[21200001] |Japan's production of cars, trucks and buses in September fell 4.1% from a year ago to 1,120,317 units because of a slip in exports, the Japan Automobile Manufacturers' Association said.

[21200002] |Domestic demand continues to grow, but its contribution to higher production was sapped in September by the estimated 2% fall in imports, accompanied by a growing tendency for Japanese manufacturers to build vehicles overseas, according to the association.

[21200003] |The association said domestic demand grew 8.8% in September.

[21200004] |Demand has been growing consistently under the encouragement of pro-consumption government policies, an association spokesman said.
[21200005] |He also said the introduction of a 3% consumption tax in April has helped sales.
[21200006] |The new tax, though a source of general resentment among Japanese taxpayers, replaced a higher commodities tax that applied to automobiles.

[21200007] |Japanese domestic motor-vehicle sales rose 12% in September, the Japan Automobile Dealers' Association said earlier this month.
[21200008] |The manufacturers' association will issue statistics on vehicle exports later this month.

[21200009] |Production of cars rose to 801,835 units in September, a 5.5% increase from a year earlier.
[21200010] |Midsized cars accounted for the greatest growth in units, rising 62,872 units to 134,550 units, or 88%.
[21200011] |Minicar output more than tripled.
[21200012] |Manufacturers produced 46,835 of the vehicles -- which have engines of 500 cubic centimeters or less -- an increase of 31,777 units.

[21200013] |Total truck production fell 22% from a year earlier to 315,546 units.
[21200014] |Minitruck production fell 13% to 94,243 units.

[21200015] |Bus production also slipped, by 49% from a year earlier to 2,936 units.
[21200016] |The association spokesman said bus production has declined since January, but couldn't offer an explanation for the fall.
[21200017] |Auto production for the first half of the fiscal year, which began in August, totaled 6,379,884 units, the association said.
[21200018] |Half-year production was up 3.4% compared with the same period a year earlier.

[21201001] |Stock of United Airlines parent UAL Corp. gyrated wildly yesterday amid speculation that one or more investors may challenge the UAL board's decision to remain independent instead of pursuing a buy-out or other transaction.

[21201002] |The board's decision, announced after the market closed Monday, initially prompted a severe sell-off in UAL shares, which at midday traded as low as $145 a share, down $33 a share, in composite trading on the New York Stock Exchange.

[21201003] |The deepening bloodbath for takeover-stock traders, who by then had seen UAL stock tumble 49% since Oct. 12, also triggered a marketwide sell-off that sent the Dow Jones Industrial Average down more than 80 points at 10:40 a.m.

[21201004] |But then steady, concentrated buying by Bear, Stearns & Co., which frequently buys stock for corporate raiders, took hold and steadied the fall in UAL, which eventually buoyed the entire market.
[21201005] |The industrial average closed down only 3.69 points at 2659.22.

[21201006] |Late in the afternoon, several big purchases by Bear, Stearns, particularly a block of 200,000 shares at 2:43 p.m. at $150 a share, triggered a buying spree that took UAL up more than 18 points in the final hour of trading.

[21201007] |UAL stock closed at $170 a share, down $8.375.
[21201008] |Volume was a tumultuous 4.9 million shares, or 22% of the 21.8 million UAL shares outstanding.
[21201009] |Traders estimated that Bear, Stearns bought more than 1 million shares.

[21201010] |The two most frequently rumored buyers, neither of whom would comment, were Coniston Partners, which battled the UAL board in 1987, and New York real estate developer Donald Trump, who recently made and withdrew an offer for American Airlines parent AMR Corp.
[21201011] |However, one person familiar with UAL said the signs pointed to Coniston because Mr. Trump hasn't asked for permission to buy more than $15 million of stock under federal antitrust rules.

[21201012] |Takeover-stock traders, stung by their huge losses in UAL stock, remained eager for some action by an outside catalyst following the collapse Oct. 13 of a $300-a-share, $6.79 billion labor-management buy-out.
[21201013] |Their hope was that the catalyst would seek to oust the board in a solicitation of shareholder consents.

[21201014] |Baker, Nye Investments, a New York takeover-stock trader that owns UAL stock, wouldn't comment on reports the firm is considering seeking such a shareholder vote.
[21201015] |But partner Richard Nye said, "This is the most extraordinary failed transaction I've seen in 25 years in this business.
[21201016] |It would make sense for somebody to do it.
[21201017] |I have never seen a case of incompetence shared by so many participants."

[21201018] |In 1986, Baker, Nye waged a proxy fight for control of Leaseway Transportation Inc. that ultimately led to Leaseway's being sold.

[21201019] |Some traders pointed hopefully to earlier estimates by UAL's investment adviser, First Boston Corp., that recapitalizations could yield $245 to $280 a share.
[21201020] |But those would require pilots' cooperation.

[21201021] |Any investor who acquires UAL stock in an attempt to force a buy-out or recapitalization must deal with United's contentious unions.
[21201022] |The pilots are working under an expired contract, and the machinists contract expires next month.
[21201023] |That gives them enormous leverage, including the threat of a strike to block any buy-out or recapitalization attempt they oppose.

[21201024] |However, a catalyst like Coniston could seek shareholder support for a sale to a labor-management group at the last price discussed by that group before the board meeting Monday.
[21201025] |The pilots had been working on a buy-out bid between $225 and $240 a share, or $5.09 billion to $5.42 billion.

[21201026] |One person familiar with UAL said the unsettled labor situation and the uncertain world-wide financial markets contributed to the board's decision to avoid "rushing around selling the company at a bargain price," particularly since it accepted a $300-a-share offer just last month.

[21201027] |Even some takeover-stock traders said they couldn't quarrel with the board's logic.
[21201028] |But the board's decision prompted many to bail out of the stock yesterday.
[21201029] |"We had a lot of people who threw in the towel today," said Earl Ellis, a partner in Benjamin Jacobson & Sons, a specialist in trading UAL stock on the Big Board.

[21201030] |Another trader noted that many arbitrage firms are afraid to sell their UAL stock at the bottom, but already own so much they can't buy any more.
[21201031] |"This deal is like a Roach Motel," he said.
[21201032] |"They check in, but they can't check out."

[21201033] |But both the traders and the pilots remain interested in some transaction.
[21201034] |So too, according to many reports, is British Airways PLC, despite its public withdrawal from the buy-out.

[21201035] |The pilots might end up teaming up with their longtime adversaries, the machinists union, in a recapitalization.
[21201036] |The machinists are reviewing proposals they made in the past for recapitalizations that would pay a special shareholder dividend and give employees a minority stake.
[21201037] |The company rejected those past proposals.

[21201038] |It is unclear, however, if the machinists would support a majority stake, as the pilots want.
[21201039] |A machinist official said that would depend on how much in concessions machinists would have to give in return for the majority stake.

[21201040] |Some investors whose names were bandied about by traders as potential UAL stock buyers said they weren't buying.
[21201041] |"I'm not interested," said Dallas investor Harold Simmons.
[21201042] |A source close to Carl Icahn, a corporate raider who owns Trans World Airlines Inc., said he hasn't owned any UAL stock and isn't buying.

[21201043] |One person familiar with Texas billionaire Robert Bass said he isn't likely to make any hostile moves.
[21201044] |And a spokesman for Reliance Group Holdings Inc., which had held 7% of UAL before the first buy-out bid but later reduced its holdings below 5%, wouldn't comment.

[21201045] |Marvin Davis, whose $5.4 billion takeover bid originally put the nation's second-largest airline in play, is limited by a standstill agreement with UAL he signed in September.
[21201046] |The Los Angeles investor can't buy UAL stock, solicit shareholder consents or make a new offer unless he makes a formal offer of $300 a share or UAL accepts an offer below $300.

[21201047] |However, Mr. Davis could pressure the board by asking that the agreement be waived, or letting it be known that he has financing for an offer at a lower price.

[21202001] |Times Mirror Co. said third-quarter net income fell 13% to $70.1 million, or 54 cents a share, compared with net income of $81 million, or 62 cents a share, a year earlier.

[21202002] |The Los Angeles media concern said that the year-ago period included a $26.5 million gain from the sale of assets, primarily timberlands.

[21202003] |Revenue was $873.9 million, up 7.3% from $814.8 million.

[21202004] |Stronger results from the company's broadcast and cable television units and professional and textbook publishing divisions, plus increased advertising at the company's largest newspaper, the Los Angeles Times, offset advertising declines in the company's newspapers in the Eastern U.S., the company said.

[21202005] |"Looking ahead to the fourth quarter, the outlook for the newspaper group remains guarded, with no improvement yet seen in operating trends in our Eastern markets," said Robert F. Erburu, Times Mirror's chairman and chief executive.

[21203001] |Copper futures sold off sharply yesterday, influenced by declines in the stock market and dollar, and a rally in bonds.

[21203002] |December copper opened near Monday's close, tried to rally but failed, and then triggered stop-loss orders on its way down to settle at $1.1510 a pound, off 4.50 cents for the day.
[21203003] |Stop-loss orders are placed previously with instructions to execute them if the market hits a predetermined price.

[21203004] |William Kaiser, president of the Kaiser Financial Group in Chicago, said the decline was almost certainly influenced by the early sell-off in the stock market, which partly reflected a weakening economy.
[21203005] |He said the recent decline in copper stocks was misleading in the face of a slowdown in manufacturing.
[21203006] |Mr. Kaiser said traders could have picked up signals of an imminent price decline had they been watching the scrap metal markets, which became noticeably weaker two to three weeks ago.

[21203007] |But though a weakening economy implies reduced demand, Mr. Kaiser said that Third World copper-producing countries haven't any choice but to sell copper.
[21203008] |They might even step up sales in a falling market, he said, in an effort to maintain the flow of foreign exchange into their treasuries.

[21203009] |Technically, Mr. Kaiser noted that a lot of traders had bought into the market when the price was in the $1.24 to $1.26 range, thinking there was support at the $1.20 level.
[21203010] |When the market fell below that level on Monday and then yesterday couldn't climb above that level, traders started selling out their positions.

[21203011] |Betty Raptopoulos, senior metals analyst at Prudential-Bache Securities in New York, agreed that most of the selling was of a technical nature.
[21203012] |She said the market hit the $1.18 level at around 10 a.m. EDT where it encountered a large number of stop-loss orders.
[21203013] |More stop-loss orders were touched off all the way down to below $1.14, where modest buying was attracted.
[21203014] |Ms. Raptopoulos said the settling of strikes in Canada and Mexico will have little effect on supplies of copper until early next year.
[21203015] |She thinks the next area of support for copper is in the $1.09 to $1.10 range.
[21203016] |"I believe that as soon as the selling abates somewhat we could see a rally back to the $1.20 region," she added.

[21203017] |She thinks a recovery in the stock market would help copper rebound as well.
[21203018] |She noted that the preliminary estimate of the third-quarter gross national product is due out tomorrow and is expected to be up about 2.5% to 3%.
[21203019] |"If the number is a little better, then copper will respond positively, if it is worse then more selling could ensue," she predicted.

[21203020] |Ms. Raptopoulos noted that relating economic numbers to specific market activity is tricky.
[21203021] |Yesterday, for example, "the durable goods numbers came out for September and the number was down only 0.1%," she said.
[21203022] |"However, if you exclude defense-related orders then durable goods were down 3.9%.
[21203023] |I believe that number reflects a slowing economy."
[21203024] |She said copper traders will also be looking toward the release of the index of leading economic indicators next Tuesday.

[21203025] |However, David Threlkeld, president of Threlkeld & Co., an international metals company, noted that so far this year copper consumption is way ahead of the same period of 1988, and that projected production is below last year.

[21203026] |Mr. Threlkeld said the copper market seems to be anticipating a recession in three months, with declining use being the result.
[21203027] |"But," he added, "we have had that exact same perception six times in the last six years."
[21203028] |He noted that currently the ratio of available copper to consumption is about 3.5 weeks.
[21203029] |He said the normal ratio is five to six weeks.

[21203030] |According to Mr. Threlkeld, the bottleneck in copper production isn't at the mines but at the copper refineries.
[21203031] |"It takes three months to turn copper concentrate into cathodes," he said.
[21203032] |If there isn't a recession, he said, "we will be out of copper by the end of March.
[21203033] |If there is a recession that will change the statistical situation."
[21203034] |He thinks that without a recession copper prices could exceed a high of $1.65 a pound, which was reached last year.

[21203035] |In the past Mr. Threlkeld has been known to have substantial long positionsthat is, he had bought copper futures in anticipation of rising prices -- in the copper futures market.

[21203036] |In other commodity markets yesterday:

[21203037] |ENERGY: The attitude was "wait-and-see" in crude oil futures yesterday in trading on the New York Mercantile Exchange.
[21203038] |Prices for the U.S. benchmark West Texas Intermediate crude remained locked in a fairly narrow range before ending the session four cents lower at $19.72 a barrel for December delivery.
[21203039] |Several analysts and brokers said the petroleum market was ready to rally after two days of price declines from profit-taking.
[21203040] |But an early 80-point drop in the Dow Jones Industrial Average stopped the crude rally cold.
[21203041] |The industrial average recovered to close only 3.69 points lower, but petroleum futures never shook off the chill.
[21203042] |Most market participants said they were looking to this week's inventory statistics from the American Petroleum Institute to give the market some direction.
[21203043] |The report isn't generally available until late on Tuesdays.

[21203044] |PRECIOUS METALS: Futures prices inched upward in mostly lackluster trading.
[21203045] |December gold was up $3.20 an ounce at $373.40; December silver gained 5.7 cents to $5.1950 an ounce.
[21203046] |January platinum rose $2.30 an ounce to $488.60.
[21203047] |Mr. Kaiser said there were no fundamental factors moving these markets.
[21203048] |He noted that two weeks ago there were rumors of Soviet sales of precious metals to finance grain purchases, but the sales don't seem to have materialized.
[21203049] |Ms. Raptopoulos thought yesterday's price action reflected weakness in the stock market and the dollar.
[21203050] |"Gold still acts as a haven when uncertainty prevails in the financial markets as it did" yesterday, she said.
[21203051] |Mr. Kaiser noted that gold was more than 71 times the price of silver at the close yesterday, which is historically high.
[21203052] |"The high ratio reflects the fact that silver is still regarded as about a half-industrial metal and its price lagging relative to gold says that traders are expecting a weakening economy," he said.

[21203053] |GRAINS AND SOYBEANS: Prices closed lower after trading in relatively narrow ranges because of strong selling in the cash market and continued favorable harvest weather.
[21203054] |The sale to the Chinese government of 330,000 metric tons of wheat under the government's export enhancement program was announced after the close of trading Monday, but the sale was expected and failed to buoy prices yesterday, said Dale Gustafson, a futures analyst with Drexel Burnham Lambert Inc. in Chicago.
[21203055] |As for other export customers, the Soviet Union isn't expected to be back buying U.S. corn in significant amounts until early next year, he said.
[21203056] |A number of commercial grain users buttressed that opinion yesterday by buying certain corn options for delivery in March, indicating to analysts that the commercial companies would use the options to hedge against expected corn sales in next year's first quarter.

[21203057] |COCOA: Futures at first continued the rally begun on Monday, but then faltered and closed lower.
[21203058] |The December contract opened just under Monday's close, triggered some previously placed buy orders just above $1,030 a metric ton, pushing the price to $1,040, and then encountered heavy selling by traders who buy and sell for their own accounts and by commercial interests.
[21203059] |The contract settled at $1,014 a ton, off $13.
[21203060] |Robert Hafer, senior commodities analyst at Kaiser Financial Group, said Monday's rally continued yesterday for only about 20 minutes after the opening.
[21203061] |He said even though there was arbitrage buying in New York because of the weak dollar, cocoa fell to relentless pressure from bearish traders.
[21203062] |But he noted that speculators apparently don't believe there is much more of a decline in store for cocoa.
[21203063] |The December contract reached its life-of-contract low of $975 a ton on Oct. 11; its lifetime high was $1,735, set in 1988, and its recent high was $1,368, set in early August.
[21203064] |The last time cocoa traded at prices as low as currently was in 1974.
[21203065] |But while further modest declines might be ahead, Mr. Hafer said it would be difficult to get through resistance levels just above yesterday's high.

[21204001] |Citizens First Bancorp. Inc. said it agreed to buy Lakeland First Financial Group Inc., a Succasunna, N.J., bank holding company, for about $50.6 million in cash and stock.

[21204002] |Citizens First, which controls Citizens First National Bank and is based in Glen Rock, N.J., will pay a maximum of 40% in cash for the parent of Lakeland Savings Bank and the remainder in convertible preferred stock, with a liquidation value of $18 a share.
[21204003] |Lakeland holders will have the option to request either stock or cash.

[21204004] |The convertible preferred will pay dividends at 7.875% and be convertible into shares of Citizens First at a rate equal to 20% above the average closing price of the stock during a 20-day period prior to the transaction's completion.
[21204005] |The deal requires regulatory and shareholder approval.

[21205001] |Color Systems Technology Inc., Los Angeles, said its major creditor, General Electric Pension Trust, agreed to convert $11.8 million of debt owed into 25% of Color System's fully diluted common stock.

[21205002] |The agreement also calls for General Electric Pension, a unit of General Electric Co., to receive as much as 10% of Color Systems' fully diluted common stock, depending on the proceeds from the sale of the AEI Film Library and its receivables.
[21205003] |General Electric Pension took control of the 85-title library last month after Color Systems defaulted on the loan.

[21205004] |The agreement depends on Color Systems' ability to win similar concessions from other creditors.
[21205005] |Buddy Young, president, said the company expects to conclude negotiations with other creditors within 60 days.

[21205006] |Color Systems, which converts black-and-white film to color videotape, posted a loss of $7.1 million, or $1.32 a share, on revenue of $10.6 million for the fiscal year ended June 30.
[21205007] |Its stock fell 12.5 cents, to $2.125, in American Stock Exchange composite trading yesterday.

[21206001] |Next to Kohlberg Kravis Roberts's megabillion RJR Nabisco deal, SCI Television is small fry.

