Volatility boosts US securities

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The Independent Online
THE CHURNING share market that followed the latest rise in American interest rates helped to keep profits rising at US securities firms in the last quarter, writes Larry Black.

Wall Street, which this week begins to report results for the first three months, would otherwise have turned in its first flat quarter of the 1990s, a survey of securities analysts suggests.

Narrowing interest-rate margins and a slowing of investment banking business have already begun to take their toll on 1994 earnings growth.

Of the big public US firms, analysts say only Salomon Brothers is likely to report higher profits for the first three months of 1994. The consensus estimates of several analysts suggest that the full-year profits will actually decline by 10 to 20 per cent.