The Montgomery Advertiser from Montgomery, Alabama • 23

Advertiser Thursday, July 3,1997 78 Richard Thompson, Business editor, 262-1611 IMS j-i iiJf Fed postpones interest rate increase cent annual rate, less than half last year's. That's the best performance in three decades and has astonished economists who believed it could not coexist with an unemployment rate at a 24-year-low of 4.8 percent in May. "The inflation news is almost incredibly good in the face of what one would normally think of as inflationary growth numbers, especially the employment numbers," said Norman Robertson, economic adviser to Smithfield Trust Co. in Pittsburgh. "But the fact of the matter is if there are any incipient labor cost pressures, they're simply not visible at this time." showed little reaction.

But the Dow Jones average of industrial stocks staged a late advance and came within about a point of breaking its June 20 record close. It finished the day at 7,795.38, up 73.05 points. An increase in the benchmark rate would have quickly translated into higher borrowing costs for millions of businesses and consumers on everything from auto loans to credit cards. And that eventually would have slowed economic growth. But Fed policy-makers apparently decided growth has slackened sufficiently on its own from a first-quarter surge at a 5.9 percent an seen came just in the nick of time.

If there was any evidence the economy was growing markedly greater than 2 percent, on top of the first quarter, I don't see how they could have failed to raise rates," said economist Paul Getman of Regional Financial Associates in West Chester, Pa. The question before policy-makers at their Aug. 19 and Sept. 30 meetings will be whether growth bounces back in the second half of the year to the point where prices start accelerating. So far this year, inflation has been decelerating.

Consumer prices have risen at just a 1.4 per- ASSOCIATED PRESS WASHINGTON The Federal Reserve gave American borrowers a vacation from higher interest rates, opting Wednesday to wait and see if the economy's best inflation performance since the 1960s lasts deeper into the summer. After a two-day meeting of its Federal Open Market Committee, the central bank signaled that it had left the benchmark federal funds rate on overnight loans between banks at 5.5 percent. The decision had been widely expected and at first Wall Street "jf mm poo3 Wade Henderson, the general manager of the Holiday Inn-East, sits Wednesday in front of the Holidome, the hotel's indoor recreation center. The Holidome is one of the areas that will be renovated under the hotel's acquisition by Dallas-based Bristol Hotels Resorts. New owners planning to upgrade Holiday Inn-East i a A st fa tow BOTTOM LINE Master Lock reduces work force AUBURN Master Lock scaled back operations in Auburn and dismissed 85 from its work force of 325.

Company vice president Dan Strittmater blamed the reduction on foreign manufacturers producing cheaper locks as well as tough competition in the United States. The Auburn plant produces door locks. The dismissals included hourly and salaried workers, Strittmater said. Research park called world's best search Park in Huntsville has been given top honors from an organiza-; tion that serves university-related parks and technology incubators. Cummings, created in 1962, occu-' pies more than 7 million square feet of building space on 3,800 1 acres.

The Association of University Related Research Parks selected Cummings as the world's best in a field of several hundred such de- Yelopments during the organiza- tion's annual meeting in Monterey, Calif. It is the second year the award has been given by AURRP, which was started in 1986. i A research park in Madison, won the award last year. Air shuttle expands to Tuscaloosa TUSCALOOSA Tuscaloosa pects to have a new airport shuttle service 10 oirnimgnam anu Auan- ta. I i Adventure Bus and Charter tours based in Sumiton, is ex-; panding its business to Tuscaloosa.

The shuttle company provided all iof the ground transportation for the Mercedes plant opening. i "We had been contacted by com- panies in the Tuscaloosa area who 1 were looking for more dependable shuttle service to Birmingham and also service to Atlanta," said com- mings. said Mercedes' travel provider, All Seasons Travel, was one of the companies that ap-' proached Adventure about expand ing ua aei vii.e. miagu itici tannic annnnnrac liAffe CHICAGO The Chicago Mer-' cantile Exchange, struggling to remain a Hnminant fnroa in tha fii. -(HUlkA UUIIIlllUIlt 111 L11V.

1U tures industry, announced a restructuring pian tnat includes InvinfT nff in rvrrfnt nf its staff About 100 of the 950 salaried po-; sitions were immediately eliminat- ed at the exchange that trades meat, livestock and currency futures. In addition, from Aug. 1 to the end of the year, the Merc said it also will waive a "significant por-tion" of the fees it charges mem- bers and customers to balance trading accounts. The Merc said Wednesday the re- structuring would save about $17 million a year and help ensure that if stays "ahead of rapid developments in a competitive marketplace and remain a global leader." British government cuts corporate taxes LONDON The new Labor government's first budget cuts corporate tax rates by 2 percentage points, leaves personal income tax rates unchanged and imposes a "windfall" tax on recently privatized companies many of them owned by Americans. Treasury chief Gordon Brown pledged Wednesday to spend billions on the health system and to help young people and single parents get off welfare, but there were plenty of losers as Labor gave the strongest indication yet of how it will run Britain.