[21206002] |But the troubles of SCI TV are a classic tale of the leveraged buy-out excesses of the 1980s, especially the asset-stripping game.

[21206003] |SCI TV, which expects to release a plan to restructure $1.3 billion of debt in the next day or so, isn't just another LBO that went bad after piling on debt -- though it did do that.
[21206004] |The cable and TV station company was an LBO of an LBO, a set of assets that were leveraged twice, enabling the blue-chip buy-out king Henry Kravis in 1987 to take more than $1 billion of cash out of the com- pany.

[21206005] |SCI TV's buy-out was an ace in the hole for Mr. Kravis and for investors in KKR partnerships.
[21206006] |But it has left holders of SCI TV's junk bonds holding the bag, including some heavyweights that KKR might need to finance future deals, such as Kemper Financial Services, First Executive, Columbia Savings & Loan and Prudential Insurance Co. of America.

[21206007] |Some junk-holders are said to be considering legal action against KKR or moves to force SCI TV into bankruptcy court.
[21206008] |And KKR's majority partner in SCI TV's buy-out, Nashville, Tenn., entrepreneur George Gillett, also is said to be very unhappy.

[21206009] |SCI TV's six stations once were part of Storer Communications.
[21206010] |KKR loaded up the cable and television company with debt in an 1985 buy-out, then later sold Storer's cable operations at a fat profit.

[21206011] |In 1987, KKR for the second time piled debt onto Storer's TV stations, selling them for $1.3 billion to a new entity that was 45%-owned by KKR and 55%-owned by Gillett Corp., which now operates the SCI TV stations.
[21206012] |In this second LBO, KKR with one hand took more than $1 billion of cash out of the TV company's assets and moved it into the Storer cable operations, making them more valuable in a 1988 sale.
[21206013] |(Storer also took $125 million of junior SCI TV bonds as partial payment for the TV assets.)

[21206014] |With the other hand, KKR put back into SCI TV less than 10% of the cash it had taken out, buying SCI TV common and preferred shares.

[21206015] |So, while KKR today has an estimated $250 million sunk in now-shaky SCI TV, including equity and debt, the LBO firm still is $1 billion ahead on the SCI TV buy-out after taking cash up front.
[21206016] |On Storer as a whole, KKR racked up compound annual returns of 60% in the three years it owned Storer.

[21206017] |Meanwhile, Mr. Gillett risks losing his entire equity investment of about $100 million in SCI TV if the company can't be restructured.
[21206018] |Overall, Mr. Gillett's holding company, Gillett Holdings, is heavily indebted and, except for its Vail Mountain resorts, isn't doing very well.

[21206019] |With the TV business falling on hard times in recent years, analysts say that if SCI TV had to be liquidated today, it might fetch 30% less than in the 1987 buy-out, wiping out most of the company's junk-holders and its stockholders.
[21206020] |Meanwhile, SCI TV can barely pay its cash interest bill, and to stay out of bankruptcy court it must soon reschedule a lot of bank loans and junk bonds that have fallen due.

[21206021] |SCI TV's grace period for paying its bills is due to expire Nov. 16.
[21206022] |It now is quietly circulating among creditors a preliminary plan to restructure debt.
[21206023] |Negotiations "have started con- structively, but that's not to say we like this particular offer," says Wilbur Ross of Rothschild Inc., adviser to SCI TV junk-holders.

[21206024] |No major player in the SCI TV deal will talk publicly.
[21206025] |But it's understood that Mr. Kravis is disappointed that Mr. Gillett didn't manage to boost SCI TV's operating profit after the buy-out.
[21206026] |Mr. Kravis apparently thinks SCI TV can survive if lenders extend its debt payments until TV stations rise in value again, allowing SCI TV to sell assets to pay debt.
[21206027] |Mr. Gillett is said to be proud of his operating record; he has lifted some stations' ratings and turned around a Detroit station.

[21206028] |As for junk-holders, they're discovering it can be a mistake to take the other side of a trade by KKR.
[21206029] |The bonds of SCI TV now are being quoted at prices ranging from only five cents to about 60 cents on the dollar, according to R.D. Smith & Co. in New York, which trades distressed securities.

[21206030] |People who have seen SCI TV's restructuring plan say it offers concessions by KKR and Gillett Corp.
[21206031] |They would both give part of their combined $50 million in common equity in SCI TV to holders of SCI TV's $488 million of junk bonds, as a carrot to persuade them to accept new bonds that might reduce the value of their claims on the company.

[21206032] |But some militant SCI TV junk-holders say that's not enough.
[21206033] |They contend that SCI TV's equity now is worthless.
[21206034] |They add that it isn't costing KKR anything to give up equity because of its big up-front cash profit on the buy-out, which they think contributed to SCI TV's current problems.
[21206035] |Kemper, the biggest holder of senior SCI TV bonds, has refused to join the bond-holders committee and is said to be reviewing its legal options.

[21206036] |To protect their claims, some junk-holders want KKR and perhaps Mr. Gillett to invest new money in SCI TV, perhaps $50 million or more.
[21206037] |One investment banker who isn't involved in the deal says SCI TV needs at least $50 million of new equity to survive.

[21206038] |Junk-holders say they have a stick to beat KKR with: "The threat of bankruptcy is a legitimate tool" to extract money from KKR, says one big SCI TV holder.
[21206039] |This could be the first major bankruptcy-law proceeding for KKR, he adds.
[21206040] |A big bankruptcy-court case might tarnish KKR's name, and provide new fuel for critics of LBOs in Washington and elsewhere.
[21206041] |But others say junk-holders have nothing to gain by putting SCI TV into bankruptcy-law proceedings.

[21206042] |While KKR doesn't control SCI TVwhich is unusual for a KKR investment -- it clearly has much deeper pockets than Mr. Gillett.
[21206043] |Bankruptcy specialists say Mr. Kravis set a precedent for putting new money in sour LBOs recently when KKR restructured foundering Seaman Furniture, doubling KKR's equity stake.

[21206044] |But with Seaman, KKR was only trying to salvage its original investment, says bankruptcy investor James Rubin of Sass Lamle Rubin in New York.
[21206045] |By contrast, KKR probably has already made all the money it can on SCI TV.
[21206046] |And people who know Mr. Kravis say he isn't in a hurry to pour more money into SCI TV.

[21207001] |Rubbermaid Inc., reflecting strong earnings growth, boosted its quarterly dividend 18%, to 13 cents a share from 11 cents.

[21207002] |The maker of household products said the new dividend is payable Dec. 1 to shares of record Nov. 10.

[21207003] |Separately, the company's board adopted a proposal to amend its 1986 shareholder rights plan, further insulating the company from takeover.

[21207004] |Rubbermaid officials said they aren't aware of any effort to take over the company, but believed the shareholder plan needed to be strengthened.
[21207005] |"The board has stated repeatedly that Rubbermaid should be independent," said Walter W. Williams, Rubbermaid president.

[21207006] |Some changes to the plan were minor adjustments, but the most significant was an amendment that provides that if any investor holds 25% or more of Rubbermaid's voting securities, each right held by others would entitle the holder to buy Rubbermaid shares with a market value of twice the right's exercise price.

[21207007] |Mr. Williams said the exercise price is $125, meaning holders would have the right to buy $250 of Rubbermaid stock for half price, diluting the investor's 25% stake.

[21207008] |For the third quarter, Rubbermaid earned $32.6 million, or 44 cents a share, up 16% from $28.1 million, or 38 cents a share, a year earlier.
[21207009] |Sales rose 9.7% to $351.5 million from $320.4 million.

[21207010] |Rubbermaid shares closed yesterday at $33.875, off 12.5 cents, in New York Stock Exchange composite trading.

[21208001] |The stock market went on a dizzying ride as UAL, parent of United Airlines, once again led shares into a breathtaking decline and then an afternoon comeback.

[21208002] |At the end of it all, the Dow Jones Industrial Average closed down 3.69 to 2659.22.
[21208003] |At one point yesterday morning, the Dow was down 80.53 points.
[21208004] |New York Stock Exchange volume was 237,960,000 shares.
[21208005] |Declining issues swamped advancers, 1,222 to 382.

[21208006] |Yesterday's sell-off and rebound was a powerful reminder that 11 days after the 190-point plunge on Friday the 13th, the stock market still has a bad case of nerves.
[21208007] |Takeover stock speculation and futures-related program trading drove the industrial average through wide ranges.
[21208008] |And there is more volatility to come.

[21208009] |"October 13th left us with a cut and exposed nerve," said Jack Solomon, technical analyst for Bear Stearns.
[21208010] |"People are fearful and sensitive.
[21208011] |Everybody's finger is one inch closer to the button.
[21208012] |I have never had as many calls as I had this morning.
[21208013] |Volatility is here to stay."

[21208014] |The Dow Jones Industrial Average plunged about 80 points in slightly more than one hour after the opening bell.

[21208015] |For many, it began to look like a replay of Oct. 13.
[21208016] |As stocks and stock-index futures fell, a trading limit was hit in the S&P 500 stock futures pit.
[21208017] |Under a post-1987 crash reform, the Chicago Mercantile Exchange wouldn't permit the December S&P futures to fall further than 12 points for a half hour.
[21208018] |That caused a brief period of panic selling of stocks on the Big Board.
[21208019] |But at a critical moment, stock-index arbitrage traders showed their power and control.
[21208020] |They scooped up hundreds of S&P futures when the market needed it most.

[21208021] |At about 10:40 a.m. EDT, several big buy orders hit the S&P pit simultaneously, lifting the futures up out of the trading limit and eventually into ranges that caused computer-driven program buying of stocks.

[21208022] |"It is very clear that those buy orders came from people who wanted their franchise protected," said one Chicago-based futures trader.
[21208023] |"These guys wanted to do something to show how powerful they are."

[21208024] |Traders said Goldman Sachs, Shearson Lehman Hutton and Salomon Brothers were the main force behind the futures buying at the pivotal moment.
[21208025] |Shearson Lehman Hutton declined to comment.
[21208026] |Officials at Goldman Sachs and Salomon Brothers were unavailable for comment.

[21208027] |As in the Oct. 13 massacre, yesterday morning's drop was triggered by bad news for speculators in UAL.
[21208028] |A UAL statement after the market closed Monday indicated that the airline's board wanted to keep the company independent, effectively crushing hopes of an immediate buy-out.
[21208029] |Five minutes before the Big Board opened, a preliminary price was flashed for UAL -- somewhere between 135 and 155, a loss of as much as $43 a share from Monday's close.

[21208030] |UAL finally opened for trading at 10:08 a.m. at 150, down $28.
[21208031] |Floor traders said there was a huge crowd around the Big Board specialist's post where UAL trades.
[21208032] |"There was a seething mass of people," said one floor trader.
[21208033] |"Then there was a big liquidation of stock" across the board, he added.

[21208034] |Takeover speculators -- who have already taken a record loss estimated at more than $700 million on UAL -- started selling other stocks as well as S&P futures in an attempt to hedge against a further UAL blood bath.
[21208035] |Shortly after the UAL opening, program traders started selling stocks in the Major Market Index and S&P 500 index.
[21208036] |The 20-stock MMI mimics the Dow Jones Industrial Average.

[21208037] |By 10:30 a.m. the Dow was down 62.70.
[21208038] |All 20-stocks in the MMI except Exxon, General Motors and Sears were down $1 to $2.

[21208039] |At 10:33, when the S&P 500 December futures contract crunched to a 12-point loss under the force of sell programs, S&P futures trading was halted and program trades on the Big Board were routed into a special computer that scans for order imbalances.
[21208040] |Under the rules adopted by the Chicago Mercantile Exchange, the futures contract cannot drop below the limit, but buyers can purchase futures.
[21208041] |At this point, the Dow industrials were down 75.41 points and falling.

[21208042] |The trading halt in the S&P 500 futures exacerbated selling and confusion, many traders maintain.
[21208043] |But as the fright began to spread through the S&P pit, the big brokerage firms came in and bought futures aggressively.

[21208044] |"It was whooosh!" said one futures trader.
[21208045] |In five minutes, the Dow industrials climbed almost 30 points.
[21208046] |The big futures buying triggered stock-index buy programs that eventually trimmed the Dow's loss to 31 points by 11 a.m.

[21208047] |Traders said the futures buying was finely calculated by program traders.
[21208048] |These firms sold stock into the big morning decline, but seeing the velocity of the market's drop, held back on their offsetting purchases of futures until the S&P futures hit the trading limit.
[21208049] |Then they completed the other side of the trade by buying futures, which abruptly halted the stock market's decline as traders began to buy stocks.

[21208050] |From then on, the Dow industrials held at a loss of 40 to 50 points.
[21208051] |Then, in late-afternoon trading, hundred-thousand-share buy orders for UAL hit the market, including a 200,000-share order through Bear Stearns that seemed to spark UAL's late price surge.
[21208052] |Almost simultaneously, PaineWebber began a very visible buy program for dozens of stocks.
[21208053] |The combined buying rallied the Dow into a small gain, before closing at a slight loss.

[21208054] |Some institutional traders loved the wild ride.
[21208055] |"This is fun," asserted Susan Del Signore, head equity trader at Travelers Investment Management Co.
[21208056] |She said she used the market's wild swings to buy shares cheaply on the sell-off.
[21208057] |On the comeback, Ms. Del Signore unloaded shares she has been aiming to get rid of.

[21208058] |But traders who risk money handling big blocks of stock were shaken.
[21208059] |"This market is eating away my youth," said Chung Lew, head equity trader at Kleinwort Benson North America Inc.
[21208060] |"Credibility sounds intangible.
[21208061] |But I think we are losing credibility because when the market does this, it doesn't present itself as a rational investment.
[21208062] |But if you overlook all this, it is a beautiful market for investment still."

[21208063] |Traders attributed rallies in a number of stocks to a Japanese buy program that PaineWebber carried out as part of a shift in portfolio strategy, according to Dow Jones Professional Investor Report.

[21208064] |Dow Jones climbed 5 3/4 to 41 on very heavy volume of 786,100 shares.
[21208065] |Analysts said a big Japanese buy order was behind the rise.
[21208066] |A Dow Jones spokesman said there were no corporate developments that would account for the activity.
[21208067] |Other issues said to be included in the buy program were Procter & Gamble, which rose 2 7/8 to 133 1/2; Atlantic Richfield, which gained 2 to 103 3/4, and Rockwell International, which jumped 2 3/4 to 27 1/8.
[21208068] |PaineWebber declined to comment.

[21208069] |UAL finished at 170, off 8 3/8.
[21208070] |Other airline stocks fell in response to the UAL board's decision to remain independent for now, including USAir Group, which separately reported a third-quarter loss of $1.86 a share compared with a year-ago profit.
[21208071] |USAir fell 2 1/2 to 40.

[21208072] |AMR, the parent of American Airlines, fell 1 3/4 to 68 7/8 on 2.3 million shares; Delta Air Lines lost 1 1/2 to 66, Southwest Airlines slid 3/4 to 24 1/4 and Midway Airlines dropped 1/4 to 14 7/8.
[21208073] |Texas Air, which owns Continental and Eastern airlines, lost 3/8 to 13 1/8 on the American Stock Exchange.

[21208074] |Metals stocks also were especially weak, as concerns about the earnings outlook for cyclical companies weighed on the group.
[21208075] |Aluminum Co. of America dropped 1 1/2 to 70 1/4, Phelps Dodge fell 4 to 59 7/8, Asarco lost 1 3/8 to 31 3/4, Reynolds Metals slid 1 3/8 to 50 3/8, Amax dropped 1 1/8 to 21 5/8 and Cyprus Minerals skidded 2 to 26 3/4.
[21208076] |Alcan Aluminium was an exception, as it gained 1 3/8 to 23 on two million shares.

[21208077] |Goodyear Tire & Rubber tumbled 2 7/8 to 43 7/8.
[21208078] |Its third-quarter earnings were higher than a year ago, but fell short of expectations.
[21208079] |Other stocks in the Dow industrials that failed to benefit from the market's rebound included United Technologies, which dropped 1 to 53 5/8, and Bethle hem Steel, which fell 1 to 16 7/8.

[21208080] |BankAmerica dropped 1 1/4 to 29 1/2 on 2.3 million shares amid rumors that the earthquake last week in the San Francisco area had caused structural damage to its headquarters building.
[21208081] |The company denied the rumors and noted that it doesn't own the building.

[21208082] |Stocks of California-based thrifts also were hard hit.
[21208083] |Great Western Financial lost 1 1/8 to 20 1/2 on 1.6 million shares, Golden West Financial dropped 1 1/4 to 28 1/2 and H.F. Ahmanson dipped 5/8 to 21 1/4.
[21208084] |HomeFed plunged 3 5/8 to 38 1/2; its third-quarter earnings were down from a year ago.

[21208085] |Golden Valley Microwave Foods skidded 3 5/8 to 31 3/4 after warning that its fourth-quarter results could be hurt by "some fairly large international marketing expenses."

[21208086] |Dividend-related trading swelled volume in two issues: Security Pacific, which fell 7/8 to 44 1/2 and led the Big Board's most actives list on composite volume of 14.8 million shares, and Nipsco Industries, which lost 3/8 to 17 3/8 on 4.4 million shares.
[21208087] |Both stocks have dividend yields of about 5% and will go ex-dividend Wednesday.

[21208088] |Kellogg surged 4 1/4 to 75.
[21208089] |Donaldson, Lufkin & Jenrette placed the stock on its list of recommended issues.
[21208090] |The company noted that its third-quarter results should be released later this week or early next week.

[21208091] |Vista Chemical rose 1 3/8 to 38 5/8 after Bear Stearns added the stock to the firm's buy list, citing recent price weakness.

[21208092] |Georgia Gulf, another producer of commodity chemicals, advanced 2 to 49 1/2; Dallas investor Harold Simmons, who holds about 10% of its shares, said he hasn't raised his stake.

[21208093] |Norfolk Southern went up 1 1/8 to 37 7/8.
[21208094] |The company's board approved the repurchase of up to 45 million common shares, or about 26% of its shares outstanding, through the end of 1992.

