The Palm Beach Post from West Palm Beach, Florida • Page 19

Markets at a Glance D) 1792.74. 287.81. 23S.55. 371.63. 439.03 .63 3.38 1.48 $347.50 NYSE A8.

138.17 Galnr Unchanged Lotert Volum 181.87 million The Post SATURDAY. MARCH 15. 1986 PAGE A20 1 Dow Closes Hectic ith 39.03 Gain i I DOW 1.89 1028 400 648 week Merck, up 6H at 161 International Paper, up 5 at 64; DuPont, up 4 at 77H, and Philip Morris, up 5H at 119. Philip Morris was strong for the second straight day following an appeals court rating that appeared to lessen the chances that the company might be severely hurt in cigarette product-liability litigation. RJ.

Reynolds Industries, affected by the same news, rose 1 to 42Mi. Notable laggards included leading computer issues such as International Business Machines, which was down at 150, and NEW YORK (AP) Stock prices soared again yesterday, closing out a week of record-breaking gains and trading volume that carried Wall Street bull market to new heights. Analysts said buying was inspired partly by dramatic new evidence of the decline of inflation. The Dow Jones average of 30 industrials jumped 39 03 to 1.792.74, winding up the week with a record advance of 92.91 points. Friday's rise by itself was the third largest ever in points for the average, surpassed only by a 43 41 gain on Nov.

3, 1982 and one of 43 10 last Tuesday. Volume on the New York Stock Exchange came to 181 87 million shares, against 171.48 million in the previous session. Both the New York and American stock exchanges had their busiest weeks ever. The government reported yesterday morning that the producer price index of finished goods fell 1.6 percent in February, taking its largest drop since the Labor Department began compiling it in 1947. Wall Streeters bad been expecting a decline, but not such a large one.

Falling oil prices, as expected, played a large part in the index's showing. Economists also noted, however, that other elements in the index signaled an absence of any significant inflationary pressures. Other government figures, meanwhile, reinforced evidence of a sluggish economy, which would presumably allow room for further declines in interest rates. The Federal Reserve reported a drop of 0.6 percent in industrial production last month. Though the news background was set before the market opened, investors' response to it was anything but uniform.

The Dow Jones industrial average built up a gain of about IS points, slipped back to just a plus-2 reading going into the last hour, and then took off again through the close. Analysts said the late buying spree was partly due to program trading by professional investors taking their cues from activity in stock-index options and futures and concentrating on blue-chip stocks. That produced some striking disparities. In contrast to the outsized gain by the Dow, the overall tally on the NYSE showed a modest 5-3 edge for advancing issues over declines. Gainers among the blue chips included Digital Equipment, unchanged at 168.

In Market Report AcOvtty over thai pact 30 trading day Famous Brands Says Refunds To Begin Soon Bull Market Sets Records; Can It Last? Lagging Indicators Depress Dollar Pott Staff and Wira Raporto 1880 1775 1750 j. 1725 1700 1675 1850 Liaoc NEW YORK The dollar finished lower against all major currencies in worldwide trading yesterday, hitting a seven-year low against the Japanese yen in Tokyo, as the U.S. government furnished fresh evidence of economic weakness. Sales of dollars occurred in response to a Federal Reserve Board report that industrial production dropped 0.6 percent in February, one the worst showings since late 1982 when the economy was still mired in recession. But the sell-off was not overpowering.

Lower U.S. interest rates and the inflation-fighting effect of the Dow Jonas Avaraga 1 High: 1,799.03 Low: 1,745.21 Cloaa: 1,792.74 16O0 1575 1525 I Changa: 39.03 By Chet Currier Tha Assaclafad Prass NEW YORK This is a time of many firsts in the financial world. Stock prices, of course, are setting new highs almost daily, caught up in the biggest advance in modern memory The past week was the busiest ever at the New York and American stock exchanges, as measured by the total number of shares traded. 10 18 24 By Phyllis Wesley Assistant Business Edlter Famous Brands customers who can prove they put down their money but got no goods before the discount appliance stores went out of business may get their first sign of relief within two weeks, a lawyer said. Four Famous Brands stores owned by West Pain) Beach businessman William M.

Lacek were closed in late February, catching employees, customers and creditors by surprise. Lacek's lawyers have begun selling or returning inventory from the stores in West Palm Beach, Lake Park, Delray Beach and Orlando to clear Lacek's debts. Suppliers and manufacturer representatives hauled away most of the inventory from the stores within two days after the stores closed. Ted Jewel, a lawyer with the firm handling Famous Brands' liquidation proceedings in state court, said claim forms will be mailed during the next two weeks to customers of record who are eligible for refunds. He said Doug Wendel, a Palm Beach management consultant, has been appointed receiver for the stores and is overseeing the refund process.

