fed's announcement, hoping for an end to the volatile price swings and sluggish trading that has characterized the market, since mid-May, when tors to new closing highs.

The Standard Poor's 500 Index rose 21.21 to 1372.66, beating its previous record of 1367.56 reached May 13. The Nasdaq Composite Index rose 44.01 to close at 2686.12, eclipsing the previous high of 2652.05 set April 26. "The market got a major relief rally," said John Shaughnessy, chief investment strategist at Advest Inc. Bond prices, battered for weeks by the threat of inflation and higher interest rates, also recovered, sending yields on the 30-year Treasury bond falling to 5.96 percent from The Associated Press and Bloomberg News NEW YORK Stocks soared Wednesday, with some indexes notching record highs, as the Federal Reserve raised interest rates but hinted that a single, modest increase might be all that's needed to quell inflation. The Dow Jones Industrial Average rose 155.45 to close at 10,970.80, rounding out a session that saw the index drop as much as 83 points in morning trading, then pop above 11,000 for the first time since May 14.

Wednesday's rally propelled broader market indica Consumer IlMfTs. t70 Price Index 11 160 "Federal 150 fumtt rata I fWfk 120 i tffij 110 10,850 10,800 10,750 Consumer Price Index 1985100 iViwiitftliTftf 10,700 100 4:00 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 9:30 AM NOON Sources: U.S. Labor Department The Cincinnati Enquirer The Associated Press ousing Mortgage rates rising The average interest rates on home mortgages in Greater Cincinnati have been steadily rising since early February as bond investors grew nervous about Federal Reserve action (mortgage rates closely track bond rates). Wednesday, the Federal Reserve boosted a key interest rate by a quarter-point in an effort to keep the economy from overheating. Weekly rates since June 29, 1998) Why the Fed raised rates fine with 30-year fixed rale i.

on 1 7 80 i mdlUM 7 40 1 7.82 ry Fed action But mortgage rates rising D.DU J1 A 1 1 0 N'D'J1 F1 M'A' M'J 15-year fixed rate 7.60 i Jl" A March 2fJ I i. rr ps i -5 -SZTrff til 'r izzf kin s4 M'A1 1 'J1 A'S'01 N'D'J'F 3-year adjustable rate rr rm a 30-year, fixed-rate mortgage hitting 7.82 percent as of Tuesday, according to a weekly survey of 75 lenders by the Cincinnati Area Board of Realtors, But local real-estate experts said anticipation of the Fed's latest rate increase has been priced into the market for the past month or so, and borrowers have adjusted their behavior to buy. That combined with a high-level of consumer confidence and a strong economy should keep the housing market" vi 7.00 BY JEFF McKINNEY The Cincinnati Enquirer The Federal Reserve's move to raise a key lending rate should not immediately dampen the Tristate's housing business, but local industry executives are taking a careful view for 1999. The Fed on Wednesday raised the rate that banks charge one another for overnight loans one quarter-point to 5 percent. Home builders, Realtors and bankers say that in the short term, the Fed's action won't hurt home sales or hinder 6.90- 1 A 6.80- Brazos sells subsidiary back to original owner Apparel maker Brazos Sportswear Lie, which filed for Chapter 11 bankruptcy protection in January, said Wednesday it has sold its Morning Sun Inc.

subsidiary to its original owner. Sun, based in Tacoma, is the third of seven business divisions Brazos is selling as it raises money to pay off creditors. Bids for the businesses, which also include Sun Sportswear Inc. and Premier Sports Group were due in early June. Brazos already sold its Gulf Coast Sportswear and Red Oak Sportswear divisions.

The company expects to complete the disposition of its remaining units in 60 to 90 days. Hall of Fame honoring 5 at September event Five past and current business leaders will be honored for their achievements Sept. 30 at the Greater Cincinnati Business Hall of Fame dinner and induction ceremony. The event will be presented by Junior Achievement of Greater Cincinnati Inc. and the Cincinnati Museum Center.

The honorees include Albert W. Vontz 80, of Dayton, Ohio, chairman of Heidelberg Distributing and William J. Williams of Anderson Township, chairman of Western-Southern Life Insurance Co. Being honored posthumously: Jacob G. Schmidlapp, Union Savings Trust who died in 1919; Ronald Walker, American Financial Group who died in 1997; and Miles Greenwood, trustee for the Cincinnati Southern Railway, who died in 1885.

The Greater Cincinnati Business Hall of Fame has honored local business leaders since 1991'. For reservations, call 821-7460. Intelliseek gathers $6M in venture capital Intelliseek of Sharonville, developer of the BullsEye search engine that licensed its technologies to Web leader Lycos Inc. in June, has received $6 million in venture capital funding. Nokia Ventures, River Cities Capital Funds and Chrysalis Ventures have agreed to commit the money to pay for sales and marketing initiatives for the BullsEye product line and In-telliseek's InvisibleWeb-Catalogue.