[21208095] |Airborne Freight climbed 1 1/8 to 38 1/2.
[21208096] |Its third-quarter earnings more than doubled from a year earlier and exceeded analysts' expectations.

[21208097] |John Harland, which will replace American Medical International on the S&P 500 following Wednesday's close, gained 5/8 to 24 1/8.

[21208098] |The Amex Market Value Index fell 3.10 to 376.36.
[21208099] |Volume totaled 14,560,000 shares.

[21209001] |GANNETT Co. raised its quarterly dividend 11% to 30 cents a share from 27 cents, payable Jan. 2, 1990, to shares of record Dec. 8, 1989.
[21209002] |The action increases the annual dividend to $1.20 a share from $1.08.
[21209003] |This is the 22nd year in which the Washington media company has increased dividends.
[21209004] |Gannett's third-quarter earnings rose 11% to 52 cents a share from 47 cents in the year-ago period.
[21209005] |Sales rose 2.9% to $827.9 million from $804.3 million.
[21209006] |Gannett has 161 million shares outstanding.

[21210001] |Fireman's Fund Corp. said third-quarter net income plunged 85% to $7.2 million from last year's $49.1 million, or 99 cents a share, because of ravages of Hurricane Hugo and increased reserves for legal expenses.

[21210002] |Payout of preferred dividends resulted in a net loss of five cents a share in the most recent quarter.
[21210003] |Revenue edged up 3.4% to $904 million from $874 million in last year's third quarter.

[21210004] |In New York Stock Exchange composite trading, Fireman's closed at $35.50 a share, down 50 cents.

[21210005] |Impact of the Oct. 17 San Francisco earthquake, which will be recorded in the fourth quarter, isn't expected to exceed $50 million after taxes, the company added.

[21210006] |For the nine months, the insurance company said net fell 46% to $88.8 million, or $1.54 a share, from $164 million, or $3.16 a share, the previous year.
[21210007] |Revenue slid 7% to $2.6 billion from $2.8 billion a year earlier.

[21210008] |Fireman's Fund property-liability subsidiaries reported a 120.7% combined underwriting ratio for the nine months, up from 108.4% for the year-ago period.

[21210009] |Hurricane Hugo accounted for about $36 million in pretax third-quarter losses, net of reinsurance recoveries.

[21210010] |The company said there was an additional increase in loss and loss-expense reserves of $71 million reflecting "higher than expected" development in claims legal expenses from to prior periods.

[21210011] |For the third quarter, net premiums were $742 million, up 9.6% from $677 million in last year's quarter, because of the expiration of the National Indemnity quota share reinsurance agreement.

[21210012] |Net premiums written through Sept. 30 fell 5% to $2.1 billion from $2.2 billion a year ago, because of the writing of fewer policies at flat prices, the company said.

[21210013] |Third-quarter and nine-month results don't include any provision for premium returns that could be ordered by the California Department of Insurance under Proposition 103.
[21210014] |Fireman's Fund said it has applied for an exemption from these rate rollbacks, and plans to defend its filing in hearings before the department.

[21211001] |CONTROL DATA Corp. said it is offering to purchase the $154.2 million amount of its 12 3/4% senior notes due June 15, 1991, at par, plus accrued interest to the Dec. 8 purchase date.
[21211002] |The Minneapolis computer systems and services concern said the offer is required under the senior note indenture as a result of Control Data's recent sale of its disk drive subsidiary, Imprimis, to Seagate Technology Inc.

[21212001] |Child's Game

[21212002] |There was very slow play on the market today, They were selling and buying by halves; Instead of trading like Bears and Bulls, They behaved like cubs and calves.

[21212003] |-- George O. Ludcke.

[21212004] |Politrick

[21212005] |I've learned one thing from candidates, A technique so deftly done: If a question can't be answered, Strongly answer an unasked one!

[21212006] |-- Mimi Kay.

[21212007] |Foresight

[21212008] |We need to get a space platform set up soon -- just in case we want to step out for a breath of fresh air.

[21212009] |-- Ivern Ball.

[21213001] |After being whipsawed by a volatile stock market, Treasury bonds closed higher.
[21213002] |But junk bonds took more hits.

[21213003] |Early in the day, bond dealers said trading volume was heavy as large institutional investors scrambled to buy long-term Treasury bonds on speculation that the stock market's volatility would lead to a "flight-to-quality" rally.
[21213004] |That happens when nervous stock investors dump equities and buy Treasurys, which are higher in quality and thus considered safe.

[21213005] |"Some retail accounts, such as commercial banks and pension funds, wanted to get on the bandwagon before it was too late," said Sung Won Sohn, chief economist at Norwest Corp., Minneapolis.

[21213006] |At one point, the Dow Jones Industrial average fell about 80 points on news that UAL Corp. decided to remain independent.
[21213007] |In response, Treasury prices soared 1 1/8 points, or about $11.25 for each $1,000 face amount.
[21213008] |But the gains in Treasury bonds were pared as stocks staged a partial recovery.
[21213009] |The industrial average ended at 2659.22, down 3.69 points.

[21213010] |Economists said the bond market's strength also is a sign that investors expect the Federal Reserve to cut interest rates amid growing evidence that the economy is slowing.
[21213011] |While they don't expect the Fed to move right away, they say the case for lower rates is building.
[21213012] |Yesterday, for example, the Commerce Department reported that new orders for durable goods fell 0.1%, while the nation's auto makers reported lackluster mid-October sales.

[21213013] |The Treasury's 30-year bond ended over 1/4 point higher.
[21213014] |Municipal, mortgage-backed and investment-grade corporate bonds rose 1/8 to 1/2 point.

[21213015] |But high-yield, high-risk bonds fell 1/4 to 1/2 point with the stock market early in the session and never recovered.
[21213016] |According to a trader at Drexel Burnham Lambert Inc., the hardest hit junk bonds were those issued by RJR Holdings Capital Corp., which are the easiest to sell.
[21213017] |RJR's 14.70% bonds due 2007 fell 2 1/2 points.

[21213018] |Trading activity in the junk market was extremely light as dealers couldn't find enough buyers to match sellers.
[21213019] |"While the stock market was falling, most {junk bond holders} were just watching it not knowing what to do," said Paul Suckow, director of fixed-income securities at Oppenheimer Management Corp.
[21213020] |"It was like driving down the highway watching a wreck.
[21213021] |Everybody was rubber-necking."

[21213022] |Adding to the junk market's jitters were reports that Donaldson, Lufkin & Jenrette Securities Corp. is having trouble structuring a $1.6 billion offering for TW Food Services Inc. and will postpone or even cancel the issue.
[21213023] |TW is the largest franchisee of Hardee's, a fast-food restaurant, and operates several other food chains.
[21213024] |Donaldson Lufkin wouldn't comment.

[21213025] |Credit analysts said investors are nervous about the issue because they say the company's ability to meet debt payments is dependent on too many variables, including the sale of assets and the need to mortgage property to retire some existing debt.
[21213026] |Also, the TW offering includes interest-deferred and pay-in-kind securities, which are currently unpopular.

[21213027] |Meanwhile, investors turned a cold shoulder to the Treasury's sale of $10 billion of new two-year notes yesterday.

[21213028] |"It's not too surprising that the auction was sloppy, given the volatility in the bond market because of stocks," said Robert T. McGee, a senior vice president at Tokai Bank Ltd.
[21213029] |"People are looking past supply to lower interest rates, but they're also worried about being whipsawed by the volatility in the stock market."

[21213030] |The new two-year notes were priced with an average yield of 7.74%.
[21213031] |That was higher than the 7.71% to 7.73% average yield that traders had expected.
[21213032] |In when-issued trading, the notes were quoted at a price to yield 7.78%.

[21213033] |Sluggish demand was also evidenced by the weak 2.41-to-1 bid-to-cover ratio, which was lower than the average 2.79-to-1 ratio at the last 12 similar auctions.
[21213034] |The ratio, which reflects the number of bids the Treasury receives for each bid accepted, is used to gauge investor demand.

[21213035] |Dealers said players shied away from the note sale because they were concerned that prices at the time of the auction might erode if the stock market staged a recovery, which, in fact, did happen.

[21213036] |Individual and Japanese participation in the auction was disappointing, according to dealers.

[21213037] |"Interest by Japanese investors was limited," said Michael Moran, chief economist at Daiwa Securities America Inc.
[21213038] |"They are typically not active in two-year note auctions, but today's participation could be viewed as lighter-than-normal."

[21213039] |However, Mr. Moran added that the Japanese generally have a positive view of the U.S. bond market because of expectations that the dollar will remain strong and interest rates will decline.
[21213040] |He said, "Possibly, they're waiting to buy at the (quarterly) refunding" of government debt to be held next month by the Treasury.

[21213041] |A trader at a Japanese firm estimated that the Japanese purchased no more than 10% of the two-year notes.

[21213042] |Treasury, Agency Securities

[21213043] |Today investors will focus on the long-awaited auction of $4.5 billion of 30-year bonds by Resolution Funding Corp.

[21213044] |The initial bond offering by the new government agency, which was created to help rescue the nation's troubled thrifts, isn't expected to see robust demand.

[21213045] |A small yield premium over comparable Treasurys and a lack of liquidity is hampering dealers' efforts to drum up interest in the so-called bailout bonds.
[21213046] |In when-issued trading, the Refcorp bonds were quoted at a price to yield 8.17%.

[21213047] |Yesterday, the benchmark 30-year bond was quoted late at 102 18/32 to yield 7.89%, compared with 102 9/32 to yield 7.93% on Monday.
[21213048] |The latest 10-year Treasury was quoted at 100 22/32 to yield 7.88%, compared with 100 17/32 to yield 7.9%.

[21213049] |Short-term rates were unchanged to slightly lower.
[21213050] |The discount rate on three-month Treasury bills was quoted at 7.52% for a bond-equivalent yield of 7.75%, while the rate on six-month Treasury bills was quoted at 7.47% for a yield of 7.85%.

[21213051] |Rates are determined by the difference between the purchase price and face value.
[21213052] |Thus, higher bidding narrows the investor's return while lower bidding widens it.

[21213053] |Corporate Issues

[21213054] |Several blue-chip companies tapped the new-issue market yesterday to take advantage of falling interest rates.

[21213055] |Three of the largest offerings, by Exxon Capital Corp., Xerox Corp. and Citicorp, were underwritten by groups led by Salomon Brothers Inc.
[21213056] |Exxon Capital, long-rumored to be a potential debt issuer, offered $200 million of 10-year notes priced to yield 8.31%.
[21213057] |Citicorp issued $200 million of seven-year notes priced to yield 8.82%, and Xerox priced $150 million of six-year notes to yield 8.85%.

[21213058] |Meanwhile, International Business Machines Corp. paved the way for a visit to the credit markets by filing a shelf registration with the Securities and Exchange Commission for $800 million in new debt.
[21213059] |This is in addition to IBM's existing shelf registration under which $200 million in debt securities are available for issuance.

[21213060] |In secondary trading, investment-grade corporate bonds ended 1/8 to 1/4 higher.

[21213061] |Municipals

[21213062] |Actively traded municipal bonds ended 1/4 to 1/2 point higher in brisk trading, despite a flood of new supply.

[21213063] |New Jersey Turnpike Authority's 7.20% issue of 2018 finished 1/4 point stronger at 98 1/2 bid, to yield 7.32%.

[21213064] |Traders said municipals were underpinned by influences including the climb in Treasury issue prices.
[21213065] |Also, municipal bonds lured buying because the stock market remains wobbly, traders contended.
[21213066] |Mainly, though, it was a favorable outlook for yesterday's new supply that propped up municipals, some traders said.

[21213067] |Among the new issues was Massachusetts's $230 million of general obligation bonds.
[21213068] |The bonds were won by a Goldman, Sachs & Co. group with a true interest cost of 7.17%.
[21213069] |They were priced to yield from 6.00% in 1990 to 7.20% in 2009.

[21213070] |The Massachusetts deal had an unsold balance of $84.3 million in late trading, the underwriter said.

[21213071] |Mortgage-, Asset-Backed Securities

[21213072] |Mortgage securities gained 3/32 to 9/32 point after a hectic session, with Government National Mortgage Association 8% securities as the standout issue.

[21213073] |The Ginnie Mae issue rose amid talk of large purchases of the securities by institutional investors.

[21213074] |The derivative markets remained active as one new issue was priced and talk circulated about more offerings in the next day or two.
[21213075] |The Federal Home Loan Mortgage Corp. issued a $500 million real estate mortgage investment conduit backed by its 8 1/2% securities.

[21213076] |In the asset-backed market, a big offering of Ford Motor Credit Corp. auto-loan securities was increased in size after strong institutional demand.
[21213077] |The deal by the Ford Motor Co. unit, priced Monday, was increased to $3.05 billion from $2.58 billion.

[21213078] |Among major pass-through issues, Ginnie Mae 9% securities for November delivery ended at 98 15/32, up 5/32, after touching an early high of 98 27/32; 8% securities were at 94 5/32, up 9/32; 9 1/2% securities at 100 15/32, up 4/32; and 10% securities at 102 11/32, up 3/32.
[21213079] |Freddie Mac 9% securities were at 97 21/32, up 5/32.

[21213080] |The Ginnie Mae 9% issue was yielding 9.34% to a 12-year average life assumption, as the spread above the Treasury 10-year note held at 1.46 percentage points.

[21213081] |Foreign Bonds

[21213082] |The Eurodollar bond market sprang to life late in the European trading session after the Dow Jones Industrial Average tumbled.

[21213083] |Eurodollar bonds are often issued by foreign corporations, but interest and principal are paid in dollars.
[21213084] |The bonds ended about 1/2 point higher yesterday.

[21213085] |Prices of European government bonds also rose as U.S. stocks declined.

[21213086] |West Germany's 7% issue due October 1999 rose 0.13 point to 99.93 to yield 7.01%, while the 6 3/4% issue due July 1994 rose 0.05 to 97.70 to yield 7.33%.

[21213087] |Britain's 11 3/4% Treasury bond due 2003/2007 rose 17/32 to 112 6/32 to yield 10.05%, while the 12% notes due 1995 rose 11/32 to 104 2/32 to yield 10.93%.

[21213088] |In Japan, government bond prices fell.
[21213089] |The No. 111 4.6% bond due 1998 ended on brokers' screens at 95.22, down 0.17 point, to yield 5.41%.

[21214001] |BSB BANCORP Inc., Binghamton, N.Y., said it increased its regular quarterly dividend 50%, to 15 cents a share from 10 cents.
[21214002] |It is payable Dec. 10 to stock of record Nov. 24.
[21214003] |The move was made because of the bank-holding company's increased profitability, officials said.
[21214004] |In the third quarter, BSB earned $2 million, up from $1.8 million a year earlier.
[21214005] |In national over-the-counter trading yesterday, BSB closed at $17.50, up 12.5 cents.
[21214006] |BSB has 3.1 million shares outstanding.

[21215001] |Staar Surgical Co.'s board said that it has removed Thomas R. Waggoner as president and chief executive officer and that John R. Wolf, formerly executive vice president, sales and marketing, has been named president and chief executive officer.

[21215002] |Mr. Waggoner has been involved in a dispute with the board since August, when he ousted all the directors.
[21215003] |Later they said they fired him, and two directors attempted to place the company under bankruptcy-law protection.
[21215004] |A federal judge turned down the Chapter 11 petition.

[21215005] |The company's latest announcement said Mr. Waggoner will remain a director of Staar, a maker of products for small-incision surgery.
[21215006] |Mr. Wolf and other members of the board declined to comment on the announcement.
[21215007] |Mr. Waggoner couldn't be reached.

[21215008] |The Staar board also said that John R. Ford resigned as a director, and that Mr. Wolf was named a member of the board.

[21216001] |EAST GERMANY'S KRENZ WARNED against further pro-democracy protests.

[21216002] |After the legislature confirmed him as the Communist Party leader, Krenz said demonstrations to demand democratic freedoms could cause a "worsening of the situation, or confrontation."
[21216003] |He also reaffirmed East Germany's allegiance to Communist orthodoxy.
[21216004] |But as many as 12,000 people marched in East Berlin after the speech to protest his election.
[21216005] |During the balloting, 26 members of the 500-seat Parliament voted against Krenz, a move considered unprecedented in the country's 40-year history.

[21216006] |Officials in East Berlin, responding to complaints from opposition groups, admitted police used excessive force in dispersing protesters this month.

[21216007] |The Iran-Contra judge agreed to allow Poindexter to subpoena the personal papers of ex-President Reagan, ruling that there was sufficient evidence that the data would be important to the defense.
[21216008] |But the judge denied a request by the former national security adviser, who faces five criminal charges, to seek documents from Bush.

[21216009] |San Francisco Bay area officials said nine people remain missing in the aftermath of last week's earthquake.
[21216010] |The death toll rose to 63.
[21216011] |The House, meanwhile, approved $2.85 billion to aid in the recovery from the temblor and from Hurricane Hugo as state legislators moved toward a temporary sales-tax increase.

[21216012] |U.S. officials expressed skepticism over an Israeli effort to show the PLO continues to practice terrorism.
[21216013] |Israel provided the State Department with a list of recent alleged terrorist incidents attributed to forces controlled by Arafat, but the U.S. said it wasn't satisfied that the incidents constituted terrorism.

[21216014] |TV evangelist Jim Bakker was sentenced to 45 years in prison and fined $500,000 for defrauding followers of his PTL ministry.
[21216015] |Bakker, who was immediately taken into custody, was convicted Oct. 5 by a federal court jury in Charlotte, N.C., of fraud and conspiracy for diverting more than $3.7 million of ministry funds for personal use.

[21216016] |Lawmakers in Moscow voted to deny the Communist Party its 100 guaranteed seats in the Soviet Congress, meaning Gorbachev and other aides might have to face voters.
[21216017] |In Warsaw, Shevardnadze held his first talks with the Solidarity-led government and vowed to maintain fuel supplies.
[21216018] |Poland's premier is to visit Moscow next month.

