Reno Gazette-Journal from Reno, Nevada • Page 30

Today's tip Owners of ailing businesses can get tree, professional consultations at the University of Nevada-Reno's Small Business Development Center. For information call 784-1717. 12B Thursday, December 17, 1987 Reno Gazette-Journal BUSINESS EDITOR: MIKE HENDERSON. 786336 Housing construction shoots up 7.5 GM is recalling 203,000 vehicles DETROIT General Motors Corp. said Wednesday that it was recalling about 2O3.CO0 cars, light trucks and full-size pickup trucks to make safety-related repairs at no cost to owners.

GM said in a written statement that it was recalling about 127,000 compact cars from the 1963 model year equipped with two-liter engines and automatic transmissions; about 64,000 full-size 1968-model pickup trucks; and another 12,000 rear-wheel-drive cars and light trucks from the 1967 model year equipped with certain transmissions. Analysts said the survey results indicated that companies were not scaling back their investment plans in the wake of the stock market collapse in October. "These numbers are an encouraging sign that corporations aren't panicking, but they still reflect pre-crash plans," said David Wyss, an economist with Data Resources Inc. in Lexington, Mass. "Most of the companies that we have talked to say they haven't changed their investment plans yet, but that they are watching the (sales) market very closely." The new survey showed that businesses had boosted their spending plans for this year as well.

Associated Press The government reported Wednesday that housing construction surged higher in November and forecast that business investment would grow strongly next year, two signals of economic strength that helped rally the financial markets. The Commerce Department said in Washington that construction of new homes and apartments rose by 7.5 percent to a seasonally adjusted annual rate of 1.64 million units last month, following a 9.6 percent drop in October. In a second report, the department said business investment spending was expected to increase by 7.3 percent next year, compared with the 2.3 percent increase expected this year. Government and private reaction to the housing report was cheery, with analysts stating the rise indicated that the housing industry a key economic sector had weathered the initial shock of the stock market's Oct. 19 crash.

"This allays any fears one might have had that the stock market decline was going to have a big effect on the housing market. Builders apparently haven't seen anything so far that has frightened them," said Lyle Gramley, chief economist for the Mortgage Bankers Association. Analysts credited much of the rebound in November to the fact that mortgage rates dropped sharply in the weeks immediately following the stock crash as the Federal Reserve aggressively moved to lower interest rates to bolster economic growth. Fixed-rate mortgages hit a two-year high of 11.58 percent on Oct. 16, but dropped to 10.55 percent by the end of November.

Since then, rates have risen slightly and now stand at 10.66 percent, according to a nationwide survey by the Federal Home Loan Mortgage Corp. The report on business capital investment indicated that a survey completed in November found U.S. companies planned to spend $419.9 billion in 1988 on expansion and modernization, an increase of $28.43 billion from this year after adjusting for inflation. If realized, it would be the biggest increase since a 9.6 percent rise in 1985. GM has notified the vehicje owners by mail of the pof said GM spokesman Da te Hudgens.

C3 bas Dow hops Nevada retail sales climb CARSON CITY Nevada merchants sold $858.7 million in goods in October for a 13 percent gain over the same month in 1986, Taxation Director Perry Comeaux said Wednesday. The October sales brought the fiscal year-to-date sales to $4.4 billion, up 12 percent over the same period last year, Comeaux added. The October sales also generated $50.8 million in sales taxes for state and local government coffers, and another $15.6 million in excise taxes on tobacco, liquor, gasoline and other items. The sales levies showed a 21 percent increase while the excise taxes were up 38 percent over October 1966. A breakdown of the figures shows that sales in the Las Vegas area were up nearly 12 percent and in the Reno area were up 5 percent in October.

Nevada insurer in management reorganization By Jim GoldQazette-Joumaf Customers of Blue Cross and Blue Shield of Nevada should see service improve under management changes that took effect this week, company officials said Wednesday. The non-profit Nevada insurance company's board voted to become an affiliate of Rocky Mountain Health Care Corp. of Denver, said Dr. William K. Stephen of Las Vegas, chairman of Nevada's Blue Cross-Blue Shield.

The Nevada company will maintain local control of operations while Rocky Mountain provides support services, he said. "There's no reason why you can't have underwriting, actuarial service and system support combined out of state," said Tom Seigner, who moves up from vice president to president of the Nevada company. "It makes Seigner sense monetarily." Nevada Bell boss feted Nevada Bell's new president, Dennis R. Mulkey, received a warm welcome Wednesday during a reception in his honor. About 135 businesspeople attended the reception at Harrah Prospectors Room.

Mulkey succeeded Richard K. Van Allen, who left Dec. 1 after six years to take over the position of vice president of external affairs for Pacific Telesis Group in San Francisco. Before assuming his position in Reno, Mulkey, 47, was vice president of Pacific Bell Directory in San Francisco. Pacific Bell Directory and Nevada Bell are subsidiaries of the Pacific Telesis Group.

