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 &lt;IP> fell 4-3/8 to 95-1/2 Weyerhaeuser Co &lt;WY> two to 51-1/2 Potlatch Corp &lt;PCH> 3-1/2 to 69 Great Northern Nekoosa &lt;GNN> 3-1/8 to 85-1/2 Temple Inland Inc &lt;TIN> 2-3/4 to 57-1/4 Boise Cascade 2-3/8 to 74-3/8 Georgia Pacific Corp &lt;GP> 1-1/2 to 43-3/4 Champion International Corp &lt;CHA> 1-3/8 to 36-1/2 and Pope and Talbot Inc &lt;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) dont have any domestic sources to make up for the restrictions Chao said so its 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.
WALL STREET STOCKS/PAPER AND LUMBER PRODUCERS