[21216019] |The Arab League pledged an accord for a complete Syrian troop pullout from Lebanon, where about 70,000 people marched to the headquarters of Christian leader Aoun to support his rejection of a peace plan approved Sunday by Lebanon's legislature.
[21216020] |The plan lacked a withdrawal timetable.

[21216021] |Pro-Iranian kidnappers renewed an offer to trade their captives in Lebanon for at least 15 Shiite Moslem comrades jailed in Kuwait.
[21216022] |The statement by Islamic Jihad, which holds at least two U.S. hostages, was accompanied by a photograph of Associated Press correspondent Terry Anderson, longest held of 18 Western hostages.

[21216023] |The Treasury Department said S&Ls reject blacks for mortgage loans twice as often as they reject whites.
[21216024] |The department's Office of Thrift Supervision said that doesn't necessarily mean thrifts are biased, but conceded that it doesn't have data about applicants to determine why blacks are rejected more often.

[21216025] |Emergency crews searched through the charred rubble of a Phillips Petroleum Co. plastics plant near Pasadena, Texas, where a series of explosions Monday killed at least two people and injured 124.
[21216026] |Company officials said 22 workers were missing and presumed dead.
[21216027] |Safety authorities didn't immediately know the cause of the blasts.

[21216028] |NATO defense ministers opened a two-day meeting in Portugal to assess the alliance's nuclear-weapons needs amid reduced East-West tensions.
[21216029] |The ministers ordered a study on the strategic role of nuclear arms in Western Europe once Soviet conventional weapons are reduced in the East bloc.

[21216030] |The Justice Department scrambled to play down the significance of revised guidelines concerning prosecutions under the federal racketeering law.
[21216031] |The guidelines, which discourage prosecutors from seeking court orders seizing the assets of certain racketeering defendants prior to trial, were first disclosed this week.

[21216032] |Died: S. Clark Beise, 91, ex-president and chief executive officer of Bank of America NT&SA, Saturday, in Hillsboro, Calif.

[21217001] |STOCK PRICES SWUNG wildly as the market reacted to an initial plunge by UAL shares, followed by a sharp rebound in the afternoon.
[21217002] |The Dow Jones industrials, down over 80 points in the morning, closed off 3.69, at 2659.22.
[21217003] |Bond prices surged in reaction to the sell-off in stocks, then eased slightly during the afternoon recovery.
[21217004] |The dollar finished lower.

[21217005] |UAL's stock regained most of an early loss amid speculation one or more investors may challenge the airline's decision to stay independent.
[21217006] |The stock closed down $8.375, at $170, after plunging $33, to $145.

[21217007] |Ford may seek all of Jaguar, setting the stage for a possible bidding war with GM.
[21217008] |Jaguar has been discussing an alliance with GM, but Ford's move may derail the talks.

[21217009] |Car and truck sales slid 20.5% in mid-October as U.S. manufacturers paid the price for heavy incentives earlier in the year.
[21217010] |General Motors continued to be hardest hit.

[21217011] |Durable goods orders slipped 0.1% in September, reflecting weakening auto demand after a spurt of orders for new 1990 models.
[21217012] |Excluding transportation items, orders rose 1.8%.

[21217013] |Norfolk Southern's board approved a buy-back of up to 45 million shares, valued at over $1.7 billion.
[21217014] |The repurchase, coupled with an earlier buyback, will reduce the firm's shares outstanding by over 26%.

[21217015] |PS New Hampshire received a sweetened $2.25 billion offer from Northeast Utilities, likely spurring a new round of bidding for the utility.

[21217016] |GE executives were accused by U.S. prosecutors of providing "misleading and false" data to the Pentagon in 1985 to cover up "longstanding fraudulent" billing practices.

[21217017] |Texaco said profit rose 11% in the quarter, partly due to a massive restructuring.
[21217018] |Sun posted a gain.
[21217019] |Mobil, Shell and Chevron had declines.

[21217020] |Mobil is preparing to slash its work force in the U.S., possibly as soon as next month, sources said.

[21217021] |Sears posted a 16% drop in third-quarter profit as U.S. retail operations recorded the first loss in over five years.
[21217022] |The results show Sears is struggling to attract shoppers.

[21217023] |Digital Equipment announced its first mainframe computers, targeting IBM's largest market and heating up the industry's biggest rivalry.

[21217024] |Cray Research expects supercomputer sales to be flat next year, the latest in a series of negative announcements by the company.

[21217025] |Short interest increased 6% in the Nasdaq over-the-counter market for the month ended Oct. 13.

[21217026] |Salomon posted an unexpectedly big gain in quarterly earnings, aided by its securities trading and investment banking activities.

[21217027] |Procter & Gamble's profit surged 38% in its latest fiscal quarter, aided by a gain from a legal settlement and continued growth overseas.

[21217028] |Goodyear's profit rose 11% in the quarter, buoyed by improved operating results in its tire business.

[21217029] |Markets --

[21217030] |Stocks: Volume 237,960,000 shares.
[21217031] |Dow Jones industrials 2659.22, off 3.69; transportation 1210.70, off 25.96; utilities 215.04, off 0.31.

[21217032] |Bonds: Shearson Lehman Hutton Treasury index 3425.22, up

[21217033] |Commodities: Dow Jones futures index 129.24, off 0.25; spot index 130.76, off 0.88.

[21217034] |Dollar: 141.45 yen, off 0.45; 1.8355 marks, off 0.0115.

[21218001] |Genetic Defect Spotted In 3-Day-Old Embryo

[21218002] |RESEARCHERS diagnosed a genetic defect in a three-day-old mouse embryo in an experiment directly applicable to humans.

[21218003] |Prenatal diagnosis of genetic defects as early as the sixth week of pregnancy is increasingly common today.
[21218004] |But the mouse experiment at a Medical Research Council laboratory in London shows genetic defects can be detected three days after conception using a new American-developed gene-copying technique.

[21218005] |The experiment, applicable to many genetic disorders, involved beta-thalassemia, a severe blood anemia resulting from a missing hemoglobin gene.
[21218006] |It's an inherited human disorder that's been duplicated in mice.
[21218007] |In the experiment, mice with the defective gene were mated.
[21218008] |Three days later, before the new embryo had become implanted in the uterus, it was washed out of the mother mouse.
[21218009] |The embryo had progressed only to a clump of eight identical cells.
[21218010] |One cell was teased out, and its DNA extracted.

[21218011] |Using the new technique developed by Cetus Corp., called the polymerase chain reaction, the scientists rapidly made millions of copies of the section of DNA that ordinarily contains the hemoglobin gene, providing enough copies to test.
[21218012] |A genetic probe showed the hemoglobin gene was missing, the researchers report in the medical journal Lancet.

[21218013] |In the report, two molecular biologists suggest such embryo diagnosis can be used by couples at high risk of passing a genetic defect to a child.

[21218014] |For example, infertile couples who have the woman's eggs fertilized in the test tube usually have several eggs fertilized at a time.
[21218015] |When the fertilized cells divide to eight cells, a single cell from each embryo can be tested for genetic defects.
[21218016] |A healthy embryo can be picked for implantation and defective ones discarded.

[21218017] |Or in other couples, the embryo could be temporarily taken out and tested three days after conception and returned if healthy, or discarded if not.

[21218018] |Yeast Adapted to Make Gene-Spliced Drugs

[21218019] |AN OIL COMPANY finds a sideline in the microscopic world of yeast.

[21218020] |In the early 1970s, when the "world food crisis" was a major worry, Phillips Petroleum Co., like several other big companies, began developing "single-cell protein," edible protein made by microbes feeding on non-edible materials.
[21218021] |Phillips found and improved a yeast, "Pichia pastoris," which made protein from natural gas-derived alcohol.
[21218022] |It also could convert glucose from farm wastes into edible protein.
[21218023] |Single-cell protein never panned out, and most companies abandoned such research.

[21218024] |But Phillips persisted, calling in scientists from the Salk Institute.
[21218025] |They've now adapted the yeast to making genetically engineered drugs.
[21218026] |Like the bacteria used by genetic engineers, the yeast can take in human genes and churn out human proteins for medical use.
[21218027] |But the yeast genetic apparatus is more like that of animals than the bacterial genetic apparatus.
[21218028] |Thus, the proteins from the yeast are molecularly more like human proteins than those from bacteria.

[21218029] |The oil company claims its yeast system also is better than bacteria at high-volume production of genetically engineered drugs.
[21218030] |Chiron Corp., an Emeryville, Calif., biotechnology firm, is seeing if the Phillips yeast can be used to make its genetically engineered human proteins.

[21218031] |Peeking Inside Arteries From Outside the Body

[21218032] |VISUALIZING BLOOD vessels without poking catheters into the body may come out of research at AT&T Bell Laboratories.

[21218033] |Strokes, heart attacks, leg pains (intermittent claudication) and other problems stem from clogging of the arteries by cholesterol-rich deposits.
[21218034] |At present, doctors can see how badly an artery is clogged only by inserting a thin catheter into the artery and injecting a fluid that makes the arteries visible on X-rays.

[21218035] |A non-invasive method is being researched by biophysicist Lynn Jelinski at the AT&T unit.
[21218036] |It relies on the fact that certain atoms give off detectable signals when subjected to an intense magnetic field.
[21218037] |It's the same phenomenon used in the new MRI (magnetic resonance imaging) scanners being used in hospitals in place of X-ray scans.

[21218038] |In the Bell Labs experiments, an MRI-type of machine, synchronized with the heartbeat via an electrocardiogram, rapidly flashes a magnetic field on and off as blood passes a certain point in a vessel.
[21218039] |The rapidly flashing return signals from excited hydrogen atoms in the blood give a "stop-motion" movie of the blood-filled vessel, (like the "stop-motion" seen in disco dancers when a strobe light is flashing).

[21218040] |The scientists have experimented on the tiny neck arteries of rats.
[21218041] |They've been able to measure the minuscule movements of the artery wall as the beating heart raises and lowers the pressure of the flowing blood, a first for such tiny blood vessels, they report in Nature, a scientific journal.
[21218042] |They now are experimenting with measuring blood flow.
[21218043] |The ultimate hope is that the technique could identify diseased vessels.

[21218044] |Odds and Ends

[21218045] |TESTS ON 2,800-year-old mummies from Chile indicate ancient wood fires didn't produce dioxins or dibenzofurans, contradicting a theory the two pollutants today are coming from wood burning, General Electric Co. reports in Environmental Science & Technology magazine. . . .
[21218046] |Almost 40% of schizophrenic men have an impaired sense of smell vs. fewer than 10% of schizophrenic women, reports the American Journal of Psychiatry.

[21219001] |The Justice Department said it filed a lawsuit seeking more than $7.7 million from a Meredith Corp. unit on charges that the company defrauded the government on a contract to provide relocation services for federal employees.

[21219002] |The suit, filed in federal trial court in Des Moines, Iowa, where Meredith is based, alleges that the diversified media company's relocation unit cheated the government by misrepresenting the value of government employees' homes.
[21219003] |The government contract required Meredith Relocation Corp. to purchase employees' homes based on independent appraisals.
[21219004] |The Justice Department alleges that the company "engaged in various forms of misrepresentation" with the goal of reducing the appraised value of employees' homes.

[21219005] |In the suit, the department seeks to recover $7.7 million in costs incurred when the government terminated its contract with Meredith Relocation and sought other contracts to replace it.
[21219006] |The department also said it seeks "three times the government's damages, which are presently undetermined, plus penalties."

[21219007] |Officials with Meredith didn't have any immediate comment on the suit.

[21220001] |Lloyd's of London said it plans to clamp down on the ability of underwriting syndicates to leave their annual accounts open beyond the customary three years.

[21220002] |Underwriting syndicates at Lloyd's, the world's largest insurance market, generally don't close their accounts for three years, to allow for the filing of claims and litigation.
[21220003] |When such claims and litigation extend beyond the period, the syndicates can extend their accounting deadlines.
[21220004] |Lloyd's said there are currently 115 open account years involving 68 of the market's roughly 360 syndicates.

[21220005] |The open-year accounting practice "is widely recognized within Lloyd's as of serious concern" to the 31,329 member investors, who underwrite insurance at Lloyd's in return for premium and investment income, Lloyd's said.
[21220006] |The procedure causes "great uncertainty" because an investor can't be sure of his or her individual liability, Lloyd's said.

[21220007] |As a result, the insurance market plans new measures to restrict the ability of syndicate officials to leave years open.
[21220008] |Lloyd's said it expects to enact new rules mandating the changes by year end.

[21220009] |Under the new rules, the officials will have to secure additional information and reports from actuaries, including an assessment of whether officials have acted reasonably.
[21220010] |In addition, officials will have to get quotes for certain reinsurance contracts and obtain approvals from other syndicate directors.

[21221001] |Computer Associates International Inc. reported earnings for the second quarter, ended Sept. 30, plummeted 66%, primarily because of the acquisition of Cullinet Software Inc.

[21221002] |The nation's largest software company earned $9.6 million, or five cents a share, compared with $28 million, or 16 cents a share, a year earlier.
[21221003] |Revenue rose 5% to $282 million from $268.3 million.

[21221004] |The drop in earnings had been anticipated by most Wall Street analysts, but the results were reported after the market closed.
[21221005] |Computer Associates closed at $13.625, down 25 cents, in composite trading on the New York Stock Exchange.

[21221006] |Anthony Wang, president, attributed the drop to the disruption of the company's business resulting from the prolonged process of acquiring Cullinet.
[21221007] |The acquisition was completed in September.

[21221008] |In August, the company warned investors that the acquisition was being delayed, and many customers were holding off on purchase decisions until the takeover was completed.
[21221009] |The delays mainly affected sales of data base management products, a core area for both Computer Associates and Cullinet, as well as sales of other products as part of package sales.

[21222001] |Residents of this city soon will be seeing ads urging them to visit "Cleveland's outdoor museum" -- Lake View Cemetery.

[21222002] |Despite such famous tenants as oil magnate John D. Rockefeller, Lake View Cemetery has fallen on hard times.
[21222003] |So the inner-city burial ground is trying to resurrect itself with a television advertising campaign.

[21222004] |The ads celebrate the achievements of some of Lake View's residents.
[21222005] |A spot honoring Bill White, the inventor of chewing gum, shows a woman trying to extricate her high-heeled shoe from a wad of gum.

[21222006] |Another focuses on Charles Brush, the first person to light a city electrically.
[21222007] |It shows a boy hurling rocks at a street lamp.
[21222008] |Street lights, the ad points out, "helped sharpen the arm of many a budding baseball player."

[21222009] |Cemetery officials hope the ads, which will begin airing next month, will not only draw visitors but bolster burials and endowment fund contributions.
[21222010] |Lake View had an operating deficit last year and has a poor reputation as an out-of-repair and crime-infested cemetery.

[21222011] |The private, non-profit cemetery has had trouble competing against its for-profit counterparts, which use direct mail and other advertising to sell lots.
[21222012] |"We don't want to be known as ambulance chasers," says William Garrison, Lake View's president.
[21222013] |"We want people to think of Lake View as an historical park and educational experience. . . .
[21222014] |A pleasant place to come and spend a few hours."

[21222015] |Not all of the cemetery's better-known tenants lend themselves to the promotional job at hand, however.
[21222016] |For example, President James A. Garfield is entombed here, the victim of an assassination in 1881.
[21222017] |(Mr. Garrison notes, however, that the Garfield tomb is one of the nation's premier examples of Romanesque architecture.)

[21222018] |Mr. Rockefeller, buried beneath a 180-foot-tall granite obelisk, didn't seem right for an ad either.
[21222019] |The oil magnate, who spent his later years passing out dimes to counter his penny-pinching image, "isn't terribly amusing," says Barry Olson, creative director at Innis-Maggiore-Olson, Canton, Ohio, which is producing the ads.
[21222020] |But there are plenty of other promising prospects at Lake View, promoters believe: Ernest Ball, for instance, who wrote "When Irish Eyes are Smiling," and Garrett Morgan, the inventor of the gas mask and the tri-colored traffic light.

[21223001] |Euro Disneyland shares made a debut like Snow White yesterday while most of the London stock market looked like it had eaten the Evil Queen's poisoned apple.

[21223002] |In its first day of when-issued trading here, Euro Disney soared like Dumbo to close at 814 pence ($13.05), up 15% from its 707-pence offering price.
[21223003] |The overall London market, following Wall Street's early nosedive, took a late beating.
[21223004] |The Financial Times-Stock Exchange 100-Share Index plummeted 40.4 points to close at 2149.3.

[21223005] |Traders credited Euro Disney's share performance to the tremendous hyping of the project that the shares are destined to help finance: Walt Disney Co.'s 4,800-acre theme park 20 miles east of Paris.
[21223006] |The park is slated to open in 1992.

[21223007] |"The issue was very well-received -- Disney is such a well-known, you can say world-wide, name," said Vernon Dempsey, head trader of European equities at Kleinwort Benson Ltd., which is making a market in the issue.

[21223008] |Mr. Dempsey estimated that the issue's London debut was accompanied by "very, very heavy turnover -- between five million and six million shares."
[21223009] |Most of the buying was institutional, he added.

[21223010] |Official trading in the shares will start in London, Paris and Brussels on Nov. 6, when the French-franc denominated offering, valued at the equivalent of nearly $1 billion, comes to market in the European Community.
[21223011] |U.S. investors will be permitted to buy the shares from EC investors 90 days later.

[21223012] |Because of the interest connected with the issue, the London exchange took the unusual step of letting traders establish an officially sanctioned when-issued market.

[21223013] |A volatile, unofficial "gray" market in the shares has been operating in Paris for about two weeks.
[21223014] |In contrast to the London performance, Euro Disney there closed down three francs yesterday, at 79 1/2 francs ($12.66) bid, but still about 10% over the 72-franc offering price.

[21223015] |"A lot of people are getting hurt on this wicked whipsawing," cautioned Alistair Cuddeford, a London-based Salomon Brothers International Ltd. trader who makes a market in franc-denominated Euro Disney shares.
[21223016] |"There should be no great rush for investors to buy this.
[21223017] |A lot of big European banks, mostly French, and Swiss arb accounts have been buying the stock just to flip it" for a quick profit, he said.

