WALL STREET STOCKS/PAPER AND LUMBER PRODUCERS
Stocks of paper and lumber producers
tumbled as a rumor spread that the Japanese may impose tariffs
on wood and paper products, analysts and industry officials
said. But, they said, logic and their own research do not
support the rumors.
    "Apparently a rumor is floating around trading circles
about the Japanese doing something about tariffs on wood and
paper products," Lowell Moholt, director of investor relations
at Weyerhaeuser Co said. "And we can only assume that this
rumor is one of the factors hurting the stocks."
    "I have talked to many people, some with government
contacts, and most of them have been mystified by the rumor,"
said Moholt.
    Nevertheless, International Paper <IP> fell 4-3/8 to
95-1/2, Weyerhaeuser Co <WY> two to 51-1/2, Potlatch Corp <PCH>
3-1/2 to 69, Great Northern Nekoosa <GNN> 3-1/8 to 85-1/2,
Temple Inland Inc <TIN> 2-3/4 to 57-1/4, Boise Cascade 2-3/8 to
74-3/8, Georgia Pacific Corp <GP> 1-1/2 to 43-3/4, Champion
International Corp <CHA> 1-3/8 to 36-1/2 and Pope and Talbot
Inc <POP> 1/2 to 36.
    "My sources told me there is no grain of truth to the
Japanese imposing tariffs," Sherman Chao, analyst with Salomon
Inc said. "The realities and the logic do not support these
rumors," he said.
    "The Japanese have a lot more to lose by imposing tariffs.
They are running a trade surplus," he said, "and if they
started a trade war it would hurt them more than the U.S."
    Chao said that U.S. producers annually export about two
billion dlrs of forest products to Japan. "Three quarters of
that is in the form of wood products, meaning logs, wood chips
and lumber, and the balance is paper products."
    "They (the Japanese) don't have any domestic sources to
make up for the restrictions," Chao said, "so it's not like
they would put a tariff to protect their own industry."
    "The rumors do no make economic sense, and I am skeptical,"
analyst Mark Rogers of Prudential Bache Securities said, "but
politics has been known to override economic concerns."
     Speculation has surfaced on Wall Street recently that the
Japanese would take action to retaliate against tariffs the
Reagan Administration imposed last Friday on Japanese
electronics products.
    Rogers said the rumor fueled the profit taking that was
already occuring in these stocks. "In a nervous market, people
tend to take profits, and they tend to take profits that have
been the biggest gainers lately."
 Reuter
