A veteran editor told a group of journalistic novices about a decade ago that he read the financial pages regularly because "what is on the financial pages today will be on the front page in six months to a year."
In the ensuing 10 years, many other readers have discovered the financial pages of the daily newspaper, too, as the economy moved from the relative tranquility of the 1960s to the volatility of the 1970s.
In response, most of the nation's major dailies, The Washington Post included, have increased substantially their commitment to the coverage of the economic, business and financial news.
Financial pages, like the rest of the newspaper, contain many stories of interest to most readers and some stories of interest to fewer readers.
Financial pages also contain vast amounts of statistical information on trading in stocks, bonds, options, government securities and commodities. The information may seem bewildering to the average reader. What follows is a reader's guide of sorts to the major statistical tables that appear in The Washington Post: Stocks
A share of stock is a part ownership of a corporation. Investors -- be they individuals, trusts, mutual funds or other corporations -- can buy and sell shares of stock. Stock is traded either on organized exchanges such as the New York Stock Exchange or on what is called the over-the-counter market, a loosely knit network of brokers who stand ready to buy stock in a certain company from the public or to sell stock to the public.
The tables in The Washington Post carry trading data on large numbers of stocks, including those traded on the New York and American stock exchanges, the Philadelphia Exchange and the over-the-counter stocks traded on the National Association of Securities Dealers Automated Quotations (NASDAQ) system. Here is a typical quotation of General Motors Corp. stock from last Thursday's edition, reflecting trading in the stock on Wednesday on the New York Stock Exchange and elsewhere:
The numbers look confusing, but there is a purpose to every figure. The first two -- 64 3/4 and 39 1/2 -- tell you the price range in which the stock has traded during the last 52 weeks. In the case of General Motors, the stock has sold as high as $64.75 and as low as $39.50. Stock prices are quoted in whole numbers. Next the stock is identified, usually with some comprehensible shorthand notation such as GMot for General Motors.
Following the name of the corporation is the annual dividend (a return of profits to shareholders) based on the last quarterly or semiannual dividend. General Motors is paying $3.85 a year per share. The small footnote 'e' after the dividend -- all footnotes are identified at the end of one of the stock tables -- indicates that $3.85 a share was the actual dividend GM paid during the preceding 12 months.
The following number -- 7.3 -- reflects the percentage return on investment the dividend represents at the current price of the stock. In the case of General Motors, the dividend represents a 7.3 percent return based on last Wednesday's closing price.
Next the tables tell you the relationship between the price of the stock and the earnings of the company. In GM's case, the stock is selling at 86 times its per-share earnings. That is exceptionally high, but General Motors is having severe financial difficulties and remains a popular stock.
The next number -- 1026 -- reports in hundreds how many shares of GM stock were traded Wednesday. To get the right figure, you must add two zeros. On Wednesday, 102,600 shares of General Motors stock were traded.
Finally, the tables tell you the highest price GM reached on the trading day in question, the lowest price that day, the final -- or closing -- price and the difference between that day's close and the previous day's.
General Motors last Wednesday traded as high as $53.25, as low as $52.25 and closed the day at $52.75, up 37 1/2 cents (three-eights of one dollar) from its close last Tuesday. Bonds
Bonds are long-term debt securities issued by corporations, local governments or the federal government. They carry a fixed rate of return and, at the end of the "life" of the security, can be cashed in for the face value. Because the interest rate on the security does not fluctuate, while competing interest rates do, the price of a bond rises or falls instead. The price is measured in terms of $100 of face value of the bond.
International Business Machines, whose outstanding bonds (and shorter-term notes) are traded on the New York Stock Exchange were reported like this for last Wednesday:
The IBM bonds in question pay 9 1/2 percent on their face value, $100, and mature in 1986. At the current price of the bonds, they yield investors 10.3 percent and closed at $92.25 last Wednesday, 12.5 cents higher than they closed on Tuesday.
On Wednesday, then, to buy a $100 face value IBM bond, an investor had to put up $92.25.