[21224001] |Albert Fried Jr., a 59-year-old director and holder of a 9.5% stake in the company, was named chairman of this maker of products for the construction equipment, material handling and railroad industries.
[21224002] |He succeeds L.L. White Jr., 62, who resigned but continues as a director.
[21224003] |Mr. Fried also is the managing partner of Albert Fried & Co.

[21225001] |Ford Motor Co. intensified its battle with General Motors Corp. over Jaguar PLC by saying it is prepared to make a bid for all of the British auto maker when restrictions on its shareholding are lifted.

[21225002] |The statement was part of a Ford filing with the U.S. Securities and Exchange Commission.
[21225003] |Ford didn't say how much it might offer for Jaguar, or when.
[21225004] |The British government currently forbids any outside investor from holding more than 15% of the company's shares without permission until Dec. 31,

[21225005] |But with its stake in Jaguar, which it raised yesterday to 11.95%, Ford could convene a special Jaguar shareholders' meeting and urge holders to vote to drop the restriction sooner.
[21225006] |A successful vote would put pressure on the British government to lift the restriction.

[21225007] |"We have not made that decision" to seek a Jaguar special shareholders' meeting, said Martyn Watkins, a Ford spokesman in London.
[21225008] |He emphasized that the car maker only would bid for all of Jaguar under the right circumstances, and said "those circumstances aren't right or possible at the moment."

[21225009] |Last month, Ford announced plans to acquire as much as 15% of Jaguar.
[21225010] |Since then, Jaguar officials have confirmed that they are discussing an alliance with GM and said last week that they hoped to reach an agreement within a month.

[21225011] |Analysts have been expecting a GM-Jaguar pact that would give the U.S. car maker an eventual 30% stake in the British company and create joint ventures that would produce an executive-model range of cars.
[21225012] |But the specter of Ford eventually launching a full-fledged bid could unravel the GM-Jaguar talks.

[21225013] |Jaguar seems to be losing interest in giving GM a minority stake, said one individual close to the talks, adding, "It wouldn't surprise me if {Jaguar executives} want to wait and see what the color of that {Ford bid} is" first.
[21225014] |He predicted Ford officials will meet with Jaguar executives in the next week to outline their proposed offer.
[21225015] |Sir John Egan, Jaguar's chairman, so far has refused to meet with Ford officials, but he is believed to be willing to consider a specific bid proposal.

[21225016] |As for GM, its "fallback position has to be a full bid itself," said Stephen Reitman, European auto-industry analyst at London brokers UBS-Phillips & Drew.
[21225017] |A Ford takeover of Jaguar would "have such implications for the balance of power in the 1990s that General Motors can't afford to step aside.
[21225018] |They will have to throw their hat in the ring."

[21225019] |A GM spokesman yesterday reiterated the company's interest in acquiring a minority stake to help Jaguar remain independent.

[21225020] |A pitched battle could mean Jaguar would fetch #10 ($16.02) a share, or about #1.8 billion ($2.88 billion), several analysts believe.
[21225021] |The prospect of such a takeover fight has sent Jaguar shares soaring in recent weeks.
[21225022] |U.S. takeover-stock speculators now own an estimated 25% of Jaguar shares.
[21225023] |In a declining London stock market yesterday, Jaguar shares were down four pence from Monday in late trading, at 694 pence ($11.11) a share.
[21225024] |In the U.S., Jaguar's American depositary receipts rose 12.5 cents in over-the-counter trading, to $11.25.

[21225025] |Both Ford and GM badly need a luxury brand to combat new competition from the Japanese in the European and U.S. markets.
[21225026] |And financially strapped Jaguar has spent over a year looking for a rich uncle to provide cash and technological know-how.
[21225027] |The company has expressed a preference for GM over Ford because GM has promised it would keep Jaguar independent.

[21225028] |Ford's need to acquire some or all of Jaguar became more acute last week when it abandoned a four-year effort to market its German-built Merkur Scorpio sedan as a European luxury import in the U.S.
[21225029] |Then, last Friday, Ford's talks about a possible alliance with Saab-Scania AB of Sweden collapsed.

[21225030] |GM's interest in Jaguar reflects a desire to help diversify the U.S. company's products in the growing luxury-car segment of the market.
[21225031] |Its Opel line has a solid image and a recent string of highly successful new models, but it lacks Jaguar's cachet.
[21225032] |GM officials also see a lot of potential in marrying Jaguar's cars to the technological know-how of Group Lotus PLC, a British engineering and specialty car maker GM bought in 1986.

[21226001] |Texaco Inc. reported an 11% increase in third-quarter earnings, which it attributed partly to the company's massive restructuring after it emerged from bankruptcy-law proceedings 18 months ago.

[21226002] |Sun Co. also reported higher earnings.
[21226003] |Meanwhile, like many other oil companies hurt by less-profitable downstream businesses, Mobil Corp., Shell Oil Co. and Chevron Corp. reported lower quarterly earnings.

[21226004] |Texaco

[21226005] |Texaco's exploration and production earnings improved as a result of its streamlining of those operations as it sold many of its marginal producing properties over the past 18 months.
[21226006] |An increase in production at some major oil fields in the North Sea, which had been knocked out by an explosion in July 1988, also aided results.
[21226007] |The sale of a portion of refining and marketing operations to Saudi Arabia helped alleviate the decline in earnings from that business.

[21226008] |"The company has been completely revamped," said Frank Knuettel, analyst for Prudential-Bache Securities Inc.

[21226009] |Third-quarter net income at Texaco rose to $305 million from $274 million last year.
[21226010] |Revenue declined 3.4%, to $8.4 billion from $8.7 billion.
[21226011] |Per-share earnings declined to $1.10 a share from $1.12 a share, largely because of 21 million additional shares issued to retire $1 billion of debt.
[21226012] |Per-share earnings also shrank because of dividends on a new series of preferred stock.

[21226013] |Sun Sun Co.'s net income climbed 18% to $85 million, or 80 cents a share, from $72 million, or 67 cents a share.
[21226014] |Revenue increased 11%, to $2.73 billion from $2.46 billion.

[21226015] |Sun said some of the growth reflects higher earnings in the oil sands operation of Suncor, a majority-owned Canadian subsidiary.
[21226016] |Chairman Robert McClements Jr. said the synthetic crude oil production from the facility rose even as the price for that oil increased.
[21226017] |Overseas exploration and production results also improved because of additional output from the North Sea Magnus Field, a portion of which was acquired by Sun earlier this year.
[21226018] |Results declined, however, in Sun's refining and marketing and coal businesses.

[21226019] |Shell Oil

[21226020] |Profits of Shell, a subsidiary of the Royal Dutch/Shell Group, tumbled $24 million, or 6.6%, to $340 million, despite a gain of $30 million from an insurance settlement.
[21226021] |President Frank Richardson attributed the decline to lower natural gas prices, which countered higher earnings from the crude oil sector of Shell's exploration and production operation.
[21226022] |Shaving away some of the gain in that unit was a decline in U.S. oil production to 502,000 barrels of oil a day during the quarter from 527,000 barrels a day last year.

[21226023] |Shell's chemical earnings fell by $67 million, to $137 million, reflecting lower margins and less demand for commodity chemicals.

[21226024] |Mobil

[21226025] |Net income at Mobil Corp. slipped 4.5% to $532 million, or $1.30 a share, from $557 million, or $1.36 a share.
[21226026] |Revenue declined $518 million, to $13.63 billion.

[21226027] |Earnings included a one-time gain of $192 million on a property transaction in Hong Kong.
[21226028] |Exploration and production profits slumped $40 million due to a provision for restructuring costs.
[21226029] |The restructuring will take place over a two-year period and will involve the transfer and layoff of employees in U.S. operations to reduce costs and focus efforts in other areas.

[21226030] |Last year, third-quarter earnings included a $157 million gain from foreign tax rate changes and a loss from a $65 million write-off of reserves.

[21226031] |Chevron

[21226032] |Chevron's net income fell 0.7%, to $417 million, or $1.22 a share, from $420 million, or $1.23 a share.
[21226033] |Results included a $37 million gain from the sale of rights from Chevron's investment in Amax Inc., and a loss of $30 million from the sale of California oil and gas properties.
[21226034] |Revenue rose 11%, to $8 billion from $7.2 billion.

[21226035] |Chevron said higher crude oil prices boosted profits from production operations, but margins in refining and marketing declined.
[21226036] |Profits from U.S. exploration and production operations totaled $58 million, after the property sale loss, compared with a year-earlier $44 million loss that included a $16 million reorganization charge.

[21226037] |Refining and marketing operations earned $130 million in the quarter this year, compared with earnings of $186 million a year earlier that included $18 million in charges for environmental programs.
[21226038] |Foreign earnings fell to $180 million from $182 million that included a $48 million gain from lower Canadian and Australian taxes.
[21226039] |Chemical profits fell to $78 million from $98 million.

[21226040] |Jeff Rowe contributed to this article.

[21227001] |Asarco Inc., continuing its effort to refocus its business, ended its involvement in asbestos mining in the third quarter and said it would stop mining and selling coal by year end.

[21227002] |The mining, metal and specialty-chemical concern said combined revenue for asbestos and coal was about $40 million of the company's total revenue in 1988 of $1.98 billion.
[21227003] |Richard de J. Osborne, chairman, president and chief executive officer, said the company's "decisions to get out of asbestos and high-sulfur coal continue the process of simplifying and focusing the company in areas with a better future."

[21227004] |Asarco also reported third-quarter net income rose 14%, to $52.7 million, or $1.25 a share, from a restated $46.2 million, or $1.10 a share, a year earlier.
[21227005] |Asarco said the gain reflected continued strength in prices for refined copper, lead and zinc, and higher equity earnings in Mexico Desarrollo Industrial Minero S.A., a Mexican mining company in which Asarco has a 34% stake.
[21227006] |The 1988 results were restated for accounting-rules changes.

[21227007] |Sales rose 4.5% to $522.3 million from $499.4 million.

[21227008] |In August, Asarco, through its Lac d'Amiante du Quebec subsidiary, sold its remaining one-third interest in an asbestos mining limited partnership in Canada for $11.7 million.
[21227009] |Asarco said it plans to shut down or sell its Rapatee coal mine and will end its involvement in southern Illinois strip mining.
[21227010] |The company said that it is discussing a management-employee buy-out of the facility, but that it would stop mining and selling coal at year end when existing sales contracts expire, regardless of the outcome of those talks.

[21227011] |In New York Stock Exchange composite trading, Asarco fell $1.375 to close at $31.75.

[21228001] |Companies listed below reported quarterly profit substantially different from the average of analysts' estimates.
[21228002] |The companies are followed by at least three analysts, and had a minimum five-cent change in actual earnings per share.
[21228003] |Estimated and actual results involving losses are omitted.

[21228004] |The percent difference compares actual profit with the 30-day estimate where at least three analysts have issues forecasts in the past 30 days.
[21228005] |Otherwise, actual profit is compared with the 300-day estimate.

[21229001] |David W. Lodge was elected vice president and chief financial officer, effective Nov. 1.
[21229002] |Mr. Lodge, 48 years old, a former finance executive at Singer Sewing Machine Co. and Celanese Corp., succeeds Francis L. Brophy, 64, who plans to retire from the company next year.

[21230001] |Carlos A. Salvagni, vice president, pharmaceutical manufacturing, will assume responsibility for manufacturing in Kalamazoo, Mich., effective Nov. 1.
[21230002] |Mr. Salvagni, 53 years old, succeeds John C. Griffin, 57, who is retiring as corporate vice president of pharmaceutical manufacturing.
[21230003] |Upjohn is a world-wide provider of health-care products and services, seeds and speciality chemicals.

[21231001] |This Brooklyn, N.Y., generic-drug maker announced a 5% stock dividend payable Dec. 15, to holders of record Nov. 15.
[21231002] |As of Sept. 30, Halsey had 5.3 million common shares outstanding.
[21231003] |Jay Marcus, president, said the move "reflects the confidence of our board and management in Halsey's long-term prospects and our desire to provide our shareholders with an attractive return on their investment."
[21231004] |In American Stock Exchange composite trading, Halsey closed at $5.8125 a share, up 6.25 cents.

[21232001] |Walter M. Brady was named a senior vice president of this insurer in the Canadian head office.
[21232002] |He had been vice president in that office.
[21232003] |John B. Foy was named senior vice president and remains responsible for the individual policy services department.
[21232004] |Frank J. Ollari was named senior vice president in charge of the mortgage finance department.
[21232005] |He had been vice president of the department, which was formerly called the real estate department.

[21233001] |Timothy C. Brown, a vice president, was named executive vice president and a director of this lighting and specialty products concern.
[21233002] |In the director post, Mr. Brown, 38 years old, succeeds Joseph W. Hibben, who retired from the board in August.
[21233003] |C. Barr Schuler, 49, vice president and chief financial officer, was named senior vice president of corporate development and acquisitions, a new post.
[21233004] |Phillip J. Stuecker, 37, vice president, secretary and treasurer, was named vice president of finance and chief financial officer.
[21233005] |He remains secretary.

[21234001] |Ronald B. Koenig, 55 years old, was named a senior managing director of the Gruntal & Co. brokerage subsidiary of this insurance and financial-services firm.
[21234002] |Mr. Koenig will build the corporate-finance and investment-banking business of Gruntal, which has primarily been a retail-based firm.
[21234003] |He was chairman and co-chief executive officer of Ladenburg, Thalmann & Co. until July, when he was named co-chairman of the investment-banking firm along with Howard L. Blum Jr., who then became the sole chief executive.
[21234004] |Yesterday, Mr. Blum, 41, said he wasn't aware of plans at Ladenburg to name a co-chairman to succeed Mr. Koenig and said the board would need to approve any appointments or title changes.
[21234005] |Mr. Blum added he wasn't surprised Mr. Koenig resigned, but his departure was "nothing that we desired or worked for."
[21234006] |Mr. Koenig said: "I just got a tremendous offer from Gruntal.

[21235001] |MCI Communications Corp. said it received a $12 million contract to provide virtual network services to Woolworth Corp.'s 5,600 corporate and retail sites in the

[21235002] |The contract also provides for advanced billing and network management services.
[21235003] |Woolworth said it expects to expand usage of the MCI services as it adds about 6,000 business locations over the next few years.

[21236001] |The Philippine merchandise trade deficit widened to $1.71 billion during the first eight months of 1989 from $807 million a year earlier.

[21236002] |Imports continued to outpace Philippine exports, despite gains in shipments abroad, the government National Statistics Office said.

[21236003] |Exports reached $5.12 billion, up from $4.52 billion a year earlier, while imports rose to $6.81 billion from $5.33 billion.

[21236004] |The trade deficit in the first eight months is already wider than the trade gap of $1.09 billion for all of 1988.

[21236005] |Analysts expect the trade gap for the year to surpass $2 billion as demand for capital equipment and raw materials continues to push imports higher.

[21237001] |Birtcher Corp. said it signed a definitive agreement with C.R. Bard Inc., a Murray Hill, N.J., maker of health-care products, for the purchase of the company's Bard/EMS Electrosurgery division for about $11 million.

[21237002] |Birtcher, a maker of electronic medical equipment, said the transaction is expected to close on or before Nov. 30.
[21237003] |Bard/EMS had 1988 sales of about $14 million, Birtcher said.

[21238001] |WINSTON-SALEM, N.C. --
[21238002] |First Wachovia Corp. said John F. McNair III will retire as president and chief executive officer of this regional banking company's Wachovia Corp. and Wachovia Bank & Trust Co. subsidiaries on Dec. 31.

[21238003] |Mr. McNair, 62 years old, will be succeeded by L.M. "Bud" Baker Jr., 47, the parent's chief credit officer and head of its administration division.
[21238004] |Mr. Baker will relinquish his previous positions, but a successor for him hasn't been named yet.

[21238005] |In addition, on Jan. 1, Thomas A. Bennett, 52, will become vice chairman and chief operating officer of Wachovia and Wachovia Bank & Trust, filling a vacancy left by the retired Hans W. Wanders in April.
[21238006] |Mr. Bennett will continue as executive in charge of the North Carolina banking operation.

[21238007] |Messrs. Baker and Bennett have been elected directors of Wachovia and Wachovia Bank & Trust filling vacant seats on both boards.

[21239001] |Canadian retail sales rose 0.2% in August from July, Statistics Canada, a federal agency, said.

[21239002] |The August increase followed a 0.3% decline in July.
[21239003] |During the past four months, retail sales have remained generally weak, advancing an average 0.2% a month, the agency said.

[21240001] |Raw-steel production by the nation's mills decreased 0.7% last week to 1,816,000 tons from 1,828,000 tons the previous week, the American Iron and Steel Institute said.

[21240002] |Last week's output fell 1.7% from the 1,848,000 tons produced a year earlier.

[21240003] |The industry used 81.6% of its capability last week, compared with 82.2% the previous week and 86.2% a year ago.

[21240004] |The American Iron and Steel Institute reported: The capability utilization rate is a calculation designed to indicate at what percent of its production capability the industry is operating in a given week.

[21241001] |With reduced exports and rising imports, South Korea's trade surpluses with the U.S. and Europe between January and September fell sharply from a year ago, the Customs Administration said.

[21241002] |Officials said South Korea's trade surplus with the U.S. for the first nine months of the year totaled $3.49 billion, down 43% from the same period last year on a customs-clearance basis.

[21241003] |South Korean exports to the U.S. during the period fell 1.6% from a year ago to $15.06 billion, while imports from the U.S. soared 26% to $11.56 billion.

[21241004] |The trade surplus with Europe was pegged at $414 million, down 57% from a year ago.
[21241005] |Officials said South Korean exports to Europe dropped 5.3% to $3.02 billion while imports from there went up 17% to $2.61 billion.

[21242001] |Bausch & Lomb Inc. said its pharmaceuticals subsidiary agreed to supply collagen corneal shields for animal eye surgery to a unit of International Minerals & Chemical Corp.

[21242002] |Terms weren't disclosed.