Provident wants to sell more in notes Provident Bank filed this week with regulators to sell up to $1.5 billion of asset-backed notes and certificates. The securities represent interest in a trust that holds mortgages on residential properties, according to a shelf registration filing with the Securities and Exchange Commission (SEC). Provident also has $785 million of securities from a previous filing that remain unsold. That means the company could raise as much as $2,285 billion once the SEC approves the latest filing. American Financial asks to register securities Financial Group Inc.

has filed with the Securities and Exchange Commission (SEC) to sell as much as $450 million of common stock, debt securities and preferred securities. The preferred securities would be issued through a trust, according to a shelf registration filed with the SEC. The Cincinnati-based insurer said it would use proceeds from the securities sales for general corporate purposes, including investment in insurance businesses and the repayment of debt of American Financial and its subsidiaries. A shelf filing lets a company register securities in advance and raise money by taking them "off the shelf when financing needs arise or market conditions are favorable. I I L-U 1 1 1 I 1 J1 F' M'A' M'J IJ'A'S'O'N'D 1-year adjustable rate March 28 6 15 BJT BY VIVIAN MARINO The Associated Press NEW YORK The Federal Reserve slightly raised short-term interest rates Wednesday for the first time in about two years as a preemptive strike against inflation.

A few questions and answers about what happened and how this could impact consumers and the economy: What ex- actly did the ofl.A Fed do? The Federal Open Market Committee, the Fed's policy-making body, decided aftef two days of meetings to increase the federal funds rate, which banks charge each other on over-, night Bans, bfai3uTlr per centage poinUtct. 5ercnt There was no change iri the discount rate, which the Fed charges on its own loans to banks. It stands at 4.5 percent. After taking this action, which had been widely expected, the Fed surprisingly shifted its bias from favoring higher rates to a neutral stance. When was the last time rates were raised? Twenty-seven months ago.

March 25, 1997, the central bank nudged up the fed funds rate, also for the first time in two years, again by a quarter-point, to 5.50 percent from 5.25 percent, to ward off inflation. As recently as last fall, the Fed had been lowering rates, making three quarter-point (Please see Page B15) 575 J' A'S'01 N'O'J' MAMIJ home construction or mortgage lending. But they said that if the nation's central bank pushes up 'A lot of folks are buying because there is a good inventory, and they can get the house in the area Source: Cincinnati Area Board ot Realtors brant for a while. Robert Sib-cy, owner of Sibcy Cline Realtors, one of the city's largest residential real-estate agencies, said a rates two or they want. three more last year as long as rates remain stable or go lower.

Another factor helping sales, he said: more people buying and selling homes, not just refinancing. Even with rates inching up, people will still buy to avoid the risk of higher rates and higher home prices later. "A lot of folks are buying rematns at 8 percent or below, the buyers will be out. Ms. Hoadley, second vice president at PNC Mortgage, Greater Cincinnati's third-largest lender, said her bank remains bullish about the market.

She said borrowers appear to be more concerned when interest rates are volatile, and that has not happened locally. Robert Sibcy, certain num- Sibcy Cline Realtors ber uf PePle on the edge won't qualify times this year, housing activity could take a big hit The Cincinnati EnquirerR. Cosby purchase activity is rising. She said year-to-date home-mortgage lending is up 20 percent at PNC, primarily because tlte bank is focusing more on that market. "Cincinnati has some good inventory, and we've seen some aggressive purchases," Ms.

Hoadley said. Mr. Miller of the Drees Co. said communities where his company builds continue to experience high traffic volume. "A slight (rate) increase periodically should have little impact on the home building industry," Mr.

Miller said. "It's several ones over a steady period you have to watch out for." because there is a good inven- tory, and they can get the "Rates are still relatively low, and we're not seeing a rush house in the area they want, for mortgages as rates rise. But he said other factors, including borrowers' job confidence and individuals' desire to buy their own property, have continued to help drive home sales. Mr. Sibcy, said home sales rose 10-12 percent at his company through June vs.

the first five months of 1998. He predicted sales for 1999 could be significantly higher than before the new millennium. "If we see a quarter-point hike every time the Fed meets, then we're talking a different story," said Jack Miller, vice president of the Drees Co. in Fort Mitchell, the area's largest home builder. Mortgage rates already are up almost a percentage point, compared to a year ago, with the average rate for by people to lock in," Ms.

Hoadley said. Although she noted that mortgage originations nationally are down 40 percent largely because more consumers are refinancing at this time than a year ago home Mr. Sibcy said. And though interest rates have been rising in recent months, Mr. Miller and Dianne Hoadley of PNC Mortgage said they think there's a psychological barrier of 8 percent.

