Despite Wall Street woes, Main Street unruffled
How the stock market plays in Peoria
A few steps from the corner of Jefferson and Main in downtown Peoria, a brokerage sign flashes stock-market data in big red numbers. It's noon and the Dow is nose-diving again. But the lunchtime crowd takes no notice.Skip to next paragraph
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It's not that Main Street has ignored the foul wind blowing from Wall Street. It's just that out here in the heartland, jobs and income usually matter more.
Yes, the downturn has slowed this Illinois economy a little. But nothing not accounting scandals, corporate fraud, or the red ink flowing in so many portfolios has dimmed Peoria's long-term outlook. "So far, people are still optimistic about the future," says Bernie Goitein, a Bradley University professor who tracks local consumer sentiment.
"My inclination is to go back into the market," says corporate executive Roy Endres, who has lost at least a quarter of his net worth.
There's no question that Main Street's ties to Wall Street grew stronger during the 1990s. At last count (in 1997), nearly half of American families owned stock or mutual funds up from a third in 1989. But that still leaves millions of Americans, including restaurant worker Monte Kruzan, without a direct stake in the market. "It doesn't affect me," he says, glancing at the flashing brokerage sign in downtown Peoria.
Yet finances are on everybody's mind. A month ago, real-estate developer Bob Wilkins was having his teeth cleaned when his dentist asked for help. He had pulled all his money out of stocks and wanted to invest in something more rewarding than a money-market fund. Mr. Wilkins found him an apartment building that the dentist is now considering.
"People are taking money out of stocks and moving it into their personal homes," says Wilkins. As a result, his business has prospered. So far, sales are hovering only about 5 percent below his best year ever.
People's biggest concern here: the string of corporate and accounting scandals. "The Enron thing and stuff like that are very much a concern to anybody who works for a large corporation," says David Chapman, president of the United Auto Workers local representing Caterpillar unionized workers.
As the region's largest employer, Caterpillar holds huge sway over Peoria's economy. Despite weak markets, the manufacturer of construction equipment and engines forecasts a profit this year.
While things are not all rosy among Peoria's companies (a mail-order firm has closed its doors, and foreign competition nearly put the local steel plant out of business), the current downturn pales in comparison with the early 1980s. Then, high interest rates and foreign competition decimated both Caterpillar and Peoria.
"What we had in the '80s was a wrenching, chance-of-dying type of period," recalls Roberta Parks of the Peoria Area Chamber of Commerce. "People were taking their keys to the bank and leaving them" because they could no longer afford the mortgage payments.