[21242003] |The agreement marks Bausch & Lomb's first venture selling its eye care products for use by veterinarians.
[21242004] |The collagen corneal shield helps speed healing of the cornea after eye surgery.

[21242005] |The product will be distributed by Pitman-Moore Inc., a subsidiary of International Minerals.

[21243001] |France's industrial production index for July and August rose 1% from June and was up 4.6% from a year ago, according to seasonally adjusted data from the National Statistics Institute.

[21243002] |The state agency, which usually publishes the data on monthly basis, but traditionally combines the index for the two summer-holiday months, said the advance was led by output of consumer goods, which rose 3.5% from June and was up 7.2% from a year earlier.

[21243003] |Semifinished goods turned in a strong showing, with a monthly rise of 2% and a year-on-year advance of 3%.
[21243004] |Food production was ahead 1.7% from June and 5.3% from a year earlier.
[21243005] |Output in the capital-goods sector was ahead 0.9% on a monthly basis and 2.7% year on year.

[21243006] |These gains were partly offset by output of cars and other consumer durables, which eased 3.9% from June's high level.
[21243007] |The sector was still 8.8% above its output levels from a year earlier, however.

[21244001] |International Minerals & Chemical Corp. said it agreed definitively to sell its international fragrance business to Bayer AG of West Germany.
[21244002] |Terms weren't disclosed.

[21244003] |The maker of animal health and nutrition products said the business, Creations Aromatiques of Port Valais, Switzerland, and Woodside, N.Y., is a division of its Mallinckrodt Inc. subsidiary and had sales of about $30 million for its most recent year.

[21244004] |International Minerals said the sale will allow Mallinckrodt to focus its resources on its core businesses of medical products, specialty chemicals and flavors.

[21245001] |Consumers Power Co. filed with the Michigan Public Service Commission a contract to buy power from the Palisades nuclear plant under a proposed new ownership arrangement for the plant.

[21245002] |Consumers Power and Bechtel Power Corp. last year announced a joint venture to buy the plant, currently owned completely by the utility.

[21246001] |Two Japanese scientists said they discovered an antibody that, in laboratory test-tube experiments, kills AIDS-infected cells while preserving healthy cells.

[21246002] |If further experiments are successful, the work would represent a major advance in research on acquired immune deficiency syndrome.
[21246003] |The drug AZT, the only treatment currently on the market, claims only to help stop the spread of AIDS, not to cure it.

[21246004] |But several analysts and Japanese scientists familiar with the study, which was announced at a conference in Nagoya yesterday, expressed skepticism over the significance of the results.
[21246005] |And the researchers themselves acknowledged they still must do much more work before they can say whether the treatment would actually cure humans.

[21246006] |Shin Yonehara, a research scientist at the Tokyo Metropolitan Institute of Medical Science, said the antibody he discovered works by recognizing an antigen called a Fas-antigen, which is characteristic of an infected cell.
[21246007] |The antibody then kills the cell.

[21246008] |Dr. Yonehara and his partner, Nobuyuki Kobayashi of Yamaguchi University, said their experiments showed that the antibody wiped out an average of 60% of AIDS-infected cells within three days.
[21246009] |In some of the experiments, it killed almost all the infected cells, the researchers said.
[21246010] |Meanwhile, fewer than 10% of the healthy cells were killed.

[21246011] |The two said they must still do more laboratory tests, then experiment on animals.
[21246012] |They said they hoped to conduct tests on human patients in the U.S. by late next year.
[21246013] |Japan doesn't have enough AIDS patients to do significant experimentation in that country, they said.

[21246014] |The announcement got wide exposure in the Japanese media, and even moved some pharmaceutical stocks yesterday.
[21246015] |But Takashi Kitamura, director of the biology department at Japan's National Institute of Health and secretary of the government's AIDS-research center, said, "I'm not so optimistic of its future use in therapeutic methods."
[21246016] |He said some infected cells may not have the relevant antigen and so wouldn't be killed even after exposure to the antibody.

[21246017] |"The results seem to be very premature," said Mitsuru Miyata, editor of Nikkei Biotechnology, a leading Japanese industry newsletter.

[21246018] |Dr. Kobayashi responded that he thought the antibody could potentially kill all infected cells.
[21246019] |But he and Dr. Yonehara said there were still several uncertainties, particularly regarding possible side effects.
[21246020] |"Our antibody specifically killed infected cells at a very low dose, but it can also kill other cells," said Dr. Yonehara.
[21246021] |"We don't know the effect of our antibody on the human body."

[21246022] |AIDS isn't considered a widespread problem in Japan -- the government reports about 1,000 known carriers of the virus -- but many companies have poured substantial resources into research in recent years, hoping to cash in on a possible cure.

[21246023] |Dr. Kitamura said about 35 projects are currently under way in Japan, and that Japanese researchers in the past year have made available three possible cures to American researchers for clinical tests.
[21246024] |He said that when scientists from the two countries meet again in January in New Orleans, the Japanese will present at least three more drugs for human testing.

[21246025] |AZT is the world's only prescription medicine approved for treating the disease.
[21246026] |Wellcome PLC, a major British pharmaceutical maker, sells the drug under the name Retrovir.

[21246027] |A Wellcome spokesman declined to comment on the discovery of the antibody in Japan.
[21246028] |But Andrew Porter, a drug-industry analyst at Nikko Securities Co. in London, said if the product were to be successfully developed it would represent "a potential threat to the long-term viability of Retrovir.

[21247001] |The following issues were recently filed with the Securities and Exchange Commission:

[21247002] |American Exploration Co., offering of five million common shares, via Smith Barney, Harris Upham & Co. and Shearson Lehman Hutton Inc.

[21247003] |Chemical Waste Management Inc., proposed global offering of 8,500,000 shares of common stock, of which seven million of the shares will be offered in the U.S. and 1,500,000 shares will be offered overseas, via Merrill Lynch Capital Markets (domestic) and Kidder, Peabody & Co. (international).

[21247004] |Interlake Corp., proposed offering of $200 million of senior subordinated debentures, via Goldman, Sachs & Co.

[21247005] |InterMedia Capital Corp., Robin Cable Systems L.P. and Brenmor Cable Partners, offering of senior subordinated discount reset debentures, via Drexel Burnham Lambert Inc.

[21247006] |John Nuveen & Co., initial offerings of the Nuveen California Performance Plus Municipal Fund Inc. and the Nuveen New York Performance Plus Municipal Fund Inc., via Alex. Brown & Sons Inc.

[21247007] |KnowledgeWare Inc., initial offering of three million shares of its common stock, of which 1,657,736 shares will be sold by the company and 1,342,264 will be sold by holders, via Montgomery Securities and Donaldson, Lufkin & Jenrette Securities Corp.

[21247008] |MGM Grand Inc., proposed offering of six million shares of common stock, via Merrill Lynch.

[21247009] |Microlog Corp., formerly called Old Dominion Systems Inc., offering of 1.2 million common shares, of which one million will be sold by the company, and the balance by holders, via Hambrecht & Quist and Johnston, Lemon & Co.
[21247010] |Scott Paper Co., shelf offering of up to $360 million of debt securities, via Goldman Sachs, Salomon Brothers Inc. and Smith Barney, Harris Upham.

[21247011] |Sullivan Graphics Inc., offering of $110 million of senior subordinated notes, via Merrill Lynch.

[21247012] |Sun Sportswear Inc., initial offering of 1.7 million common shares, of which one million shares will be sold by the company, and the balance by a holder, via Salomon Brothers Inc. and Piper, Jaffray & Hopwood Inc.

[21247013] |Yes Clothing Co., proposed initial offering of 776,470 common shares, of which 600,000 shares will be offered by the company and 176,470 by holders, via Seidler Amdec Securities Inc.

[21248001] |A #320 million ($508 million) British Airways PLC rights issue flopped badly -- the victim of recent market turbulence and the collapse of the buy-out bid for United Airlines' parent, UAL Corp.

[21248002] |The United Kingdom carrier had planned the issue to help finance its $750 million purchase of a 15% stake in UAL.
[21248003] |But British Airways withdrew from the UAL labor-management buy-out plan last Friday, after the group failed to get bank financing for its $6.79 billion buy-out.

[21248004] |British Airways said its shareholders accepted only 6.3% of the convertible capital bonds, but that the rest of the issue will be taken up by underwriters.
[21248005] |Analysts said that 6.3% level marked the poorest showing for any major British rights issue since the 1987 global stock market crash.

[21248006] |"It is close to being a record undersubscription," said Bob Bucknell, an analyst with London broker Smith New Court Securities.
[21248007] |"Fund managers don't like to have rights issues that don't have an obvious reason.
[21248008] |The obvious reason was (for British Air) to buy a stake in United Airlines."

[21248009] |In a statement, British Air Chairman Lord King said the company was "obviously disappointed that the issue was not taken up, but it would have been unreasonable to expect a better result given the volatility of the stock market since the launch of the issue."

[21248010] |But except for the embarrassment, British Air will emerge relatively unscathed from the flopped issue.
[21248011] |Underwriters led by Lazard Brothers & Co. will pick up the rest of the airline's offer of four convertible capital bonds for every nine common shares.
[21248012] |Lazard and other primary underwriters have reduced or eliminated their exposure by sub-underwriting the issue among U.K. institutional investors.
[21248013] |"The (paper) loss here is very small" for these sub-underwriters, observed John Nelson, a Lazard managing director.
[21248014] |In any case, he added, "most institutions probably won't sell" the bonds.
[21248015] |And instead of buying the UAL stake, the U.K. carrier will be able to reduce its high debt level and build an acquisition war chest.
[21248016] |"From a cash flow point of view, British Airways is better off not being in United Airlines in the short term," said Andy Chambers, an analyst at Nomura Research Institute in London.
[21248017] |Added another U.K. analyst: "It gives them some cash in the back pocket for when they want to do something."

[21248018] |For instance, British Air is continuing to negotiate with KLM Royal Dutch Airlines about each acquiring a 20% stake in Sabena World Airlines, the air transport subsidiary of the Belgian national airline.
[21248019] |A definitive agreement had been expected by the end of July.

[21248020] |The failed rights issue also should have a modest impact on British Air shares.
[21248021] |The airline's share price already is far below the 210 pence ($3.33) level seen after the company announced the rights issue in late September.
[21248022] |In late trading on London's Stock Exchange yesterday, the shares were off three pence at 194 pence.
[21248023] |And because British Air is issuing convertible bonds rather than ordinary shares, the share price won't be directly hurt by any surplus left with underwriters after they try to sell the issue in the open market.

[21248024] |But British Air's withdrawal from the UAL buy-out could have further repercussions.
[21248025] |Some analysts speculated yesterday that the move has set off a board room split, which may lead to the resignation of Sir Colin Marshall, the carrier's chief executive officer.
[21248026] |"The stories are rubbish," a British Air spokesman said.
[21248027] |"There is no difference of opinion between (Chairman) Lord King and Sir Colin on any aspect of company policy.

[21249001] |MINORITY RECRUITING has yet to meet hopes raised by Bush administration.

[21249002] |Six months ago, as some personnel specialists saw it, a perception that President Bush really cared about fair employment -- after what they said was eight years of Reagan-era neglect -- was prodding top management to raise hiring goals for females, blacks and other minorities.
[21249003] |The perception lingers, says an official at a major industrial company.
[21249004] |But so far, he declares, there's little evidence the "new urgency" is trickling down to the managers who actually do hiring.
[21249005] |"Is there really a commitment or an illusion of activity?" he asks.

[21249006] |The recruiting "hasn't materialized," asserts Jeffrey Christian, who runs a search agency.
[21249007] |Samuel Hall, Howard University's placement director, also doesn't see it.
[21249008] |And he questions the White House dedication.
[21249009] |"I don't think the Bush administration has done anything," he says.
[21249010] |Recruiter Donald Clark does note an increase in searches for minority candidates.

[21249011] |But some of the activity, he says, may reflect a rush to get "numbers in order" for end-of-year reports.

[21249012] |PAY FOR PERFORMANCE hangs mostly on boss's subjective view.

[21249013] |Du Pont Co. in a couple of units has installed objective tests based on earnings or return on equity.
[21249014] |Many companies have set up machinery to assure workers a fair shake.
[21249015] |At most firms, though, it's the immediate supervisor who decides the merit increases subordinates will be paid.
[21249016] |Managers have "some very broad discretion," says an official at Walt Disney Co.
[21249017] |Unocal Corp.'s top management sets guidelines, but line supervisors slice up the merit pie.

[21249018] |Lotus Development Corp. feeds its evaluations into a computer, but only for storage; the decisions are made by supervisors.
[21249019] |Hershey Foods Corp. strives for fairness by basing increases on quarterly reviews, annual appraisals and meetings with workers.
[21249020] |At Chemfix Technology Inc., each supervisor's recommendation must be approved by the next boss up the line, and then sanctioned by a salary review committee.

[21249021] |JAPANESE COMPANIES fare best in U.S. when they give Americans more say.

[21249022] |University of Michigan researchers find the companies earn more and win a bigger market share when their American employees get a voice in planning, product development and design, including decision-making back in Japan.
[21249023] |"You can't hire competent Americans and say, `Let them run only their own show,'" says Vladimir Pucik, who headed the study run with Egon Zehnder International, a search firm.

[21249024] |The researchers say many Japanese companies err in the U.S. by adopting the American practice of hiring managers on the "open market."
[21249025] |In Japan, by contrast, companies tend to develop their own talent and promote from within.
[21249026] |The Japanese also are accused of keeping their cards too close to their vests.
[21249027] |"Some Japanese executives are not yet . . . comfortable about sharing strategic information with their American colleagues," the researchers say.

[21249028] |Americans stay longer with Japanese firms than American companies.
[21249029] |But they think promotions are limited.

[21249030] |THE HOUSE votes down a proposal to put pension plans under the control of joint labor-management boards.
[21249031] |Some consultants had insisted it wouldn't work.

[21249032] |LONG-TERM care insurance gains favor.
[21249033] |More than half the people surveyed for the Employee Benefit Research Institute say they would be willing and able to pick up most of the cost of the coverage.

[21249034] |FRINGE-BENEFIT spending by small and medium-sized employers has dropped to 25% of payroll from 29% three years ago, says the National Institute of Business Management, an advisory service.

[21249035] |OUSTED EXECUTIVES over 50 years old take slightly less time than their younger colleagues to find a job -- 3.23 months vs. 3.26 for the juniors -- outplacement firm Challenger, Gray & Christmas finds.
[21249036] |It's the first time in the survey's 15 years that the over-50 group came out ahead.

[21249037] |FEAR OF AIDS hinders hiring at few hospitals.
[21249038] |Dedication runs high.

[21249039] |Wafaa El-Sadr, who heads the AIDS program at New York City's Harlem Hospital Center, can't find help.
[21249040] |"I've been recruiting every single day since it's been identified that many AIDS patients come from the inner city," she says.
[21249041] |She was the only staff physician available to treat AIDS patients last summer and now she has the help of only two doctors part time.
[21249042] |Part of the problem, though, may reflect a general unwillingness to work with the urban poor.

[21249043] |Parkland Memorial Hospital in Dallas says it hasn't had any problem recruiting, even after a nurse contracted the virus while injecting an AIDS patient.
[21249044] |"I can tell you that nobody quit over it.
[21249045] |No one panicked," a spokeswoman says.
[21249046] |St. Paul Medical Center, also in Dallas, sees only a "minimal erosion" of support staff due to AIDS.
[21249047] |Yale-New Haven Hospital sees no problem, says John Fenn, the chief of staff.

[21249048] |"There are enough enlightened and spirited individuals who know their responsibilities," he says.

[21249049] |THE CHECKOFF: At least somebody gains on layoffs.
[21249050] |The Association of Outplacement Consulting Firms says the industry's volume has soared tenfold since 1980, to $350 million a year. . . .
[21249051] |And somebody loses on the expected repeal of Section 89, the benefits test fought by most employers.
[21249052] |Triad Solutions says software producers had each invested hundreds of thousands of dollars in programs that now have no use.

[21250001] |Big gains for the ultra-right Republicans party in Baden-Wuerttemburg state municipal elections Sunday showed eroding support for Chancellor Helmut Kohl in a traditional bastion for his Christian Democratic Union.

[21250002] |With ballots from most of the state's major cities in by yesterday morning, the Republicans came away with 10% of the vote in several of the key districts.

[21250003] |With many rural districts yet to report ballots, election officials estimate support for Christian Democrats fell an average five percentage points statewide.
[21250004] |The left-of-center Social Democrats and the environmental Greens party posted mixed results.

[21250005] |Headed by a former Waffen SS sergeant and working from a nationalistic platform of anti-foreigner rhetoric, the fledgling Republicans party has scored surprising gains in earlier elections in the states of West Berlin, Hesse and North-Rhine Westphalia.

[21250006] |With West German unemployment remaining high at two million jobless and the lack of affordable housing becoming a primary issue for next year's campaign, the Republicans are seen drawing support for their "Germans First" stand on social-welfare issues.

[21250007] |Election analysts acknowledge that a "Red-Green" coalition of Social Democrats and Greens could edge out Chancellor Kohl's coalition in the December 1990 national election if support for the Republicans continues to spread.

[21250008] |International investigators urged Britain to allow prosecution of suspected Nazi war criminals who took refuge there after 1945.
[21250009] |Under current law, such suspects are immune from prosecution for acts committed while not British citizens.

[21250010] |"If we're not careful we could become known as a haven for war criminals," said Jeff Rooker, a member of Parliament and one of several British politicians attending a London conference with government investigators from the U.S., Canada and Australia.

[21250011] |A parliamentary inquiry found in July that more than 70 people living in Britain could have been part of death squads that roamed Nazi-occupied Eastern Europe.
[21250012] |Parliament is expected to discuss next month whether to change the law.

[21250013] |British investigations were prompted by a list of 17 alleged war criminals living in Britain sent to Prime Minister Margaret Thatcher in October 1986 by the Simon Wiesenthal Center in Los Angeles.

