Pittsburgh Post-Gazette from Pittsburgh, Pennsylvania • Page 14

DOW 6,544.09 101.60 B-6 PITTSBURGH POST-GAZETTE SATURDAY, JANUARY 4, 1997 -1" Chrysler sets sales record; GM falters By Brian S. Akre The Associated Press 4 LOS ANGELES Chrysler Corp. easily broke its U.S. sales record last year with a 13 percent gain over 1995, while General Motors Corp. posted a 3 percent decline as many of its oldest products ended their run.

Chrysler yesterday said that the 2.45 million cars and light trucks it sold surpassed the company's previous high of 2.21 million in 1988. Chrysler's 1995 sales were 2.16 million. GM sold 4.7 million light vehicles last year, down, from 4.8 million in 1995. GM was hampered by an unusually high number of new product some of which have been slower than resulting in lost production. GM also lost production' in the fourth quarter from a series of contract-related strikes in the United States and Canada.

Among the major Japanese automakers that reported yesterday, Nissan's U.S. sales declined 2' percent last year while Toyota's increased 6 percent on the strength of a 26 percent rise in truck Ford Motor Co. and Honda planned to report their! sales figures Monday. December sales at Chrysler, the No. 3 domestic, Las Vegas News BureauAssociated Press The Flamingo Hotel, shown in an undated photo, was one of Las Vegas' most elegant resorts in the 1940s and 1950s.

The hotel Bugsy built Las Vegas' Flamingo brought glamour to a cow town i' Heating oil, gas costs may stay high By H. Josef Hebert The Associated Press WASHINGTON With the coldest months of winter still ahead, the government said yesterday that heating oil prices will stay high up 10 to IS cents a gallon from last winter. And motorists next summer should brace for the same high gasoline prices they saw last year. Despite a mild December in the Northeast, where oil is most widely used for residential heating, fuel stocks remain below normal and prices high with a $1.16 a gallon average at Christmas time. That was almost 20 cents a gallon higher than the same time a year ago.

Assuming normal weather for the first quarter of the year, prices are likely to ease during the first quarter of 1997, the Energy Department said. But the cost of neating oil on average still is expected to be about $1.06 a gallon for the quarter, or 10 cents higher than in the same period a year ago. If it gets unusually cold, prices could rise an additional 5 to 6 cents. Although stocks have increased in recent weeks, Jay Hakes, head of the DOE's Energy Information Administration, said they are still 6 percent below normal. He said prices are being kept high because of strong demand for both heating oil and diesel fuel, both of which are distillates.

During the past three months, heating oil cost on average $1.05 a gallon, 16 cents more than in the fourth quarter of 1995, said the EIA. But in some areas prices have been much higher. A family of four with an income of $23,400 can get $150 for fuel oil under a federal assistance program. But with the high prices, even if a family watches the thermostat, $150 worth of oil heats a home only for about three weeks, said Rose Bour-goin, who runs the low-income energyassistance program in Bristol, Conn. Hakes attributed the continuing high cost of both gasoline and heating oil to higher-than-expected crude oil prices and the industry's practice of keeping inventories low in anticipation of lower crude prices future.

Crude oil stocks have been "at a historic low" for this time of year, Hakes said. The Energy Department is looking into the industry's inventory practices, which are designed to save tens of millions of dollars in crude oil storage costs. Last month, the American Automobile Association called on the Energy Department to set minimum inventory levels for crude oil and petroleum products such as heating oil and gasoline, saying that gasoline inventories had slipped to precariously low levels. The AAA said that in mid-December its survey showed regular gasoline at almost $1.28 a gallon, the highest for December in six years. The Energy Department, using a different survey, put the average price of regular at $1.22 at the end of December, compared with $1.08 a year earlier.

The EIA predicted that during the peak driving season this coming summer gasoline likely will be about what it was last year on a nationwide average about $1.36 to $1.38 a gallon for all types, and $1.29 for regular self service. automaker, rose 1 percent over year-ago levels, with flat truck sales another sign of weakness following a soft November for the Big Three automakers GM's December sales declined 14 percent, with a nearly 16 percent drop in truck sales and a 13 percent decline in cars. Analyst David Andrea of Roney Co. in Detroit said the soft truck sales at year's end were not cause for concern. November and December sales often fluctuate from year to year because of wild variations in rebates, discount financing and fleet sales.

"That doesn't seem too out of line from what expectations were," Andrea said. "Nobody expects the market to fall off dramatically this year, but -certainly there's going to be some softness." Chrysler has continued to prosper with a strong-' selling line of pickups, sport utility vehicles minivans. Truck sales for the year increased 17 percent, with records set for the Chrysler Town Country and Dodge Caravan minivans, Jeep Grand -Cherokee and Wrangler sport utility vehicles, and Dodge Ram pickup. The company's car sales were up 5 percent in 1996, also strong in light of the generally soft market foH cars domestically. Toyota reported its best year ever in the United States at 1.16 million units, up from the previous record of 1.09 million in 1994.