As long as the rate Reach young buyers as individuals, trendspotter says 1:1.: 1 1 the traditional family because Important macrotrends and-true system is foolproof. Listening to Generation valuable force for purchases made by the generation people 1 1 to 22 years old. "Increasingly, young people do not see themselves as part of a group," Ms. Buckingham said. "There is a focus on self-awareness, and that is going to stick around for a long while.

Understanding what's important to these generations is critical for advertisers to effectively market in the future." of divorce. The Generation will be more likely than previous gen-erations to respond to one-to-one marketing and customized apparel. Embracing individualism means the Generation also will be more likely to participate in golf, biking, mountain climbing and extreme sports such as in-line skating or skate boarding. now emerging from the Generation people 23 to 35 years old include home-centered activities like gardening, dinner parties and a desire for partnerships and marriage at an early age, she said. That generation also tends to mistrust people and society, resent baby boomer parents who cling to the past and is influenced by a breakdown of "Nothing replaces talking directly to the young people you want to target," Ms.

Buckingham said. "Nothing replaces talking to individuals." Ms. Rinzler Buckingham, who spoke to clients of North-lich Stolley LaWarre on Wednesday in its Trendspot-ting series that celebrates the agency's 50th anniversary, sees individualism as a driving olds. Spotting opportunities to get more personal with buyers must be a top goal of companies looking to sell products to children and young adults, Ms. Rinzler Buckingham said.

While marketers can read magazines, stare at the television, observe buying habits of youngsters or watch celebrities for trends, one tried- BY JOHN ECKBERG The Cincinnati Enquirer To spot the next big consumer trend among young people, there's no substitute for talking to them. So says Jane Rinzler Buckingham, president of New York-based Youth Intelligence, a firm that tracks trends among 7- to 29-year- DOW JONES INDUSTRIAL AVERAGE TRISTATE MARKET SPOTLIGHT MARKET HIGHLIGHTS MAJOR INDEXES YESTERDAY'S 10,970.80 CLOSE 155.45 15-mlnute Dow Dollar drops against the euro Cintas up 3.2 for third straight gain Cintas Cora, rose S2.06ii. or 1 11,000 10,950 10,900 10,850 10,800 10,750 I High I Low I Close 1 Change 500 1372.93 1338 80 1372.66 21 21 'Sste 79797 777.23 797.93 20.45 Nasdaq 2696 87 2621.06 2685.69 43.58 Composite NYSE 648.20 633.80 648.13 10.14 Composite Clntas Corp. on Wednesday 0 I'll I 67.5 67.0 1 ojoo Jr 3:00 4:00 1:30 PM 9:30 AM 10:30 30-YEAR T-B0ND YIELD 11500 before the announcement and traded at 121.19 yen, up from 121.00. Traders sold dollars for euros after the Fed raised its target for overnight loans between banks a quarter-point to 5 percent.

U.S. three-month dollar deposits already yield about 271 basis points more than those in the euro; that isn't likely to widen if the Fed doesn't raise rates again. "The further impetus to buy dollars has not come," causing some traders to reverse the dollar purchases they made, said Jeremy Fand, a strategist at 6 4 13-week high 6.159 4li.i07.ilj: Bloomberg News NEW YORK The dollar fell against the euro Wednesday after the Federal Reserve suggested that it does not need to raise interest rates any more, capping returns on U.S. deposits. "There could be a little disappointment here" from people who had been expecting the dollar to get a boost from a larger rate increase or from a continued bias toward tightening, said Mike Ivanovitch, president of MSI Global an international investment advisory firm.

'ITie dollar weakened to $1.0345 a euro from $1.0300 almost 3.2 percent, to Wednesday. It marked its third straight day of gains. So far this week, the Mason-based uniform supplier has gained and is about 1 1.4 percent above Friday's closing price of $60.31 u. Wednesday, Cintas was rated "outperform" in new coverage by analyst Chris Gutek at Morgan Stanley Dean Witter. The New York analyst also rated uniform company Services Inc.

as an outperform. Cintas' stock hit a daily high of $68 before closing lower Wednesday. It remains below its 13-week high of $70.75. 13-week low 5 42 66.5 $67.19 66.0 win 65.5 65.0 jnW 64.5 jyjk 64 0jtiiMyiiJMtiii 6.2 60 5 8 5.6 5.4, 5.2 1 10000-fr1 950(1 I I 3-monOi trend YESTERDAY'S CLOSE 5.962 fflilMJ 9000 9:30 1:00 4:00 June May April June May.

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Pages Available:
4,541,326
Years Available:
1841-2024