The Tampa Tribune from Tampa, Florida • 35

THE TAMPA TRIBUNE Thursday, March 31, 1994 Rising interest rates pummel stocks I fey LS Gtock market declines The last four major stock market declines, as measured by the broadly based Standard Poor's 500-stock index. The percentage listed in each case shows the index's decline from peak to trough. If you haven't sold stocks already, it may be too late 500. 1987: 33.5 Big The Bottom Line Mickie Vatente gains followed by October crash 1980-82: 27.1 High inflation, high interest rates, recession 300-1 1973-74: 48.2 I i fWlff 1994: 7.6 Recession, lAVf Arab oil embargo, 4- -I 200 Watergate 1 TYl I I I 1 II II I 1 rJ 'JT 7ftf Persian Gull war, 1 flft mJCfyrrfTn IX recession Mil 11111 III "111--- A Bloomberg Report NEW YORK U.S. stocks slumped for a fifth straight session as concern about rising interest rates persisted.

"People are starting to wonder how much worse it's going to get," said Don Hays, investment strategist at Wheat First Butcher Singer and a longtime market bull. The Dow Jones industrial average plunged 72.27 to 3,626.75, closing at its lowest level since Nov. 4. The average is off 8.8 percent since its record 3,978.36 on Jan. 31.

The Dow industrials plunged more than 50 points in the first hour of trading, recouped that loss, then tumbled again in the afternoon. "It's a very nervous market," said David Shulman, chief market strategist at Salomon Bros. Concern about rising rates fueled the market's decline. The yield on the 30-year Treasury bond is up more than 1 y4 percentage points since mid-October and climbed to 7.12 percent, the highest level since February 1993. The rise in interest rates is prompting concern it may slow economic growth and that compa- By REX HENDERSON Tribune Staff Writer TAMPA The millions of novice mutual fund investors who have poured billions into the stock market since October 1991 face a daunting choice.

The first real sell-off In more than three years means those investors need to decide whether to sell. After five straight days of losses, it may be too late. "I don't think it's time to panic," said J. Michael Pinson, a Clearwater investment adviser. "But it is time to realize the reality of financial markets." That reality is this: The stock market will not rally when interest rates are headed up, he said.

And interest rates in a strong, growing economy are clearly headed up. "The answer is, you should have gotten out at 3,800 or 3,900, when I warned of a market correction two months ago. Now that it is already falling, do you get out or ride it out? I'm going to leave it up to them. The long-term investor, who will keep money in the market for 5 to 10 years, will continue to do well." The Dow Jones industrial average closed Wednesday at 3,626.75, its lowest level since Nov. 4.

Sonny Bloch, a business talk show host and financial author based in Clearwater, said the bottom for the Dow Jones will be at least 3,300, and maybe lower. "If you're in the market, now is not the time to run. You'll get hurt," Bloch said. "If you're not in, don't go." But much as the mutual fund investors fueled three See PANICKING, Page 8 '86 '88 '90 92 '94 72 74 76 78 "60 '82 '84 Index measured In six month Intervals Source: Standard Poor's Associated Press graphic nies may release lower-than-ex-pected earnings increases in future quarters. Rising rates tend to slow economic activity as people become less willing to take loans to buy houses and cars and companies borrow less to finance ex pansion.

"Our concern is that a growing bear case may be building amid a re-emergence of deflationary pressures and a weakening economy, See STOCK, Page 2 Silver King could form 5th network By LISA BACKMAN Tribune Staff Writer ST. PETERSBURG Silver King Communications Inc. owns one of the last groups of independent television stations with which a fifth network could be created, a key reason for media mogul Ted Turner's interest. The reported discussions be- tween Turner New Heineken exporter not crying in beer When it's not Miller time, what time is Heineken time? Rick Grajirena certainly hopes so. Grajirena's Tampa company.

First Republic LC, is the exclusive Miller beer distributor for Moscow. And the company recently signed a letter of intent to become Heineken's distributor in the Russian capital as well. I Heineken is already sold in this city of 1.2 million people. But, as with some other European and U.S. beer brands sold there, it doesn't have an exclusive distributor, Grajirena said.