Flood of money energizes stocks By Bruce Meyerson The Associated Press NEW YORK The Dow Jones industrials charged, 101 points higher yesterday, with money managers using a New Year's rush of new investment money to. take advantage of Tuesday's year-ending slide. Broader measures also rallied, led by Dellwether technology issues, which helped boost the Nasdaq market to its second-biggest point gain ever. The Dow, which actually started its rally late''. Thursday by wiping out most of a 95-point dim finished within 17 points of last Friday's record high, rising 101.60, or 1.6 percent, to close at 6,544.09 and cut its loss for the week to 16.82.

Emboldened by Thursday's late comeback, bargain By Robert Macy The Associated Press LAS VEGAS The $6 million cost was chump change compared with modern times, when half-billion-dol- lar, eye-popping mega-resorts are sprouting on the Las Vegas Strip. But the opening of Benjamin "Bugsy" Siegel's Flamingo Hotel just over 50 years ago forever changed the face and fortunes of this desert gaming mecca. And it marked the beginning of the end for the famed mobster who spent a crime-filled life evading the law but could not escape his own kind. There was no birthday bash when the Flamingo turned 50 on Dec. 26.

And any mob ties were clipped by the time billionaire Kirk Kerkorian bought the famous resort in 1967, later selling it to hotel giant Hilton Corp. "The Bugsy image was not something that was particularly endearing to the Flamingo or Hilton," Flamingo Hilton spokesman Terry Lindberg said recently. "This was not George Washington or Abraham Lincoln. We're talking about a robber, rapist and murderer. Those are not endearing qualities.

"We want to remember the history of the Flamingo without glamorizing it. We've made a conscious decision to distance ourselves from the Bugsy heritage." The Flamingo tore down the last vestige of the Siegel saga a couple of years ago. Known as the Bugsy bungalow, it was a fortified cottage with concrete walls 3 to 4 inches thick, built to soothe the nerves of an increasingly paranoid Siegel. Siegel was one of the mob's most feared tacticians, with a rap sheet ranging from drug dealing to white slavery, bookmaking to murder. None of the charges ever stuck.

In 1936, he was sent from New York to oversee the mob's West Coast operations in Los Angeles. He made numerous visits to Las Vegas, a remote, desert-locked gambling outpost. The suave Siegel, known for his Hollywood good looks and hair-trigger temper, dreamed of a flashy gambling oasis. Legend has it that in early 1945, he picked a lonely spot seven miles from downtown Las Vegas and kicked at some dirt in a symbolic ground-breaking for his fabulous Flamingo. Siegel had coaxed $1 million from great, but no locals came.

Las Vegas was cowboy hotels; this was Monaco." The Flamingo closed on Feb. 1, 1947, while construction was complet- ed on the 200 hotel rooms. It reopened March 1, 1947, and was beginning to emerge from the red. But the recovery wasn't fast enough for Lansky and Luciano, who wanted an accounting of the money they'd sunk into the Nevada desert. For the first time since he was a teen-ager, Bugsy was receiving not delivering heat from the mob.

On June 19, 1947, Siegel and Hill had one of their celebrated fights, and she boarded a plane for Paris. Some suggest she'd been warned to stay clear of her lover. Then, on June 20, 1947, Bugsy visited movie pal George Raft in Hollywood, tended to some Flamingo business, dined with friends, then returned to Hill's Beverly Hills mansion. About 10:30 p.m., someone crept through the shrubbery at the exquisite estate and unleashed a flurry of shots. Two bullets pierced Siegel's.

skull, killing him instantly. The crime has never been solved. Within minutes, word of the execution spread to Las Vegas. Siegel's partners immediately announced they were taking control of the Flamingo. What happened to Virginia Hill? She was called by a congressional committee to testify about the mob in 1951.

She was found dead on a moun-taintop in Austria March 14, 1966. The death was ruled a suicide, but some believe the mob, worried about what she knew, took care of her. The Flamingo? Under the direction of Hilton, the hotel has grown to six high-rise towers comprising 3,642 rooms, making it the fourth-largest hotel in the world. It helped create the glitzy Las Vegas image, and was a forerunner of huge resorts like the Luxor and Trea-, sure Island. Bugsy's dream? Rose Marie recalls Siegel telling her, "In a few years, this whole place is going to be filled with beautiful -hotels." "I thought, 'Are you crazy? In this Comedian Alan King, a longtime Las Vegas performer, remembers a similar Siegel prediction.