Pension plans will see taxes rise stock dividends and some recently privatized companies face a "windfall" tax bill of some $8.6 billion, payable in just two installments. Livestock auctions closed this week All livestock auctions in the state will be closed this week. No reports will be issued by the USDA until July 8. From Associated Press reports nual rate, fastest in nearly a decade. Most economists are looking for moderate, 2 percent growth in the April-June period.

Signs of a slowdown abound, including a Commerce Department report Wednesday that factory orders fell 0.7 percent in May, the second decline in three months. The backlog of unfilled orders at factories was unchanged following decreases in April and March. That shows manufacturers were keeping up with the flow of new orders and that there is little danger for now of inflation-causing delivery delays and shortages. "The easing in growth we've MICKEY WELSHSTAFF said Wade Henderson, general manager of Holiday Inn-East. Henderson estimated the project likely will cost more than $2.5 million.

Although a final remodeling strategy is not yet in place, it almost certainly will include converting the hotel's former restaurant space into an expanded meeting facility, Beckert said. The expansion would increase the hotel's current 3,200 square feet of meeting space to 5,500 square feet, Henderson said. In addition to the added meeting space, Beckert said the Montgomery property also might focus on establishing a catering and banquet area. While Beckert said Bristol seeks more hotel properties nationwide, he could not say whether others would be acquired in Alabama. "We're looking in areas where we already have existing hotels," Beckert said, "and Alabama certainly fits that profile." ters, closed the gap.

Lipper's average of 495 "small-cap" funds returned 17.1 percent for the quarter, and "micro-cap" funds investing in the smallest stocks actually beat the 500 index funds with a 17.6 percent return. Lipper's average of 1,179 world funds posted a 10.11 percent return for the quarter, led by Japanese funds, up 19.99 percent after a long dry spell since the start of the '90s, and Latin American funds, up 19.15 percent. A noteworthy exception in the forest of plus signs wasold-orient-ed funds, which were down 12.16 percent for the quarter and have lost 19.2 percent since the start of the year. Enthusiasm for gold investments has faded amid signs that inflation continues to abate, rather than reviving as some analysts had been expecting. The top performers in the quarter among specialized and sector funds included science and technology funds, up 18.32 percent; said.

"Some earnings growth will come from redeveloping and repositioning hotels, "but some will come from acquiring new hotels." Applying that strategy on a mass scale is a fairly recent phenomenon for Bristol, formerly named the Harvey Hotel Co. From 1982 to 1994, the company added only nine more hotels in Dallas, Houston and Wichita, to its portfolio. But in January 1995, Bristol purchased 26 hotels from Memphis, United Inns Inc. and instituted a $130 million redevelopment program that modernized 20 of the 26 hotels. The first acquisition was a model for the Holiday Inn merger, which will invest $200 million in renovations more than per hotel room at the 58 Holiday Inn hotels, Beckert said.

At the Holiday Inn-East, the hotel's 213 guest rooms, lounge, lobby and indoor recreational center will be remodeled in 1998, a COLONIAL ACQUISITIONS Colonial BancGroup has acquired seven banks in Florida since July 1996. Great Southern Bancorp of West Palm Beach First Commerce Bank of Florida in Winter Haven Southern Banking Corp. in Orlando Jefferson Bancorp in Miami Beach First Family Financial Corp. in Eustis Tomoka Bancorp in Ormond Beach Fort Brooke Bancorporation in Brandon also announced the pending acquisitions of two other Florida banks: First Independence Bank in Fort Myers and Dadeland Bancshares in Miami. Both mergers should be completed by mid-September, Moore said.

Company officials also said Colonial Bank merged its Tennessee, Georgia and Florida banks on Tuesday into a single, state-chartered bank based in Alabama. Robert Lowder, the chairman of Colonial BancGroup, stated in the press release that the consolidation will have no effect on local decisions at any of Colonial's banks. "It simply gives Colonial more flexible merger capabilities and reduces regulatory supervision to the Federal Reserve and the State of Alabama Banking Department," said Lowder. When Colonial makes acquisitions, it selects banks with management staffs and boards of directors that want to stay involved after the completed merger, Barksdale said. "We believe the banks will be more effective in running their own regions than bringing someone new in," he said.