Mid-December advance keeps powering on By Skip WollenbergAP NEW YORK A late surge in blue-chip stocks lifted the market to another broad-based gain Wednesday, extending a powerful mid-December advance. Transportation and technology stocks led the gainers. Analysts said new declines in crude oil prices contributed to the latest rise in stock prices. But they said a more fundamental reason was the market's stubborn refusal to give in to selling that would erode its recent gains. The Dow Jones average of 30 industrials, which had drifted narrowly after rising 8.62 points on Tuesday, soared in the final hour of trading to post a 32.99-point gain and closed at 1,974.47.

In the past eight sessions, the market's best-known indicator has risen nearly 208 points, or about 11.8 percent. Advancing issues outpaced decliners by a margin of more than 2-1 among issues listed on the New York Stock Exchange, with 1,145 stocks up, 469 down and 382 unchanged. Volume on the Big Board came to 193.82 million shares compared with 214.97 million shares on Tuesday. Some market analysts had expected blue-chip stock prices to pause after rising over the past seven sessions. But Lewis Smith, a technical analyst for the investment firm Bear Stearns said even the skeptics were impressed that the market held its ground on Wednesday during what was shaping up as a lackluster session.

He said some investors were worried that the market had risen too quickly. But he said others with substantial amounts of cash were looking for any sign of weakness as an opportunity to get back into the market. It was this group that helped propel the market higher in the final hour of trading, he said. "We are gradually forcing in the folks that are unconvinced that it is an up market," Smith said. Market watchers say the oil price decline has diminished fears about inflation and encouraged speculation that fuel costs could be headed lower.

International Business Machines led the NYSE's most active list, climbing 2 to 118. Among other blue-chip issues posting gains of a point or more, General Electric rose l's to 46, Goodyear advanced 4 to 61, Eastman Kodak jumped IV to 50, General Motors rose Vz to 62, Ford was up 1 to 77 and Procter Gamble rose 1 to 88V4. In the technology group, Digital Equipment soared 6V to 135 V4, Data General rose lVfe to 24V4, Hewlett Packard climbed 1V4 to 57V4 and Honeywell rose Vh to 58V4. I The Nevada company, whose primary business is group health insurance, has about $35 million in annual revenue, Seigner said. It handles about 45,000 subscribers and under a state contract 30,000 Medicaid recipients.

Rocky Mountain, organized as a management Jinn Blue Cross and Blue Shield companies in Colorado and New Mexico, owns those insurers as well as a life insurance company, health maintenance organization and investment management firm. Its annual revenues are about $300 million, Seigner said. The new affiliation means the Nevada company can spend Rocky Mountain's money for equipment that will enable Blue Cross and Blue Shield to administer claims faster, Seigner said. In the near future, he said, the Nevada company can offer different types of life insurance and health-maintenance plans. The new affiliation won't change plans for the Nevada firm to move into new headquarters at Corporate Pointe in April, Seigner said.

The office building development at Meadowood in south Reno is owned by Blue Cross of California, which had been providing services to Blue Cross and Blue Shield of Nevada. Rocky Mountain officials emphasized local control of Nevada operations. Stephan will maintain his Nevada chairmanship while taking a seat on the Rocky Mountain board. Keith Pitman, operations director in Nevada, has been promoted to vice Gurus giving up posts NEW YORK Henry Kaufman and Allen Sinai, two of Wall Street's best-known economists and market gurus, are giving up their current posts at major investment firms. Salomon Brothers Inc.

announced Wednesday that Kaufman, whose gloomy forecasts in the early 1980s earned him the nickname "Dr. Doom," would leave early next year to form his own consulting firm. Kaufman is currently a managing director, senior economist and head of research at Salomon Brothers. Sources said, meanwhile, that Sinai was dropping the job of chief economist at Shearson Lehman Brothers Inc. but planned to remain with the firm in a more "entreprenurial" capacity outside the company's New York headquarters.

Lane IvarMfVGazette-Journal TAKING SHAPE: Joe Moore of Scott's Tree Service prunes a tree in front of the offices of the Great Basin Federal Credit Union in Reno on Wednesday. The cutting is an annual ornamental pruning, Moore says. Dunes sale completed LAS VEGAS Japanese businessman Masao Nangaku has completed his purchase of the financially troubled Dunes Hotel and Casino for $155 million. The resort's current management team, headed by former Desert Inn executive Burton Cohen, will continue to manage the hotel until state gaming regulators complete their investigation of Nangaku. Correction The new R'Onions restaurant on South Virginia Street is owned by Pacific Grill Inc.

of Nevada. Dr. Richard Cavell is president and major stockholder. State tourism agency studies ad campaign By Lisa OvensGaien-Joumal Members of the Nevada Commission on Tourism are expected today to approve a spring advertising campaign that could cost more than $500,000. The plan, created by Advertising, would center on $331,531 worth of advertising on radio and outdoor billboards and in regional print publications, with an emphasis on consumer magazines and newspapers.