"I thought, no wonder they call him Bugsy." Benjamin 'Bugsy' Siegel A gambling dream comes true his mob partners, Meyer Lansky and Lucky Luciano, to build the Flamingo. He found himself stretched thin overseeing West Coast rackets and Las Vegas bookmaking operations, keeping a step ahead of the law, balancing a private life that included a wife and two children in Los Angeles and lover Virginia Hill. Bugsy paid a premium for building materials that were scarce as World War II wound down, and some contractors stole him blind. Old-timers tell of expensive palm trees that were shipped each day from Baker and Barstow, Calif only to be shipped back at night, then back to Las Vegas the next day. He wound up buying the same trees several times.

The $1 million projected cost ballooned to $6 million. Siegel had promised Lansky and Luciano that their Flamingo would open the day after Christmas 1946. It did sort of. The showroom, restaurant and casino were ready, the hotel was not. Entertainer Rose Marie shared the billing opening night, Dec.

26, 1946, with longtime pal Jimmy Durante and band leader Xavier Cugat. Two plane loads of Hollywood stars were recruited to make the short hop to Las Vegas for the gala opening. "There were 30 or 40 big stars, people like Clark Gable, Lana Turner, Joan Crawford, Anne Jeffreys, Caesar Romero," Rose Marie recalled in a recent telephone interview from her home in Van Nuys, Calif. "The show was spectacular, everything was hunters came out in force yesterday, shrugging off, ret anoiner strong economic reading in the morning, didn't hurt that money managers are awash in cash from the reliable flows of new capital from year-end bonuses, contributions to retirement plans, and, reinvestment of money from tax-related selling. The technology-rich Nasdaq composite index rose' 29.98, or 2.3 percent, to 1,310.68.

Advancing issues putnumbered decliners by a 5-tp-; 2 margin on the New York Stock Exchange, where composite volume totaled 452.97 million The Standard Poor's 500-stock list rose 11.02 'to" 748.03; the NYSE composite index rose 4.53 to 394.06; and the American Stock Exchange composite index" rose 3.29 to 572.45. Stocks drew some early support from bonds, which' rose early in the day despite a Commerce Depart-' ment report saying construction spending shot up 1.9 percent in November, the steepest advance in eight months. Dividends rise, but not fast enough to catch up with share prices Shareholders' rewards Annual number of dividend changes by United States companies. HI Reinstated dividends i Increased dividend Decreased dividend news Omitted dividend fit fllflf? iff mm Mmm 3,000 2,000 JllilllZflf I nDnn nRH nWI jljjfj trSESa n-n bit At the end of 1996, it was 2.02 Eercent. Before the current bull mar-et, that figure had never gone below 2.5 percent Historically, when the yield has been low, the value of stocks has often been 'considered too high.

Dividend changes historically are a lagging indication of corporate profit-abiuty and at the same time a sign that corporate boards have confidence in the future. Because dividend reductions are seen as a very bad sign, companies hate to raise payouts to an unsustainable level. There was a slight, and statistically irrelevant, increase in the number of companies that provided bad news for shareholders by either reducing or eliminating their dividends. There were 130 such announcements last year, up from 128 the year before. But that was still the second lowest total since began collecting the data in 1955, and it was less than one-third the number recorded in 1991, after the most recent recession.

The generally good economy no doubt is one reason why few dividends are being cut these days, but simply not being raised the way they used to be. In this buoyant stock market companies have seen relatively little demand for higher payouts from shareholders who, after: all, have been seeking and getting capital gains. And many companies, argue that they are effectively return-, ing money to shareholders by repun- i chasing their own shares. Arnold Kaufman, the editor of The Outlook, the newsletter that reports on dividend actions, said he thought that if price gains were harder to come by this year, investors might be more inclined to push for dividend increases. There would seem to be plenty of room for such increases.

The payout ratio the percentage of corporate profits returned to shareholders through dividends is likely to be around 40 percent when final earnings figures for the year are recorded, Kaufman said. That is down from 41 percent in 1995 and not far above the record low of 38 percent set in 1979. By Floyd Norris The New York Times NEW YORK U.S. companies raised dividends at a rapid rate last year, but the increases did not come quickly enough to keep up with share prices. i Data released by Standard Poor's Thursday showed that 2,171 U.S.

companies increased their dividend payouts in 1996, up 13.8 percent from the prior year and the most for any year since 1980. At the same time, the dividend payout on the stocks in the Standard Poor's 500 stock index rose 8 percent. That was the largest increase in the dividend payout since 1990, when it rose 11.5 percent, but the increase did not even come close to the 20.3 percent price rise shown by the 500 in 1996. As a result, the dividend yield on the index once watched by many as a barometer of market valuation fell to a record low of 1.97 percent in November, though it has since risen a bit, as some companies raised payouts and share prices slipped a 1,000 1,000 70 78 80 85 'W '95 N.Y. Times News Service 60 '65 Source: Standard Poor1 "5 another one is that dividends.