Instead, stores, restaurants, hotels and bars that want to buy the Dutch product have to pick the cases up themselves after they are shipped and delivered to duty-free zones set up in the Moscow area. Winning the Heineken distributorship is considered a real coup. Heineken, after all, is the No. 1 export beer in the world. And since this premium beer is produced in Europe, the time it will take to get from brewery to store shelf should be considerably less than the time it takes to ship and deliver Miller products, Grajirena said.

It can take about a month to ship the Miller products from their U.S. breweries to their final destinations in Moscow. Heineken should only take about a week. Beer on ice hopefully. First Republic will avoid disasters such as the one it experienced a short time ago when 15 containers, or about 28,000 cases, of Miller beer sat Jrozen on the dock at the port in St.

Petersburg, Russia, simply because there were no rucks available to transport the containers. 1 Another example of the potential night-Jnares of exporting. Grajirena doesn't expect sales of the Dutch beer to interfere with the 1,400 cases of Miller products he sells in the Moscow each week. Miller Genuine Draft has been a particularly good seller in the Russian capital, although the company hasn't attempted to distribute Miller Lite yet in that market. Light beers still appeal more to the Western consumer's palate, he said, v- Of course, maybe light beer just isn't a city thing.

First Republic may find a slightly different consumer audience soon when it spreads its network outside of Moscow. Miller recently expanded the company's exclusive distributorship to a 300-mile radius around Moscow. The popcorn connection First Republic is also hoping to open up other avenues for new products. It has linked up with Blevins Concession Supply a Tampa snack-food distributor, to test the Moscow market for popcorn sales in movie theaters. While most of the theaters sell beer, they haven't apparently discovered the wonders of high profit margins on popcorn sales to moviegoers.

The two Tampa companies will try several options to convince theater operators to sell the Blevins corn, including possibly offering the popping machines free if a theater agrees to buy the popcorn. Of course, they'll surely throw in the salt as well, the seasoning that has been inextricably linked to increased beer sales. Turner Broadcasting System and Home Shopping Network Close Chg. 21 -1 Inc. and Silver King are drawing attention to the quiet HSN Close i Chg.

12V8-1 Silver King 'X fi.jUi.lfc-J 'I i III if -r i 'fill' v- (K television station company. Silver King, located in a nondescript office build Interstate bank bill expected to become law An Associated Press Report TALLAHASSEE Gov. Lawton Chiles appears ready to sign or let become law a bill passed Wednesday by the Legislature to allow nationwide banking in Florida. The Senate voted 38-0 for a bill to allow banks outside the Southeast to acquire Florida-based banks and allow state-chartered banks to acquire institutions virtually anywhere in the country. The House already had passed the bill 116-0.

A spokesman for the governor said lawmakers apparently had addressed his concerns that the original legislation may hurt banking competition in Florida. The legislation will replace a regional banking agreement that has been in place for the past decade that only allowed banks in a 12-state Southeastern region and the District of Columbia to do business within those states. NationsBank Corp. and First Union both based in Charlotte, N.C., and others pushed the interstate banking legislation this session to allow them to expand outside Florida and other Southeastern states. If it becomes law, Florida would join a growing number of Southeastern states that have dropped out of the regional agreement.

Congress also is considering a federal interstate banking bill this year. Under the Legislature's bill, a state-chartered bank must be at least 2 years old to be acquired by an out-of-state institution. The legislation would allow out-of-state banks to acquire institutions in Florida as long as their states allow Florida banks to buy institutions in those states. In addition, an out-of-state bank looking to buy a Florida institution will face the same regulations in Florida as those imposed by the out-of-state bank's home state. The bill would not take effect until May 1, 1995.

"I think the market is going to be such that we will see totally more banks, which mean the services are going to be more competitive," said Sen. Fred Dudley, R-Cape Coral, a sponsor of the bill. Opponents have said interstate banking could result in the creation of a few large banks and drain jobs, deposits, and credit for small and start-up businesses from Florida to other states. Sen. Rick Dantzler, D-Winter Haven, compared nationwide banking to a major retail chain like Wal-Mart that could hurt small, independent competitors when it moves into an area.

"It really bothers me about what the trend is going to be for any small business person," he said. Close Chg. 11 Ve ing around the maamm corner from Home Shopping's headquarters, is the nation's seventh-largest television station company, reaching about 16 percent of all households, according to Cable Broadcast magazine. It reaches 28 million households with its 12 independent stations in eight of the 12 largest television markets, including New York City, Los Angeles and Chicago. It also has 14 low-power stations.

