The News-Star from Monroe, Louisiana • Page 26

News-Star 6C TUESDAY, May 7, 2002 no ipM mmm Stocks slop; Analysts say Fed unlikely to raise rates "We are in the midst so far of a jobless recovery and a profitless recovery. That is a double-whammy on financial markets and the Fed doesn't want to make it a triple-whammy by raising interest rates," said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis. that the unemployment rate climbed to 6 percent in April. That report was the most dramatic of a number of indicators showing that the recovery from last year's recession, after surging out of the starting gate in the January-March period this year, was slowing down. On the eve of Tuesday's regular meeting of Fed officials to review interest rates, analysts were in widespread agreement that the central bank will not see this as the right time to start boosting interest rates as a pre-emptive strike against inflation.

The government reported Investors have been unloading stocks for weeks as companies reported lackluster first-quarter earnings and failed to offer positive forecasts for future results. Economic news has also been mixed. Technology issues traded lower Monday afternoon, after initially getting a small bounce from bargain hunting investors. Tech has been on a steady decline throughout 2002 as the Associated Press NEW YORK With no upbeat news to cheer Wall Street on Monday, investors sold stocks lower. Technology issues fell for the fourth straight session.

"There are two things at hand. No. 1, earnings stink. The second is valuation," said Gary Kaltbaum, market technician for Investors Edge Partners in Orlando. "Put those two together, you end up with a lethal combination and the rough-tough trading we have been seeing." In light trading in the late afternoon, the Dow Jones industrial average was down 95.98, or 1.0 percent, at 9,910.65, after gaining 1 percent last week.

The broader market also stumbled. The Nasdaq composite index fell 12.41, or 0.8 percent, to 1,600.62, having dropped 3.1 percent last week and posting losses for 1 1 of the 13 prior sessions. The Nasdaq fell 75.20 points in the last three sessions alone. Martha's Associated Press WASHINGTON With unemployment at its highest level in nearly eight years, the Federal Reserve will hold interest rates steady this week and won't start to raise rates until joblessness begins to fall, economists forecast Monday. r.

The Standard Poor's 500 index declined 9.33, or 0.9 percent, at 1,064.10, having slipped 0.3 percent last week. Lower stock prices couldn't entice investors to buy stocks. Analysts say that to commit to the market, investors need, to hear that business is improving and that the economy is strengthening. There was no such news Monday to suggest either was the case. Vineyard Briefcase Mer Rouge bank earns five stars Mer Rouge State Bank haj earned a 5-star superior rating from Bauer Financial.

It's the 53rd straight such top ranking for the Morehouse Parish bank. Nominees sought for mayors' award Nominations are being accepted for the Twin Cities Mayors' Committee for the Disabled awards, which will be presented during an awards dinner on July 16 in the Monroe Civic Center; Among the awards: Mayorf Award, Distinguished Service Award, Volunteer Award, Media Award, Employer Award and the Commercial Award. Deadline for May 30. Information: Chris Mayfield, 396-0902, Of Betty Futch, 330-7596. Audit seminar at ULM on May 22 The all-day seminar "Internal Auditing and the Law" has been scheduled OQ May 22 in the University of Louisiana at Monroe Library Conference Center.

Certified Internal Auditors and Certified Public Accountants can earn eight hours of continuing professional education hours. Scott Fargason will present the seminar. Cost: $140. Information or registration: Patricia Roshto, 342-1118. Agriculture forum set for May 17 The Southern Agri Business Forum, coordinate ed by the North Louisiana Agri-Business Council, has been scheduled for May 17 at the Holiday Inn Holidome in Monroe.

Topics will focus on the theme "Agriculture 2002: Opportunities for the Future." Cost: $25, including lunch. Information: Paula Walker, 325-1961 or any LSU AgCenter office. Ufinn.nSvia mascot loses favor Briefcase Mortgage program holds workshop Hibernia National Bank and Fannie Mae has scheduled a seminar to teach Realtors about the HomeGrow program, a $5 billion commitment to provide mortgages to low and moderate income families in Louisiana and Texas. The seminar is scheduled from 10 a.m. to noon Friday at the Holiday Inn Holidome in Monroe.

Information: Louisiana Realtors Association, (800) 266-8538. Railroad wins safety award Kansas City Southern has earned the Gold E.H. Harriman Memorial Award for achieving the best employee safety record for its size railway in 2001. It's the second straight year the railroad has won the award. Building permits The Ouachita Parish Police Jury issued the following building permits Monday: Jamison Allbritton, US Candy Queen Lane, mobile home, $26,000.