March February Holidays collapse in world petroleum prices are expected to improve economic conditons later this year. "The market didn't react dramatically to the reports." said Dennis Pettit, manager of corporate assets for Banque Paribas in New York. The bond market has staged a rally over the past two years that is "unprecedented in magnitude Analysis Dow Jones Industrials rise 92 points in one week and length," in the words of Salomon Brothers Inc. Maytag Boosts Capital Spending NEWTON, Iowa Appliance maker Maytag Co. announced yesterday it spent a record $30.3 million for capital improvements last year and expects to spend $5 million more than that this year.

Maytag President Daniel J. Krumm said in the report that 1985 was a banner year for the company, with previously announced sales of $683.7 million and earnings of $71.8 million. Shareowners received a record $3.30 in dividends last year and on Dec. 30 the company stock split two-for-one. LTV Said Eager To Get Contract PITTSBURGH Saying it is in critical need of labor cost reductions, LTV Steel Co.

conducted marathon negotiations with the United Steelworkers in hope of settling a contract by Saturday. Chances of meeting the target date were in doubt because of considerable work facing the negotiating however, most economic indicators are flagging industrials soared 92.91 to 1,792.74, breaking the record of 87.46 points it set July 1984. The New York Stock Exchange composite index rose 5.79 to 136.17, and the American Stock Exchange market value index was up 7.76 at 267.81. Big Board volume averaged 176.16 million shares a day, up from 158.74 million the week before. For more than a year now, the performance of the economy has fallen short of expectations.

But many optimists still maintain that it will soon begin to fulfill the promise held out by falling interest rates and a booming stock market. "The prospects for durably low inflation are catapulting bond prices higher," said Robert Barbera, chief economist at E.F. Hutton Co. "Simultaneously, the outlook for economic activity is brightening, raising earnings expectations. "The recent explosive stock market performance reflects this extraordinary environment." Still, the sensation of unreality that can come with unprecedented highs in the market makes some people wary.

"The prospect of lower interest rates and better times ahead is unquestionably a favorable market factor," says Wright Investors' Service, a Bridgeport, investment management firm that is forecasting an "interim correction" in stock prices. The problem is, the firm argues, there is no hard evidence yet to confirm some of the lofty expectations now reflected in stock prices. "Consequently," it concludes, "there is an element of artificiality or superficiality to the current stock market." And as one individual investor who has been active in the market for more than 25 years confided the other day, "For the first time ever, my broker is taking me to lunch." Such are the wonders of a bull market. It seems to radiate a glow that makes all economic news look positive. It defies all the measurements that find stock prices too high.

"It's almost too good to be true," said Alan Shaw, technical analyst at the firm of Smith Barney, Harris Upham Co. "Our bull market continues to move forward relentlessly, like a steamroller, Ignoring any obstacles that might be in its way," observed Heinz Biel at Janney Montgomery Scott Inc. "One doesn't argue with a market like this. You either go along or step aside." Nobody disputes that some day the advance must come to an end. But there is much disagreement over whether the turning point is close at hand or a long, long way in the future.

Certainly, the market cannot keep on indefinitely getting the kind of lift it has received to date from falling interest rates. Since last fall alone, the interest rate on long-term government bonds has come down about 2V4 percentage points to just under 8 percent. It stands to reason that the lower rates go, the less room they have left for future progress. But there is no corresponding limit to the performance of the economy. Many optimists argue that growth in business activity and corporate profits can take over from interest rates as a driving force behind the bull market, and propel it a long way from here.

In the past week, the Dow Jones average of 30 teams, including resolving economic issues. "LTV is enormously anxious to get this thing resolved. LTV is running out of time," a union official said yesterday on condition he not be named. "But it won't happen today. A lot of work has yet to be done." The two sides bargained through the night Thursday, recessed around 9 a.m.

yesterday and agreed to resume later in the day and continue into the weekend if necessary. Any tentative agreement would need the approval of the union's full negotiating committee and the USW's international executive board before being submitted to the rank and file. The ratification process could take several weeks. Jewel said a circuit court judge has approved the refund of deposits to customers who put merchandise on layaway or who had paid for goods that were not delivered before the stores closed. He said the claim forms wijl have instructions about how and where to file them.

