Reported by Star-Bulletin staff & wire
Thursday, June 5, 1997
WASHINGTON -- Average interest rates on 30-year, fixed-rate mortgages fell this week to the lowest level since March. The average fell to 7.85 percent from 7.94 percent a week earlier, the Federal Home Loan Mortgage Corp. said today. Thirty-year mortgages
fall to 7.85 percentFifteen-year mortgages averaged 7.40 percent this week, down from 7.47 percent a week earlier. On one-year adjustable rate mortgages, lenders were asking an average initial rate of 5.78 percent this week, down from 5.83 percent.
The rates do not include add-on fees known as points.
NEW YORK -- The New York Stock Exchange said it planned to quote stock prices in pennies instead of fractions by January 2000, in a move intended to give investors the best available prices. NYSE to drop fractions
for decimals on quotesIn the meantime, the world's biggest stock exchange will quote shares in increments as narrow as one-sixteenth of a dollar later this month, pending approval by the Securities & Exchange Commission. The decisions were made today by the NYSE's board, according to Bloomberg News.
"Decimals will be a key step toward a more global NYSE and prices more easily understood by individual investors," said NYSE Chairman Richard Grasso in a statement.
"The move to sixteenths will ensure that the NYSE continues to provide investors with the best possible prices while the brokerage community prepares itself for decimal-based pricing."
The NYSE, which led the resistance to decimal pricing in recent months, will be the first U.S. stock market to end a 200-year-old practice of trading shares in fractions of a dollar.
Trading in decimals is expected to narrow trading spreads between buying and selling prices. Stocks are currently quoted in eighths of a dollar, or 12.5 cents, and the interim move to sixteenths will narrow those quotes to 6.25 cents. A narrowing of spreads would cut into dealers' profits.
NEW YORK -- Dow Jones & Co. said investors will soon be able to trade options, futures contracts and a fund based on the most widely watched market gauge for U.S. stocks, the Dow Jones industrial average. Dow OK's index, futures trading
on industrial averageBuying and selling the contracts will allow traders to speculate on the direction of the 30-stock Dow industrials and to protect the value of investments from market swings.
Dow Jones said it licensed the average for trading with an exchange-based fund on the American Stock Exchange, for futures contract trading on the Chicago Board of Trade and for options trading on the Chicago Board Options Exchange. Options and futures trading would make it easier for mutual fund managers to track the average.
Investing in funds that mimic market barometers, especially the benchmark Standard & Poor's 500 index, has been the fastest growing area of the mutual fund industry recently.
The moves come amid pressure from Dow Jones shareholders to boost the revenue and profitability of the publisher of the Wall Street Journal.