Stocks tumbled Thursday after reports of robust economic activity sent interest rates soaring. Investors, instead of being reassured by a number of companies' good quarterly reports, apparently decided the earnings growth could not be sustained because of higher rates.
MORTGAGE RATES SLIP. Thirty-year, fixed-rate mortgages averaged 8.85 percent this week, down from 8.93 percent last week, according to a national survey released Thursday by the Federal Home Loan Mortgage Corp. On one-year adjustable rate mortgages, lenders were asking an average initial rate of 5.77 percent, unchanged from last week. Fifteen-year mortgages averaged 8.30 percent this week, down from 8.40 percent a week earlier. The rates do not include add-on fees known as points.
Phone companies face cable scrutiny
Federal regulators sent two messages Thursday to local telephone companies hoping to offer video programs over their lines: They cannot use revenues from telephone customers to subsidize their new television businesses unfairly, and their networks must be available to any video-program provider who wants to lease channels on them.
The new rules, approved by the Federal Communications Commission after years of fierce lobbying, lay the foundation for phone companies to become the first real competitors to the $21-billion-a-year U.S. cable television industry.
Consumer groups and cable lobbyists criticized the agency for not going further to protect telephone subscribers from rate increases. Cable operators contend phone companies would get an unfair advantage if they subsidize video services by raising phone subscribers' bills.
HOUSING STARTS RISE. Builders boosted residential construction 4.4 percent in September to the highest level in nine months, the Commerce Department said, leading analysts to predict yet another Federal Reserve interest rate increase to head off inflation.
REFLECTONE GETS CONTRACT. Reflectone Inc. of Tampa said it was granted a $2.6-million contract from Alenia Aeronautica of Italy to modify a U.S. Marine Corps aircraft maintenance trainer. Alenia Aeronautica exercised an option in an earlier contract, bringing the total value of the job to about $5.6-million.
AGENCY INCREASES DIVIDEND. Tampa-based insurance agency Poe & Brown declared a quarterly cash dividend of 12 cents a share, a 2-cent increase from the current dividend. The dividend is payable Nov. 18 to shareholders of record on Nov. 4.
The National Labor Relations Board charged two Denny's restaurants in New Jersey fired overnight employees because they tried to organize a union. Flagstar Cos., Denny's parent, declined to comment, according to Bloomberg Business News . . . Craig Lentzsch, a former executive and current board member of Greyhound Lines Inc., was named the new president and chief executive officer of the struggling bus company Thursday, succeeding Frank Schmieder, who resigned in August . . .
The second time around
Percent of all magazine paper that is recycled:+
+Survey of 57 publishing companies; recycled paper contains at least 10% post-consumer recycled fiber
Source: Magazine Publishers of America; research by Pat Carr
DOW 30 INDUSTRIALS 3911.15 -24.89
DOLLAR JAPANESE YEN 97.10 -0.18
YIELD 30-YEAR U.S. BOND 7.99 +0.10