"Silver King has really, really powerful potential," said John Mo-tavalli, a reporter for Inside Media, a New York trade publication. "Many independent stations not spoken for by Fox have been spoken for by Time Warner and Paramount," Motavalli said, referring to the entertainment companies that have been snapping up affiliate stations for their attempts See SILVER KING, Page 8 JOHN R. STANMEYERTribune photo Bob Orick, editor at Silver King Communications, edits videotape with Karen Colbert in their Clearwater studio Wednesday. Silver King reaches 28 million households, or about 16 percent of all households, with its 12 independent stations in eight of the 12 largest television markets. Duke, favored in Final Four, has straight A's in bond market Taking stock in changing times: Have you looked at your personal stock portfolio lately? Does it look the same as it did 10 or 20 years ago? Is it bogged down with the IBMs, Dow Chemicals and other darlings of the 1960s? How does your current collection of investments stack up against professional manager's changing portfolios? Well, for comparison, you may want to take a look at the changing face of the top-10 stock list compiled by Stein Roe Farn-ham.

The hot picks during the 1960s, according to the Stein Roe analysts, included: AMP, Bristol-Myers, Corning, Digital Equipment, Dow Chemical, Eastman Kodak, IBM, Minnesota Mining, Rohm Haas and Schlumberger. Had you followed their picks in the 1980s, you would have been buying Capital Cities, Coca-Cola, Hewlett Packard, Intel, Johnson Johnson, Merck, Philip Morris, Toys 'R' Us, Wal-Mart and Waste Management. For the 1990s, these professional pickers are looking to lock in mainly on service-oriented concerns as the classic growth companies. Their latest top-10 lists for the first time includes two foreign companies. Companies on the "next generation" stock pick list from Stein Roe are: Airgas, Block, First Data, First Financial Services, Groupo Televisa, Home Depot, Pro-mus, Sysci, Telmex and Vlue Health.

A Bloomberg Report NEW YORK If bond analysts were odds-makers, Duke would be favored to win the Final Four. Duke University, a perennial basketball powerhouse, is in better financial shape than the Universities of Arizona, Arkansas and Florida, analysts and investors said. "Duke University is a strong credit. Its 'AA' bond rating bears that out," said Christine Maxwell, associate director at Standard Poor's Corp. Moody's Investors Service rates Duke bonds "Aal." Moody's said it rates University of Arizona issues "Al," and Arkansas University bonds Moody's rates some Florida university system bonds though debt sold for the University of Florida is rated "Aaa" when the Board of Regents buys bond insurance.

All of the bonds are investment grade, considered safe for conservative investors. Duke plays Florida and Arkansas meets Arizona on Saturday in the semifinals of the National Collegiate Athletics Association's basketball championship in Charlotte, N.C. Duke, the only private university among the Final Four, gets high marks from analysts because of the school's $1.2 billion endowment. Duke also is in demand among potential students, a good sign for a university, analysts said. "It's a first- or second-choice school rather than a third-or fourth- choice institution," said Maxwell.

In the fall of 1992, Duke accepted 26 percent of student applications, and 42 percent of those accepted matriculated at the university, she said. To be sure, the other Final Four schools have their fans. The long shot of the tournament, Florida is considered a steady performer in the bond market. Florida university system bonds are considered good investments that bondholders rarely sell. Revenues pledged for more than $160 million state university system bonds "provide adequate coverage of projected debt service requirements," Moody's said.

The university's appearance in the Final Four may help bondholders, traders and Investors said. "Alumni like to buy the bonds when there is a heightened awareness of the university," said Timothy Browse, who manages an Arkansas tax-free fund for Eaton Vance Management. "It fosters additional demand." Florida's students and fans, and their counterparts at Arkansas, Arizona and Duke, will be in full frenzy this weekend. The bond market's reaction is expected to Ibe less frantic. JAY CONNERTrlbune photo tors basketball team advanced to the NCAA Final Four on Sunday.

The shop sold the eight dozen T-shirts, four dozen hats and nine dozen mugs and shot glasses this week. The shop has scored big with the championship wins of the football teams of both schools. Frank King displays some of the University of Florida Final Four merchandise at Heads and Tails, a south Tampa shop that sells Florida State University Seminoles and UF Gators paraphernalia. The store has been selling out of T-shirts, hats, coffee mugs and shot glasses since the Ga-.