[21250014] |In a sign of easing tension between Beijing and Hong Kong, China said it will again take back illegal immigrants caught crossing into the British colony.
[21250015] |China had refused to repatriate citizens who sneaked into Hong Kong illegally since early this month, when the colony allowed a dissident Chinese swimmer to flee to the U.S.
[21250016] |About 1,100 Chinese were awaiting repatriation yesterday.

[21250017] |Italy's Foreign Ministry said it is investigating exports to the Soviet Union by an Ing. C. Olivetti & Co. subsidiary called OCN-PPL that makes numerically controlled machine tools.
[21250018] |Although Italy's investigation of whether Olivetti had violated Western export-control rules had previously been made known, this marked the first time the unit and product were named.
[21250019] |The U.S. is worried about the convertibility of Olivetti's machine tools to military use.
[21250020] |However, an Olivetti spokeswoman said OCN-PPL, of which Olivetti sold the majority interest last year, "doesn't make equipment that has the type of precision necessary for sophisticated productions."

[21250021] |Conservationists say that drift-net fishing threatens to wipe out much of the world's tuna stocks in a few years.
[21250022] |But the Japanese Fisheries Association criticized moves to ban the practice in international waters.
[21250023] |"It is really unfortunate for human beings to be swayed by emotional discussions," the association said.
[21250024] |In driftnet, or "wall of death," fishing, fleets lay nets up to three miles long that trap almost everything in their path.
[21250025] |Earlier this year, Japan said it would cut the number of its drift-net vessels in the South Pacific by two-thirds, or down to 20.

[21250026] |Workers at Peugeot S.A.'s car plant at Sochaux, in eastern France, voted to end a six-week-old strike that has cost the Peugeot group production of 60,000 automobiles, a company spokesman said.
[21250027] |The strikers voted to accept a series of management proposals that will give them a higher basic wage, better profit-sharing benefits and bigger annual bonuses.
[21250028] |The spokesman said the vote at Sochaux is expected to be followed by a similar move at the company's assembly plant at Mulhouse, where the number of strikers has been whittled down to 80.

[21250029] |About 8,000 National Union of Mineworkers members resumed their strike against De Beers Consolidated Mines Ltd. after further negotiations to settle a wage dispute broke down.
[21250030] |Striking workers, who began striking five diamond mines on Oct. 13, had returned to work last week when the union and De Beers arranged to reopen negotiations.
[21250031] |A De Beers spokesman said yesterday the company had offered to increase the minimum wage by 18%, while the union was demanding 26.6%.
[21250032] |Before the two parties resumed talks last week, De Beers offered 17% and the union wanted 37.6%.

[21250033] |China's People's Daily took note of the growing problem of computer fraud.

[21250034] |Since the first fraud was discovered in July 1986 at an office of the People's Bank of China in Shenzhen, 15 major cases have been found, the paper said; the biggest was the theft of $235,000 from a bank in Chengdu in March 1988.

[21250035] |The number of computers has mushroomed in recent years, with 10,000 in use, as well as 30,000 miniature models.
[21250036] |But security systems, effective management controls and regulations to govern their use have not kept pace, the People's Daily said.

[21250037] |Besides money, criminals have also used computers to steal secrets and intelligence, the newspaper said, but it gave no more details.

[21250038] |Japanese tourists will be told to take care when photographing earthquake damage in San Francisco, the Japan Association of Travel Agents said.
[21250039] |The association issued an advisory to its 1,685 member agencies following a report from the Foreign Ministry that picture-taking by Japanese tourists in earthquake-stricken areas was causing ill feeling among local residents. . . .
[21250040] |Tass said Lenin's tomb in Red Square will be closed from Nov. 10 to Jan. 15 for essential maintenance.
[21250041] |The red granite mausoleum draws thousands of visitors daily.

[21251001] |Fatalities on rural interstates rose 33% between 1986 and last year, the National Highway Traffic Safety Administration said in a report on the impact of the 65 miles-per-hour speed limit on those roads.

[21251002] |The report to Congress said that fatalities rose 18% in 1987 and 13% in 1988 on rural interstates.
[21251003] |The 1987 highway bill permitted states to raise the speed limit to 65 mph from 55 mph on interstate roads, which are defined as highways that pass through areas with fewer than 50,000 people.
[21251004] |Since 1987, 40 states have increased the speed limit on rural interstates.

[21251005] |"About one-third of the fatality increase is attributed to greater travel, and about two-thirds is attributed to other factors {primarily to greater speed}," according to NHTSA.

[21251006] |The report showed that deaths on urban interstate highways rose 7% between 1986 and last year, while fatalities on non-interstate roads were about the same in 1988 as in 1986.

[21251007] |In states that raised the speed limit on rural interstates, the fatality rate rose about 18% to 1.7 deaths per 100 million miles traveled between 1986 and 1988.
[21251008] |In contrast, the fatality rate in the states that retained the 55 mph limit was 0.9 last year, the same as in 1986.

[21252001] |Well-Seasoned Reasoning

[21252002] |("Food manufacturer changes spelling of `catsup' to `ketchup,' saying that's the spelling people now prefer."
[21252003] |-- WSJ Business Bulletin)

[21252004] |Public preference is important, So product names should match up, And firms that find they're lagging behind Should now take steps to ketchup!

[21252005] |-- George O. Ludcke.

[21252006] |Judge Not

[21252007] |How easy it is To attack others' views Without ever setting A foot in their shoes!

[21252008] |-- G. Sterling Leiby.

[21252009] |Daffynition

[21252010] |Money-making course: wad-working.

[21252011] |-- Thomas Henry.

[21253001] |In an Oct. 10 editorial-page article, "It's the World Bank's Turn to Adjust," Paul Craig Roberts lays most of the blame for what ails developing countries at the doorstep of the World Bank.
[21253002] |The article is, unfortunately, replete with outrageous distortions.

[21253003] |One of Mr. Roberts's observations is that the Bank's own loan portfolio is in deep trouble because of its lending to developing countries.
[21253004] |This is just not so.
[21253005] |The reality is that Bank finances are rock solid.
[21253006] |As of June 30, 1989 -- the day our past fiscal year came to a close -- only 4.1% of the Bank's portfolio was affected by arrears of over six months.
[21253007] |This is an enviably low level.
[21253008] |Moreover, the Bank follows a prudent provisioning policy and has set aside $800 million against possible loan losses.
[21253009] |For the same fiscal year, by the way, the Bank's net income was a robust $1.1 billion after provisions.

[21253010] |Because of the business-like manner in which the Bank goes about development, financial markets have confidence in it.
[21253011] |This helps explain the triple-A rating enjoyed by our bonds and our ability to borrow $9.3 billion in fiscal 1989 on the most advantageous terms.

[21253012] |Another of Mr. Roberts's criticisms is that Bank lending has done more harm than good "by implanting the wrong incentives and deflecting energy away from economic development."
[21253013] |Here, too, Mr. Roberts is way off the mark.
[21253014] |The reality is that Bank loans have been linked to policy improvements for 40 years.
[21253015] |Our traditional project loans have, for instance, supported sensible energy pricing in the power sector, sound interest-rate policies in the credit area and the operation of public utilities as efficient, autonomous agencies.
[21253016] |By and large, these efforts have borne fruit.
[21253017] |In my home region, Latin America, much of the existing infrastructure base -- an important building block for development -- has been financed by the World Bank.

[21253018] |Mr. Roberts also takes a swipe at the Bank's adjustment lending.
[21253019] |What are the facts on this type of lending?
[21253020] |The Bank has been making adjustment loans for 10 years.
[21253021] |As their name implies, these operations are linked to far-reaching policy reforms that aim at helping borrowing countries get back on the growth path and at enhancing their credit-worthiness.
[21253022] |Typically, these measures include reforms to downsize the role of government and parastatals in the economy, to open up inward-looking economies to international competition and to promote the development of a vigorous private sector.

[21253023] |Support for the private sector has been a longstanding concern of the Bank's.
[21253024] |Over the years, it has helped encourage investments by entrepreneurs in the Third World through its extensive credit operations and through loans and investments by the International Finance Corp.
[21253025] |Most recently, the Bank Group has been expanded to include the Multilateral Investment Guarantee Agency to stimulate direct foreign investment in developing countries by offering guarantees against noncommercial risk and advice to member countries on how to improve their business climate.

[21253026] |These are not the actions of a development agency wed to central planning and to the concentration of investment decisions in the hands of government, as Mr. Roberts alleges.
[21253027] |Rather, they reflect the Bank's time-tested, pragmatic approach, which aims at ensuring that developing countries put their scarce resources to the best possible use.

[21253028] |Francisco Aguirre-Sacasa Director, External Affairs The World Bank

[21254001] |The government said it would streamline its enormous and often-criticized food marketing and distribution network, Compania Nacional de Subsistencias Populares, or Conasupo.

[21254002] |Conasupo Director Ignacio Ovalle Fernandez said the agency will sell 589 midsized supermarkets and several food-production plants and warehouses beginning early next year.
[21254003] |The agency will withdraw from the production of nine food products, maintaining production of the two most important ones, corn and milk.
[21254004] |Mr. Ovalle also said Conasupo will cut back subsidies to producers of nonessential farm products and close retail outlets in wealthy neighborhoods.

[21254005] |The agency's workers and private companies would be allowed to bid for the assets up for sale.

[21254006] |Conasupo controls prices on agricultural goods and operates retail outlets where basic consumer items are sold at state-subsidized prices.
[21254007] |Business leaders have long criticized the agency as a leading example of bureacratic waste.

[21254008] |Private-sector leaders praised the Conasupo restructuring.
[21254009] |But most economists doubt the streamlining would cut deeply into Conasupo government subsidy, which largely goes to reduce consumer prices for corn and milk.

[21255001] |The Food and Drug Administration banned all imports of mushrooms from China in response to a rash of food-poisoning outbreaks linked to canned Chinese mushrooms.

[21255002] |"The agency has concluded that contamination may be widespread throughout the mushroom-processing industry in China," an FDA spokesman said yesterday.
[21255003] |The agency won't allow mushrooms that were canned or packed in brine at any Chinese plant to enter the U.S. until "satisfactory sanitation-control measures are implemented in China to prevent" bacterial contamination.

[21255004] |On May 19, the FDA began detaining Chinese mushrooms in 68-ounce cans after more than 100 people in Mississippi, New York and Pennsylvania became ill from eating tainted mushrooms.
[21255005] |In subsequent tests, the agency found smaller-size cans from several Chinese plants to be similarly contaminated.

[21255006] |The outbreaks were traced to staphylococcus aureus, a type of bacteria that produces a toxin capable of surviving the high temperatures used in canning vegetables.
[21255007] |A recall of the mushrooms blamed for the food poisoning began in early March.

[21255008] |In 1987, China exported 65 million pounds of mushrooms, valued at $47 million, to the U.S.
[21255009] |The shipments went mostly to food-service distributors that supply pizzerias and restaurants.

[21255010] |A spokesman for the Chinese Embassy here said that the Beijing government has taken "many effective measures" to stop the mushroom contamination and is further investigating the underlying causes.
[21255011] |He predicted the problem will be solved "very soon."

[21256001] |Your Sept. 26 "Politics & Policy" article about William Bennett's Emergency Drug Plan for Washington gives the impression that the FBI has not been nor is actively involved.
[21256002] |This is not the case.

[21256003] |The FBI is very supportive of and an active participant in Mr. Bennett's initiative.
[21256004] |It was agreed at the outset of the Washington Drug Initiative that the FBI's role would be to continue targeting the major drug traffickers through our National Drug Strategy.
[21256005] |Through these investigations we do not focus on the street drug user, but rather we target and attack major drug-trafficking organizations that control a large segment of the drug market.
[21256006] |The trial of Raful Edmond III in Washington serves to highlight our efforts in this area and the results achieved through our excellent working relationship with the Drug Enforcement Administration and the Metropolitan Police Department (MPD).

[21256007] |The FBI's role is to complement the D.C. initiative through not only these major trafficking investigations, but also by providing a full range of services through various task forces and our contacts with local police squads handling drug-related crimes.
[21256008] |In fact, we have agents assigned full time to assist the MPD in drug-related crimes such as homicide and other crimes of violence.

[21256009] |Milt Ahlerich Assistant Director Office of Public Affairs Federal Bureau of Investigation

[21257001] |Ramada Inc. revised the terms of its restructuring and extended to Feb. 28, 1990, the deadline to complete the sale of its hotel business to New World Development Co. of Hong Kong and Prime Motor Inns Inc. of Fairfield, N.J.

[21257002] |Ramada's previous plan was derailed by upheaval in the junk-bond market that hindered the offering of $400 million in high-yield securities of Aztar Corp., the new company that will operate Ramada's casinos in Nevada and Atlantic City,

[21257003] |Under the new terms, New World will still pay $540 million for Ramada's hotel business, subject to adjustment at closing, but Ramada will now reimburse New World for $10 million in expenses.
[21257004] |Prime will still manage Ramada's domestic franchise system when the sale closes.

[21257005] |Revised terms call for each Ramada common share to be exchanged for $1 in cash, subject to possible reduction, and one share of Aztar common stock.
[21257006] |Shareholders will also receive one cent per share for the redemption of preferred stock purchase rights.

[21257007] |The cash payout will be reduced by 40% of any amount by which the weighted mean price of Ramada's common stock exceeds $14 on the day the transaction closes.
[21257008] |The provision will help provide for tax liabilities that may stem from the restructuring.

[21257009] |Ramada's stock rose 87.5 cents on the news to close at $11.25 in composite New York Stock Exchange trading.
[21257010] |The announcement dispelled some Wall Street observers' fears that New World might demand a huge premium for the delay, or scrap the deal entirely.
[21257011] |The previous deadline to complete the sale was Nov. 30.

[21257012] |One major advantage of the revised plan is that Aztar will have far less debt than under the old terms.
[21257013] |"They'll go from being one of the most leveraged to one of the least leveraged casino companies," said Daniel Lee, an analyst with Drexel Burnham Lambert Inc.
[21257014] |Mr. Lee values the package at between $15 and $20 a share, based on current trading prices of other casino-company stocks.

[21257015] |The much-revised restructuring, which was first announced in October 1988, must again be approved by shareholders and state casino regulators in Nevada and New Jersey.
[21257016] |Financing plans include raising $170 million in debt secured by the company's holdings in New Jersey.

[21257017] |In May, Ramada sold its Marie Callender Pie Shops Inc. unit to a group of private investors as part of its plan to focus on its casinos in Atlantic City and in Las Vegas and Laughlin, Nev.

[21258001] |Bond prices took the high road and stock prices took the low road as worries mounted about the economy and the junk bond market.

[21258002] |The Dow Jones Industrial Average fell 26.23 points to 2662.91 in sluggish trading.
[21258003] |But long-term Treasury bonds staged a modest rally, with prices on most issues rising about half a point, or $5 for each $1,000 face amount.
[21258004] |The dollar sagged against other major currencies in lethargic trading.

[21258005] |Traders and analysts said the divergence between the stock and bond markets is a sign of growing unease about the economic outlook.
[21258006] |A sinking economy depresses corporate earnings and thus stock prices, but it buoys bond prices as interest rates fall.

[21258007] |That unease is expected to grow today when the government reports on September durable goods orders and again Thursday when the first assessment of third-quarter economic growth is released.
[21258008] |Analysts say they think durable goods orders fell about 1%, compared with a 3.9% gain in August, and that growth in the third quarter slowed to about 2.3% from the second quarter's 2.5%.

[21258009] |The stock market's decline, coming after a record weekly gain of 119.88 points, surprised some investors.
[21258010] |But A.C. Moore, director of research at Argus Research, said last week's rally was a reflex reaction to the Oct. 13 stock market rout.
[21258011] |Overall, he said, the trend in stock prices will be down as the economy weakens.

[21258012] |"We think we're on target in looking for renewed economic deterioration," he said.
[21258013] |"Corporate profits are going to decrease faster than interest rates will fall, and the probability is that we'll see negative economic growth in the fourth quarter."

[21258014] |Hugh Johnson, chief investment officer at First Albany Corp., agreed that a deteriorating economy is worrisome, but he said the real concern among stock investors is that some new problem will crop up in the junk bond market.

[21258015] |In major market activity: Stock prices slumped in sluggish trading.
[21258016] |Volume on the New York Stock Exchange totaled 135.9 million shares.
[21258017] |Declining issues on the Big Board were ahead of gainers, 1,012 to 501.

[21258018] |Bond prices rallied.
[21258019] |The yield on the Treasury's benchmark 30-year bond slipped to 7.93%.

[21258020] |The dollar weakened against most other major currencies.
[21258021] |In late New York trading, the dollar was quoted at 1.8470 marks and 141.90 yen, compared with 1.8578 marks and 142.43 yen late Friday.

[21259001] |The Wall Street Journal "American Way of Buying" Survey consists of two separate, door-to-door nationwide polls conducted for the Journal by Peter D. Hart Research Associates and the Roper Organization.
[21259002] |The two surveys, which asked different questions, were conducted using national random probability samples.

[21259003] |The poll conducted by Peter D. Hart Research Associates interviewed 2,064 adults age 18 and older from June 15 to June 30, 1989.
[21259004] |The poll conducted by the Roper Organization interviewed 2,002 adults age 18 and older from July 7 to July 15, 1989.
[21259005] |Responses were weighted on the basis of age and gender to conform with U.S. Census data.

[21259006] |For each poll, the odds are 19 out of 20 that if pollsters had sought to survey every household in the U.S. using the same questionnaire, the findings would differ from these poll results by no more than 2 1/2 percentage points in either direction.
[21259007] |The margin of error for subgroups -- for example, married women with children at home -- would be larger.
[21259008] |In addition, in any survey, there is always the chance that other factors such as question wording could introduce errors into the findings.

[21259009] |(See related story: "The American Way of Buying: Is Buying a Car a Choice or a Chore? --

[21260001] |Ironically, American Airlines' attempt to lead industry prices higher was reported in the same issue as your survey showing that consumers had the least confidence in the airline industry (Sept. 20).
[21260002] |You quote Robert Crandall, chairman of American's parent, AMR Corp., as having said that discount deals for big customers would be "dumb" because "you will go to Detroit because you have to go to Detroit whether the fare is $175, $275 or $375."