MONTGOMTKY ADVERTISER Line Dial the number above and enter a four-digit category code: Business news update 6710 Wall Street headlines' 6732 Stock market update NYSE update Arriex update 6730 673S "6740 "6743 "6734 "6750 "6753 6760 "6761 "6732 6733 "6736 "6737 "673 "6739 OTC update Standard 4 Poors update Key ratesprices update Bond market update Precious metais update Commodities update Wali Street money report Wall Street gold and corns Mutual funds updata Most active stocks Top 10 dollar stocks 1 0 most widely held stocks STOCK QUOTES To get updated reports on individual stocks, punch in 1000 and use the stock's ticker symbol not the abbreviation that appears in our dairy stock listings then convert the symbol to a INFOUNE code: Location: Colonial BancGroup chose the banks in part because they are located in south Florida By Melissa Montealegre MONTGOMERY ADVERTISER Colonial BancGroup announced Wednesday it has acquired two more Florida banks, bringing seven of that state's banks under the Montgomery holding company's jurisdiction. Colonial completed a $22.6 million merger with Great Southern Bancorp of West Palm Beach, which had assets of $124 million in March. The bank holding company also acquired Winter Haven's First Commerce Bank of Florida in an $18.5 million deal. First Commerce had consolidated assets of $106 million in March. Sarah Moore, Colonial Banc-Group's senior vice president of strategic planning, said the two banks were attractive because of the quality of the institutions, their performance histories and their management teams.

But their south Florida locations made them stand out, said Art Barksdale, a senior lending officer in one of Colonial's Florida offices. "Ultimately, we would like to be in major markets," Barksdale said. "Right now, we're trying to concentrate on the southern portion of the state where the highest population growth rates are." With the Florida mergers completed. Colonial now has 181 branches in Alabama, Georgia, Tennessee and Florida. The banc-group's total assets are more than $6 billion, with $1.5 billion from the Florida banks alone, Moore said.

The multistate holding company health and biotechnology funds, up 15.76 percent, and financial services funds, up 17.06 percent. The financial services industry has represented a double play on the investment boom, since it includes many stocks of companies whose earnings benefit directly from the bull market Among those stocks are several publicly traded mutual fund management companies and brokerage firms that manage funds and sell fund shares to investors. The fund industry continues to grow rapidly, with $3.9 trillion in assets under management at last report from the Investment Company Institute. That is more than four times the $982 billion entrusted to the industry as the 1990s began. Assets of stock funds by themselves have just surpassed $2 trillion, only two years after they first reached the $1 trillion mark in May 1995, notes John Rea, chief economist at the ICI.

By Melissa Montealegre MONTGOMERY ADVERTISER Bristol Hotels Resorts paid their dues with attention to details. Sixteen years after founding its first hometown hotel in 1981, the Dallas-based holding company owns and operates 97 hotels in 22 states and Canada. Its sole Alabama property is the Holiday-Inn East, 1185 East Blvd. Bristol purchased Holiday Inn-East and 57 other Holiday Inn hotels in a $659-million deal that closed April 1. The purchase from Great Britain's Bass PLC, the parent company of Atlanta-based Holiday Inn Worldwide, made Bristol the largest owneroperator of full-service hotels in the country, said John Beckett, Bristol's executive vice president and chief operating officer.

"Our goal is to continue growing our earnings on a better-than-average basis," Beckert Mutual funds score best gain in six years quarter," Lipper Analytical said in a news release detailing the statistics. "With equity fund performance growing faster than most earnings and return on equity, stock prices are discounting the future beyond historical norms," the firm added. "New investors need to be careful." But careful fund-picking wasn't necessary to do well over the past three months. Funds of almost all descriptions, both domestic and international, specializing in either big stocks or small, racked up healthy gains. Index funds patterned after Standard Poor's 500-stock composite, which have been standout performers all through the mid-1990s, once again ranked among the leading major categories of diversified stock funds, with a quarterly return of 17.28 percent.

But small-stock funds, which had lagged far behind in recent quar- ASSOCIATED PRESS NEW YORK Mutual funds investing in stocks rode the crest of Wall Street's bull market in the second quarter of 1997 to their strongest quarterly gain in more than six years. The research firm of Lipper Analytical Services Inc. reported Wednesday that the average domestic stock fund jumped 15.37 percent in the April-June period, for its best showing since a 17.76 percent gain in the first three months of 1991. In the year that began at the halfway point of 1996 and ended Monday, Upper's average of some 2,830 stock funds returned 22 percent Over the past five years, it has rolled up an average annual return of 17.45 percent as the stock market has climbed to a steady succession of new highs. It was "an extraordinary second A XI 42 63 22 I 43 71 1 23 61 01 62 21 II 72 3 22 63 73 03 33 61 61 11 41 62 62 .13 Quotes intended for information only..