He said customers will be asked to provide proof of payment such as canceled checks, credit card statements or receipts indicating payment was made in cash. Claim forms will also be mailed to former employees who have not received their final paychecks, utility companies owed for service and other creditors, he said. "If people who think they have a claim don't gt something in the mail in two weeks, they should call my office or the receiver's office," said Jewel. Jewel is with the law firm of Alley, Maass, Rogers, Lindsay and Chauncey at 659-1770. He said Famous Brands customers with claims should ask for Cindy or Debbie.

I Wendel's office telephone number is 832-5332. and GMUnii To Build 'Propfan' By Charles Elmore Staff Writar Pratt and Whitney will work jointly with Indianapb-lis-based Allison Gas Turbine, a division of General Motors in developing an advanced gas turbine-propeller engine to be flight tested in 1987, the United Technologies Corp. subsidiary announced yesterday. The engine will be designed for use on commercial and military transports of the 1990s. If successful, the "propfan" engine, which features specially-designed thin, curved propellor blades, would use some 30 percent less fuel than conventional gas turbines, said Pratt Whitney spokesman Chip Glisson.

Allison will test the engine on the ground, and Pratt Whitney will adapt it tc the McDonnell Douglas MD-80 aircraft for flight testing, Glisson said. Part of the development work will be done at Pratt Whitney's test facility in Palm Beach County, he said. In a separate development, Pratt and Whitney also announced yesterday it has been awarded $33.8 million in "long lead" funding by the Air Force for development of F100 fighter engines to be delivered in 1988. The announcement followed news Thursday that Pratt and Whitney had been awarded $506 million in full funding for F100 engines to be delivered next year. Advanced versions of the F100 engine, which is used in F-15 and F-16 fighter planes, are said to be twice as durable as earlier models.

Industrial Output Off Industrial Production Seasonally Adjusted Percentage of Capacity, with 1 00 1 9 7 7 Industrial Activity Source Federal Reserve Board 127 Bonds Decline in Erratic Session NEW YORK The bond market showed losses at the end of an erratic session yesterday. In the early going prices moved higher in response to the government's latest evaluations of inflation and industrial production. The reports showed collapsing world oil prices nelped produce a record plunge in wholesale prices last month while production at the nation's factories, mines and utilities shrank 0.6 percent. The Labor Department said the 1.6 percent drop in the Producer Price Index was the largest monthly decline since the government began keeping track of wholesale prices in 1947. Bond traders generally welcome sluggish growth because it tends to prevent the buildup of pressures that could drive interest rates up.

126 ir 125 PI WASHINGTON (AP) U.S. industrial production plunged 0.6 percent in February, the steepest decline since the end of the last recession, as oil and gas drilling activity fell sharply, the government said yesterday. The Federal Reserve Board said the February decline followed a tiny 0.1 percent January increase and left output at the nation's factories, mines and utilities only 1.6 percent higher than it was a year ago. February's weak showing matched a 0.6 percent drop last October and was the biggest setback since an 0.8 percent plunge in October 1982, during the depths of the last recession. The decline was led by a 3 percent fall in mining activity, the biggest decline in this category in more than a year.

The report said the weakness reflected drastically curtailed oil and gas drilling activity. "The decline in mining is the other side of the oil prices coming down. People can't justify doing any more (exploratory) drilling," said Donald Ratajczak, head of economic forecasting at Georgia State University. The slump in the oil industry has depressed economic activity in energy states such as Texas, Oklahoma and Louisiana. Michael Evans, head of a Washington forecasting firm, said, however, that much of the weakness outside of energy exploration was overstated because of weather factors.

He said that unusually mild January weather overstated economic activity while unusually severe February weather forced plant closings and depressed activity. "This big decline is a fluke. It is the same weather phenomenon which played havoc with the February unemployment figures," Evans said. Still, other analysts said industrial activity may remain sluggish until after mid-year as domestic manufacturers continued to be battered by huge trade deficits. It will be several more months, these analysts said, before the declining value of the dollar will make American goods more competitive.

In the manufacturing sector, production fell 0.6 percent in February as output of durable goods, items expected to last three or more years, declined by 0.8 percent and production of nondurable goods was off 0.6 percent. The big drop in durable goods came despite the fact that production of autos was up a healthy 4.1 percent in February. Autos were assembled -124 123 MAM JASONO JF 85 86 Feb'86 Feb '85 Jan 86 CenTrust, Freedom Announce Another Step Toward Merger General Dynamics To Build Sub WASHINGTON General Dynamics back in the Navy's graces after a two-month suspension, received a $587 million contract yesterday to build a 13th Trident ballistic missile submarines. In addition, General Dynamics' Fort Worth, Texas, division received a long-lead Air Force contract totaling $764.5 million for F-16C and F-16D Falcon jet fighters. The submarine award had been expected, as General Dynamics's Electric Boat division in Groton, is the only company now capable of building the huge nuclear-powered submarine.