Burkett Construction, Augusta Drive, Lot 21, single-family houses detached, no estimated value listed. Burkett Construction, Augusta Drive, Lot 10, single-family houses detached, no estimated value listed. Kevin Rice, 702 Washington Lot 13, mobile home, $16,000. Betty Hamilton, 1868 Louisiana 34, single-family houses detached, $200,000. Charles Wood, 103 East Bend Place, single-family houses detached, no estimated value listed.

Tammy Ford, 2815 Louisiana 15, Lot 6, mobile home, no estimated value listed. United Bilt Homes, 354 Timber Way, single-family houses detached, no estimated value listed, Lanna Adkins, 2809 Arkansas Road, Lot 45, mobile home, no estimated value listed. On tap today The Ruston-Lincoln Convention and Visitors Bureau and Ruston Main Street has scheduled their' first tourism awareness luncheon at noon at the Ruston Civic Center. The event is open to the public. Tickets: $15 per person, $100 for a table of eight.

Information: 255-2031. market expects it will be the last to emerge from recession; By the end of Friday's session, the Nasdaq had plunged 21.7 percent from its high close for the year 2,059.38 back on Jan. 4. After weeks of heavy selling, the market might be poised for a rally soon. But Wall Street isn't capable of sustaining any upturn, analysts said, until companies offer upbeat outlooks.

4 I i Mil 4 I I -X. i tMv-, I 1 it 1 -1 1 vi i v. Associated Press VINEYARD HAVEN, Mass. The Black Dog company, whose silhouetted symbol has been the mascot of Martha's Vineyard for three decades, is suddenly the black sheep of this island resort. Over the past year, since the founder's son took control, the $13 million restaurant and T-shirt conglomerate has suffered a serious drop in sales and an even steeper decline in its local reputation.

The forced exit of the longtime manager, the layoffs of half the year-round work force and the three-month winter closure of the flagship tavern were enough to rattle the island's fragile seasonal economy. But it was the new management's decision to save money by having the well-known Black Dog T-shirt a quintes-sentially island product made and marketed by off-island companies that ignited a local mutiny. "It's a whole different Black Dog now," said Barry Rosenthal, a local businessman. "Over the years they have been an exemplary neighbor and citizen. That's why everyone's so disturbed." Hatched as a humble harborside chowder house in 1971, the Black Dog grew into an international entrepreneurial success based on the popularity of its simple Labrador icon and its close association with the Massachusetts resort.

Changes made by the owner's son, who returned from a life of piloting and competitive windsurfing to take over the family business, upset Vineyard residents. "It's the talk of the town," said Mary Rentschler, whose design company was a victim of Black Dog's downsizing. "We feel a lot of injured souls walking around." The shake-up also has led to a $1 million lawsuit filed by Joseph Hall, former manager of more than 21 years and shaken a community that had grown dependent on Black Dog. 1 7'! "The market is probably just going to trade around here. You might see a little move lower and another move a little higher," said Richard A.

Dickson, a technical analyst at Hilliard Lyons in Louisville, Ky. Dickson added, "You are in for another frustrating trading range. That is why it is important to look at areas of the market that are performing the best," such as small-cap stocks. Andersen trial set to Associated Press HOUSTON 'Sixteen-! jurors, including four alternates, were swom in Monday to hear testimony as Arthur Andersen LLP went on trial for its life for allegedly obstructing justice by shredding Enron-related documents. The jurors, nine men and seven women, were told to return to the Houston courtroom Tuesday morning for opening statements from lawyers in the first criminal case to emerge from Enron dizzying collapse last year.

The jury was picked after day-long questioning of a pool of 106 potential jurors. Andersen's lead attorney, Rusty Hardin, said earlier Monday no last-minute settle- ment between the accounting1' firm and prosecutors even was attempted. "There will be a trial," Hardin said. His task is to avoid a conviction that could provide the knockout punch to the embattled Chicago-based accounting firm that already has been plagued by bolting clients, fleeing partners, forced layoffs and a damaged reputation. Prosecutors said if jurors determine one Andersen employee destroyed documents to thwart government investigations on the firm's behalf, that's enough to secure a conviction.

First, as insurance. Not all investments beat inflation, even at these levels. FundAlarm, the wonderfully cranky mutual fund Web site, notes that inflation has averaged 2.25 percent a year the past five years but 416 stock funds haven't beaten inflation in that tim. Ironically, several of the funds unable to beat inflation the past five years were gold funds. Which brings us to another point: There aren't many good inflation hedges these days.