The commission meets at 1:30 p.m. in Laughlin. also is hoping the commission will approve the use of an additional $200,000 in a reserve fund that was created from higher-than-anticipated room-tax revenue from last year, said Richard Moreno, commission spokesman. With that money, would purchase extra radio advertising in the San Francisco Bay area, Phoenix and Salt Lake City, Randy Gaess, an executive for the tourism commission account, said Wednesday. "There's no doubt the state has to reach out farther and there's no doubt the state has to be more dominant in print (advertising) in major travel publications," he said.

The state will continue using the theme "Discover Both Sides of Nevada," which promotes the state's natural scenic attractions and gaming. Advertising will also promote the availability of free information about entertainment and recreational activities through the 800-NEVADA-8 visitor information number and the mail. "With the introduction of the new, far-reaching toll-free number and a slight downturn in the economy, it is incumbent upon the state of Nevada to provide the travelling public with the opportunity of easy access to visitor information on entertainment and recreational activities throughout the state," Gaess stated in his proposal. has the tourism commission account for two years with a bi-annual budget of $2 million. Austin residents rejoice as credit union opens By Steve PaplnchakGuttjoumai AUSTIN After going 15 months without banking services, this central Nevada mining town is rejoicing over the opening of a credit union branch office.

And perhaps no one is happier than Hollie Collier, manager of the Golden Club, one of the four bars in this town of 400 residents. When Nevada National Bank closed its Austin branch office in August 1986, the bars became the unoffical banks. It's where the miners cashed their checks, had a few beers and thanked the barkeep for saving them a 224-mile journey to Fallon, where the nearest banks and major stores are located. But assuming the role of bankers has taken a toll on Collier and the other tavern managers. She had to make two banking trips to Fallon a week to keep enough cash on hand, Collier said.

And even more trips would have been needed if some competing bars didn't make group banking runs, she said. Despite all this effort and teamwork, however, the slot machines in bars would still run dry of coins. "It's really been quite a relief to us," she said of the opening of the credit union. "I think every one is pretty darn proud that we have it here," she said. "I think it's good for them and it's good for us." The Las Vegas-based Southern Nevada State Savings and Credit Union opened its Austin branch on Dec.

1. It's located in the same mobile unit that housed the Nevada National Bank. When it closed shop, Nevada National said the Austin branch was a bad business proposition. "We don't have the overhead that a bank has," said Ken Yoder, president and general manager for South-See CREDIT, page 9B 01 luuuy ddicd piauuircd blamed for stock losses WASHINGTON (AP) Small investors needlessly lost millions of dollars in the October stock market crash because of shoddy sales practices prevalent among brokers long before the historic plunge, Congress was told Wednesday. Nearly half the callers to a toll-free, nationwide investor hot line complained of broker practices that "were exposed, but not caused, by the events of Black according to the North American Securities Administrators Association.

"It is clear that serious problems in the financial markets existed weeks, months and even years before the Oct. 19 crash," James C. Meyer, NASAA president, told the House Energy and Commerce subcommittee on finance. Brokers have a legal obligation to consider the suitability of a particular investment to their client's financial situation, Meyer said. Instead, "the prevailing attitude about investment instruments in the bull market appeared to be: 'if they sell, you push he said.

Representatives of securities exchanges, however, defended the performance of the nation's markets at a time of historic levels of trading volume and said they were vigorously investigating customer complaints. Unlike the calls to the hot line, most of the written complaints received by the securities exchanges are a direct outgrowth of the heavy trading and rapid drop of the market, they said. Customers complained of difficulty getting trades executed or said they weren't given enough time to meet calls on margin loans before their accounts were liquidated. NASAA, which represents state and provincial securities administrators in the United States, Canada, Mexico and Puerto Rico, based its conclusions on an analysis of 2,562 calls to the toll-free investor hot line between Nov. 9 and Dec.

4. The callers suffered projected losses in the Oct. 19 market crash totaling $457 million, an average of $170,000 each. Losses ranged from $62 to $5 million. i MISSI REINKEMEYER, a native of Reno, has been appointed an account executive for Norwell, Devine Partners Inc.

She will be responsible for several major accounts at the Boston-area Reinkemeyer advertising agency. Before joining Devine It Partners, Reinkemeyer worked for OgiJvy Mather Inc. in New York. Reinkemeyer is a graduate of Dartmouth College and lives in Boston. Wire service and staff reports 1.