The company had been precluded from receiving the contract, however, by a suspension that was im 123.7 126.5 125.7 at a seasonally adjusted annual rate of 8.7 million units in February, up from 8.4 million units in January. Investors Are Quick To Take Advantage Of Comptroller's New Financial Hotline posed last December following the indictment of the company and four former or current executives in connection with alleged overcharges on an Army contract. The Navy announced Feb. 7 that it was lifting that suspension because it was satisfied General Dynamics had sufficiently improved its internal administrative and accounting controls to prevent mischarging in the future. The company also agreed to set up a $50 million escrow account to cover potential liabilities and to accept increased Pentagon monitoring of its internal affairs.

MIAMI CenTrust Savings Bank and Freedom Savings and Loan Association yesterday announced an agreement in principle to merge. Under the terms of the agreement in principle, CenTrust will become the largest savings and loan and the third-largest financial institution in Florida. Combined assets of the merged thrift would be $7.6 billion. Only Barnett Banks of Florida with $13.2 billion in assets and Southeast Banks with assets of $10.2 billion would outrank it. Both CenTrust and Freedom have recently made turnarounds after experiencing rocky times.

Freedom, which has 40 branch offices mainly in the Tampa St. Petersburg area, moved into the black in 1985 for the first time in several quarters. CenTrust underwent a management change in 1983 and turned around its sagging financial picture in 1984. CenTrust, which now has 43 branches, will be the 15th largest thrift in the nation if the merger goes through. "This merger would give Florida a home-based major financial institution which speaks for Florida.

It is contrary to the recent trend of mergers of Florida financial institutions with out-of-state banks and institutions," said CenTrust Chairman David Paul. Under the proposed merger Paul will head the beefed-up thrift. The agreement announced yesterday calls for the two institutions to negotiate a definitive merger agreement, subject to shareholder and regulatory approvals. Freedom shareholders will receive consideration in the deal. While those terms have not been settled yet, they arje likely to consist of CenTrusb securities with a value equal to $22 per Freedom share.

British Telecom Posts Earnings By Charles Elmore Staff Writar Both lines of a toll-free hotline to help protect investment and banking consumers from fraud have been "lit up solid" since they were opened Tuesday, said a spokesman for the Florida Comptroller's office in Tallahassee. "Conceivably, we're going to need to set up more lines," said Ash Williams Thursday. The toll-free line was recommended by the Comptroller's Task Force on Securities Regulation following several recent multimillion dollar failures, including those of ESM Government Securities of Fort Lauderdale and State Capital Corp. of Boca Raton. The number is 1-800-848-3792.

Operators are on duty from 9 a.m. to 4 p.m. Operators have been answering calls at the rate of one every five to eight minutes, the time required to take down relevant information on a query, Williams said. The questions are researched and answered by members of the Comptroller's office, the agency that oversees securities, banking, and finance in the state. Specific areas under the Comptroller's supervision include mort gage brokers, consumer finance companies, and companies that issue money orders and traveler's checks.

By law, the Comptroller's office cannot give investment advice or comment on the relative value of one bank or investment over other. The office can, however, tell callers whether or not a salesperson or company is registered or under investigation, and also give "general information" on financial questions. Setting up the hotline has meant adding two operators and a supervisor to the Comptroller's office staff, Williams said. Temporarily, at least, it has also meant more work for the original staffers. "Still, we figure it's worth it to spend a tax dollar trying to prevent fraud if it saves a tax dollar spent on prosecuting and cleaning up fraud later," Williams said.

Funding for additional phone lines and staff would have to come from the state legislature, which convenes next month. "By then we'll have a little more experience with the hotline, and wq'U know what resources we need to do the job," Williams said. LONDON British Telecom, the nation's telecommunications giant sold in 1984 to private investors, announced yesterday that its pre-tax profit for the nine months Dec. 31, 1985, were 1.33 billion pounds (11.94 billion). In the nine months before it was denationalized by Prime Minister Margaret Thatcher's government in December 1984, the company recorded pre-tax profit of 1.07 billion pounds ($1.57 billion).

The company's business volume from April 1 to Dec. 31, 1985, totaled 6.16 billion billion), about 10 percent higher than in the same nine months of 1984, it said in a statement..