Gold, for example, is the traditional hedge against inflation. Even though gold funds are up an average 43.7 percent this year, they haven't made up for their previous rotten years. Gold itself has been a poor hedge against inflation. It sells for $309 an ounce, up 1 1 percent from $278 at the start of CIom: 9,808.04 opentoday If AP Marianne Neill, owner of Marianne's Screenprinting in Vineyard Haven, talks about the decline in business with the Black Dog company Wednesday. The Black Dog company, whose silhouetted symbol has been the mascot of Martha's Vineyard for three decades, is suddenly the black sheep of the island.

Over time, inflation still nemesis of investors 1IIIIII-UIAIC III close 76 stores Jacksonville, Fla. Winn-Dixie Stores, Inc. said Monday the company will close all its stores in Texas and Oklahoma, laying off 5,300 workers. Winn-Dixie operates 71 stores in Texas and five in Oklahoma. The company also plans to close a distribution center and dairy plant in Fort Worth.

Winn-Dixie is one of the nation's largest retail food chains, operating about 1,150 stores in the Sunbelt with about 120,000 workers. the year. Five years ago, gold cost $371 an ounce. Furthermore, TIPS and I Bonds are guaranteed by the U.S. Treasury, so there's no chance of the government, defaulting.

The amount added to the principal on TIPS is tax able, so you may want to pot them in a tax-deferred account But interest is free from state and local taxes. If you buy TIPS, you have to hope you'll never get rich from them. High inflation la wretched. But if inflation aver ages more than 2 percent a year the next 10 years a decent bet TIPS will beat garden variety 10-year T-notes, aaya David MacEwen, manager of American Century Inflation Adjusted Bond. "That's pretty easy money," MacEwen sayi.

John Waggoim wrtta in Invnnmt column to, USA TODAY. C-ma him tl wggon9tol.com. 198, -m. I The economy could overheat. Alan Greenspan, Federal Reserve chairman, has done a brilliant job fighting inflation.

But another Fed chairman might be more inclined to err on the side of economic growth. War. Normally, war is inflationary. Governments typically borrow to finance war and often inflate the currency to make borrowing costs seem lower. As wars go, the current one hasn't been that expensive.

But if the war widens, it could raise inflation. Why are TIPS special? Like all Treasury securities, TIPS are Treasury notes long-term U.S. government IOUs. Most bonds have a set face value: If you buy a $10,000 Treasury note at auction the government pays interest on the $10,000 until it matures. Then you get your $10,000 back.

But the face value of a TIP is adjusted for inflation. For example, if you own a $1,000 TIP and inflation rises 2 percent over six months, your TIP would then be worth $1,020. Interest would be paid on that amount. Essentially, the government guarantees that your interest payments will rise with inflation, if you hold the note to maturity. If you sell before then, you get the market price which could be more or less than you paid.

You can also buy I Bonds, Savings Bonds whose principal is adjusted for inflation. You have to hold your I-Bond for five years to avoid a modest redemption penalty. Bonds bought until Nov. 1 will earn an annualized rate of 2.57 percent, the lowest ever. That's not much.

So, why bother with TIPS or 1 Bonds? As an investor, what do you have to fear most? The Middle East situation? Bad earnings reports? Your mutual fund manager? Nope. Your biggest fear should be inflation. You want your money to be able to buy more in the future than it can now. Only one investment can guarantee that: TIPS (Treasury Inflation-Protected Securities), the Treasury's inflation-adjusted bonds. In the world of terrifying ogres, inflation is currently right up there with the Sta-Puft Marshmallow Man.

The consumer price index, the most common measure of inflation, rose just 1.5 percent the 12 months ended March. Compared with 1979, when inflation soared 13.3 percent, that's nothing. Inflation isn't an imminent danger. But it's a constant shad- With To reach us To comment on a story, offer news tips, or speak to a local editor call: City Desk 362-0278 Business 362-0288 Fax 362-0273 businessthenewsstar.com Our team editors for the news section are Bob Teague and Eleanor Rushing. This page was edited and designed by Lori Tucker.

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If the dollar stumbles, import prices could rise, which would drive up inflation. Demographics. The baby boomers, those 78 million born from 1946 through 1964, aren't getting any younger. As they age, they need more medical care which drives medical costs up. $0.34 mmmmmtmmmmm $0.55 $0.80 Cntrylnl cotao ConAqri P6tnAir Dillards Forestl tmm Avf, perewttag against am tti world mrM Stocks of local Interest Drv PE Close Ch YTD Dry PE ClOM Ch YTO r-is-i.

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