[21260003] |Even if Mr. Crandall is correct, he of all people must realize our society relies on competition to keep prices at a competitive level.
[21260004] |In 1986, he settled an antitrust suit based on a taped telephone conversation of him proposing to Braniff's president that they both raise fares 20%.
[21260005] |(Braniff declined).
[21260006] |When I asked American Airlines for its side of the story for use in my MBA class, where I teach business ethics, it did not respond.
[21260007] |Perhaps the ethics of an industry's leader filters down and is one of the factors that ultimately shapes consumer trust in that industry.

[21260008] |Arnold Celnicker Assistant Professor Ohio State University

[21261001] |Meredith Corp. is launching a new service to offer advertisers package deals combining its book, magazine and videocassette products.

[21261002] |The Des Moines-based publisher said it created a new Custom Marketing Group that will offer advertisers special rates for combination packages in its magazines, such as Ladies Home Journal and Better Homes and Gardens.
[21261003] |In addition, the group will create custom-designed media such as cookbooks, newspaper inserts and videos for ad campaigns.

[21261004] |Earlier this year, Meredith sold its first such package for $3 million to Kraft Inc., now a unit of New York-based Philip Morris Cos.
[21261005] |The Kraft package included a specially published cookbook, a national free-standing insert in Sunday newspapers, and a Kraft "advertorial" section that ran in five Meredith magazines.
[21261006] |Kraft recently agreed to spend an additional $3 million on similar programs through 1990.

[21261007] |Bill Murphy, director of the new marketing unit, said Meredith is negotiating other large-scale packages with leading companies in several product categories, but he wouldn't disclose their names.
[21261008] |Sources close to the company and ad agencies that work with Meredith said leading advertisers in consumer electronics, packaged goods and automotive products were among those negotiating ad packages with the Meredith group.

[21261009] |Other magazine publishing companies have been moving in the same direction.
[21261010] |The New York Times Co.'s Magazine Group earlier this year began offering advertisers extensive merchandising services built around buying ad pages in its Golf Digest magazine.
[21261011] |Time Warner Inc. recently formed a "synergy department" to seek out ways to offer advertisers packages that could combine Time's magazines with Warner products such as videocassettes.

[21261012] |Paul DuCharme, director of media services at Grey Advertising, said Meredith is the leader in providing multimedia packages.
[21261013] |"They may get passed up later when other publishers get their acts together, but for now they are the quickest offering the most extensive plan," he said.

[21261014] |Mr. Murphy of Meredith said one advertiser, which he wouldn't identify, wants Meredith to provide ad pages in seven Meredith magazines, publish an interior-decorating book that will be distributed at point of purchase, give away a videotape on installation pointers, and possibly use Meredith's Better Homes and Gardens' residential real-estate agents to distribute discount-coupon books to new homeowners.

[21261015] |"Five years ago, magazine publishers would simply bid on an advertiser's big ad schedule for their magazine," said Mr. Murphy.
[21261016] |"But the marketplace changed.
[21261017] |Advertisers now say `Help us improve our image and extend our selling season.'
[21261018] |They are coming to publishers looking for ideas.

[21262001] |Your Sept. 21 article "It's So Easy to Get Burned When Buying a Small Firm" was excellent.
[21262002] |I've been advising small businesses many years and have lived with the fact that 50% will go out of business within two years, and 80% in five years.

[21262003] |The economic loss, jobs lost, anguish, frustration and humiliation are beyond measure.
[21262004] |And most of these are absolutely unnecessary.
[21262005] |Your article points out the traps people fall into, but when reviewing those traps one sees just about all of them could have been avoided.
[21262006] |An accountant did not review the seller's books before buying a business.
[21262007] |"I guess I was naive," he said.
[21262008] |There is a more descriptive word to describe his lapse of common sense.

[21262009] |Corporate managers who want to start their own business are the highest failure risks.
[21262010] |They know all the answers and are not used to working more than 40 hours a week.
[21262011] |The blue-collar worker who decides to start a business will listen and take advice.
[21262012] |His humility gives him a much better chance of success.

[21262013] |A few months ago your paper reported the results of a study to determine why Asians who arrive in this country without any money, and unable to speak English, become overnight successes.
[21262014] |Their "secret" is that they gather a small group of advisers around them, listen to what they have to say, prepare a business plan and they are on their way.
[21262015] |Successful American business owners do the same thing.
[21262016] |Unfortunately, they are in the minority.

[21262017] |Avoiding failure is easy.
[21262018] |It's unfortunate so many must learn the hard way.

[21262019] |Daniel B. Scully Tucson, Ariz.

[21263001] |The management turnover at Reebok International Ltd. continued with the resignation of company president C. Joseph LaBonte, who joined Reebok just two years ago.

[21263002] |Mr. LaBonte's departure follows by two months the resignation of Mark Goldston as senior vice president and chief marketing officer after only 11 months at Reebok.

[21263003] |The resignations by the two executives, considered hard-charging and abrasive by Reebok insiders, reflect a difference in style with Paul Fireman, chairman and chief executive, according to several former executives.
[21263004] |The two executives are among a number of outsiders recruited by Reebok in the past few years to help it make the transition from a small start-up company to a marketing giant with sales last year of $1.79 billion.

[21263005] |The changes come as Reebok, which grew rapidly in the mid-1980s but has seen its sales flatten of late, is seeking to regain momentum in the athletic-shoe business against rivals Nike Inc. and L.A. Gear Inc.

[21263006] |The departures, said Alice Ruth, an analyst at Montgomery Securities in San Francisco, should enable the company to focus on business issues instead of management differences.
[21263007] |"I think it's more an issue of style.
[21263008] |I would view it as a net positive.
[21263009] |The company can go about its business.
[21263010] |They're in the midst of a turnaround," she noted.

[21263011] |Earnings have rebounded in 1989 after a 20% decline last year.

[21263012] |A former executive agreed that the departures don't reflect major problems, adding: "If you see any company that grows as fast as Reebok did, it is going to have people coming and going."

[21263013] |Reebok said Mr. LaBonte will resume the presidency of Vantage Group Inc., a California-based venture capital firm that he founded in 1983.
[21263014] |Before that he was president and chief operating officer of Twentieth Century-Fox Film Corp.
[21263015] |Reebok added that Mr. Fireman will assume the title of president.

[21263016] |A spokesman said that neither Mr. Fireman nor Mr. LaBonte would be available for comment.
[21263017] |"We will not be commenting beyond the news release," the spokesman said.

[21263018] |Mr. Goldston, who had been president of Faberge Inc.'s Faberge U.S.A. division before joining Reebok in September 1988, left in August to pursue other interests.

[21264001] |Magazine publishers are facing spiraling costs and a glut of new titles.
[21264002] |But even a raft of recent failures isn't stopping them from launching new publications.

[21264003] |At the American Magazine Conference here, publishers are plenty worried about the industry's woes.
[21264004] |But they are also talking about new magazines.
[21264005] |For example, Toronto-based Telemedia Inc. will publish Eating Well, a new food and health magazine due out next summer.
[21264006] |New York-based Hearst Corp. this fall plans to publish its first issue of 9 Months, a magazine for expectant mothers, and has already launched American Home.
[21264007] |And Time Warner Inc. is developing a spinoff of Time magazine aimed at kids, on the heels of its successful Sports Illustrated for Kids.

[21264008] |Over the past four years, the number of consumer magazines has increased by an average of 80 magazines annually, according to Donald Kummerfeld, president of the Magazine Publishers of America.
[21264009] |"This is an impressive show of faith in the future of the magazine industry," said Mr. Kummerfeld.
[21264010] |"Entrepreneurs don't rush to get into a stagnant or declining industry."

[21264011] |And despite the recent tough advertising climate, industry figures released at the meeting here indicate things may be turning around.
[21264012] |For the first nine months, advertising pages in consumer magazines tracked by the Publishers Information Bureau increased 4% from the same period last year, to 125,849 pages.
[21264013] |Total magazine ad revenue for the same period increased 12% to $4.6 billion.
[21264014] |Though for some magazines categories a tough advertising climate persists, the industry in general is doing well compared with the newspaper industry.

[21264015] |Though some magazines are thriving, the magazine publishing industry remains a risky business.
[21264016] |Within the same nine months, News Corp. closed down In Fashion, a once-promising young woman's fashion magazine, Drake Publications Inc. has folded the long-troubled Venture magazine, and Lang Communications has announced Ms. magazine, after 17 years, will no longer carry advertising as of January.
[21264017] |Lang is cutting costs and will attempt to operate the magazine with only subscription revenue.

[21264018] |Meanwhile, American Health Partners, publisher of American Health magazine, is deep in debt, and Owen Lipstein, founder and managing partner, is being forced to sell the magazine to Reader's Digest Association Inc.
[21264019] |Mr. Lipstein's absence from the meeting here raised speculation that the sale is in trouble.
[21264020] |Mr. Lipstein said in a telephone interview from New York that the sale was proceeding as planned.
[21264021] |"The magazine is strong.
[21264022] |It's simply the right time to do what we are doing," Mr. Lipstein said.

[21264023] |"Magazines can no longer be considered institutions," said James Autry, president of Meredith Corp.'s magazine group.
[21264024] |"Publishers will find that some magazines have served their purpose and should die," he added.
[21264025] |"Magazines could, like other brands, find that they have only a limited life."

[21264026] |There are also indications that the number of magazine entrepreneurs, traditionally depended upon to break new ground with potentially risky start-ups, are dwindling.
[21264027] |More than ever, independent magazines and small publishing groups are being gobbled up by larger publishing groups, such as American Express Publishing Corp., a unit of American Express Co., and Conde Nast Publications Inc., a unit of Advance Publications Inc., which are consolidating in order to gain leverage with advertisers.

[21264028] |Some entrepreneurs are still active, though.
[21264029] |Gerry Ritterman, president of New York-based Network Publishing Corp., earlier this year sold his Soap Opera Digest magazine to Rupert Murdoch's News Corp.
[21264030] |Mr. Ritterman said that in the next six months he will take $50 million from the Soap Opera Digest sale to acquire new magazines.
[21264031] |He would not reveal which magazines he is considering.

[21264032] |"The magazines I am looking for are underdeveloped," said Mr. Ritterman.
[21264033] |"They could be old or new, but they are magazines whose editorial quality needs to be improved.
[21264034] |They will be the next hot magazines.

[21265001] |MCA Inc. said its toy-making unit agreed to buy Buddy L Corp., producer of a line of toy vehicles and preschool products.

[21265002] |The price wasn't disclosed, but an executive of LJN Toys Ltd., the MCA unit, said the closely held Buddy L had annual sales in excess of $20 million.
[21265003] |The 40-year-old Buddy L concern, based in New York, designs and develops toys under the names "Buddy L" and "My First Buddy," he said.

[21265004] |MCA said it expects the proposed transaction to be completed "no later than Nov. 10.

[21266001] |(During its centennial year, The Wall Street Journal will report events of the past century that stand as milestones of American business history.)

[21266002] |FRANKLIN NATIONAL BANK DIED at 3 p.m. EDT, Oct. 8, 1974, and was promptly resurrected under new owners to shore up confidence in other banks during a recession.

[21266003] |Arthur Burns, Federal Reserve Board chairman, said the government's "luck" in keeping the bank open -- despite being the then-biggest U.S. bank failure -- prevented "shock waves around the country and around the world."
[21266004] |Federal officials who had been probing the bank for months arranged a merger with European-American Bank & Trust, owned by six foreign banks, to avert the closedown.
[21266005] |And federal insurance protected the bank's 631,163 depositors.

[21266006] |The crisis had peaked on May 10, 1974, when the bank disclosed "severe" foreign-exchange losses due to "unauthorized" trading.
[21266007] |Massive withdrawals followed and there was a brief rescue attempt, with political undertones, including $1.77 billion in Federal Reserve loans.

[21266008] |Within six years many figures were convicted for their illegal abuse of Franklin funds.
[21266009] |In June 1980, Michele Sindona -- an Italian financier who in July 1972 had bought a 22% block of Franklin's stock from Loews Corp., headed by Laurence A. Tisch -- was sentenced to 25 years in prison after being convicted of fraud and perjury.
[21266010] |Included was the charge that Sindona siphoned $45 million of Franklin funds for his other ventures.
[21266011] |(Sindona in 1979 faked his "kidnapping" for 2 1/2 months to delay his trial.)

[21266012] |During 1976 to 1979, other former Franklin officials either pleaded guilty to or were found guilty of violations including phony transactions to hide the bank's losses.

[21266013] |Sindona, the onetime Vatican financial adviser with reported links to the Mafia, died on March 22, 1986, at age 65, reportedly after drinking cyanide-laced coffee in an Italian prison.
[21266014] |It happened four days after he was sentenced to life in prison for ordering a 1979 murder.
[21266015] |Italian magistrates labeled his death a suicide.

[21267001] |In a nondescript office building south of Los Angeles, human behavior is being monitored, dissected and, ultimately, manipulated.

[21267002] |A squiggly line snakes across a video screen, gyrating erratically as subjects with hand-held computers register their second-by-second reactions to a speaker's remarks.
[21267003] |Agreement, disapproval, boredom and distraction all can be inferred from the subjects' twist of a dial.
[21267004] |In another experiment, an elaborate chart with color codes reveals how people's opinions were shaped -- and how they can be reshaped.

[21267005] |Donald Vinson, who oversees the experiments, isn't some white-coated researcher.
[21267006] |He heads Litigation Sciences Inc., the nation's largest legal consulting firm, which is helping corporate America prepare for high-stakes litigation by predicting and shaping jurors' reactions.
[21267007] |In the process, Litigation Sciences is quietly but inexorably reshaping the world of law.

[21267008] |Little known outside the legal world but a powerhouse within, Litigation Sciences, a unit of Saatchi & Saatchi PLC, employs more than 100 psychologists, sociologists, marketers, graphic artists and technicians.
[21267009] |Twenty-one of its workers are Ph. D.s.
[21267010] |Among other services, the firm provides pre-trial opinion polls, creates profiles of "ideal" jurors, sets up mock trials and "shadow" juries, coaches lawyers and witnesses, and designs courtroom graphics.

[21267011] |Much like their cohorts in political consulting and product marketing, the litigation advisers encourage their clients to play down complex or ambiguous matters, simplify their messages and provide their target audiences with a psychological craving to make the desired choice.
[21267012] |With jury verdicts getting bigger all the time, companies are increasingly willing to pay huge sums for such advice.

[21267013] |Recently, Litigation Sciences helped Pennzoil Co. win a $10.5 billion jury verdict against Texaco Inc.
[21267014] |It advised the National Football League in its largely successful defense of antitrust charges by the United States Football League.
[21267015] |And it helped win defense verdicts in product-liability suits involving scores of products, ranging from Firestone 500 tires to the anti-nausea drug Bendectin.
[21267016] |Largely as a result, Litigation Sciences has more than doubled in size in the past two years.
[21267017] |Its 1988 revenue was $25 million.

[21267018] |Meanwhile, competitors are being spawned almost daily; some 300 new businesses -- many just one-person shops -- have sprung up.
[21267019] |Mr. Vinson estimates the industry's total revenues approach $200 million.
[21267020] |In any high-stakes case, you can be sure that one side or the other -- or even both -- is using litigation consultants.

[21267021] |Despite their ubiquity, the consultants aren't entirely welcome.
[21267022] |Some lawyers and scholars see the social scientists' vision of the American jury system as a far cry from the ideal presented in civics texts and memorialized on the movie screen.
[21267023] |In the film classic "Twelve Angry Men," the crucible of deliberations unmasks each juror's bias and purges it from playing a role in the verdict.
[21267024] |After hours of conflict and debate, that jury focuses on the facts with near-perfect objectivity.
[21267025] |In real life, jurors may not always work that way, but some court observers question why they shouldn't be encouraged to do so rather than be programmed not to.

[21267026] |Litigation consulting is, as New York trial attorney Donald Zoeller puts it, "highly manipulative."
[21267027] |He adds, "The notion they try to sell is that juries don't make decisions rationally.
[21267028] |But the effort is also being made to try and cause jurors not to decide things rationally.
[21267029] |I find it troubling."
[21267030] |But Mr. Zoeller also acknowledges that consultants can be very effective.
[21267031] |"It's gotten to the point where if the case is large enough, it's almost malpractice not to use them," he says.

[21267032] |Others complain that the consultants' growing influence exacerbates the advantage of litigants wealthy enough to afford such pricey services.
[21267033] |"The affluent people and the corporations can buy it, the poor radicals {in political cases} get it free, and everybody in between is at a disadvantage, and that's not the kind of system we want," says Amitai Etzioni, a prominent sociologist who teaches at George Washington University.

[21267034] |Sophisticated trial consulting grew, ironically, from the radical political movements of the 1960s and 1970s before finding its more lucrative calling in big commercial cases.
[21267035] |The Harrisburg 7 trial in 1972, in which Daniel Berrigan and others were charged with plotting anti-war-related violence, was a landmark.

[21267036] |In that case, a group of left-leaning sociologists interviewed 252 registered voters around Harrisburg.
[21267037] |The researchers discovered that Episcopalians, Presbyterians, Methodists and fundamantalist Protestants were nearly always against the defendants; the lawyers resolved to try to keep them off the jury.

[21267038] |The defense also learned that college-educated people were uncharacteristically conservative about the Vietnam War.
[21267039] |A more blue-collar panel became a second aim.
[21267040] |Ultimately, that carefully picked jury deadlocked with a 10-2 vote to acquit, and the prosecution decided not to retry the case.
[21267041] |Litigation consulting had arrived.

[21267042] |The fledgling science went corporate in 1977 when International Business Machines Corp. hired a marketing professor to help defend a complex antitrust case.
[21267043] |The problem for IBM trial lawyers Thomas Barr and David Boies was how to make such a highly technical case understandable.
[21267044] |As the trial progressed, they were eager to know if the jury was keeping up with them.

[21267045] |The solution devised by the professor was to hire six people who would mirror the actual jury demographically, sit in on the trial and report their reactions to him.
[21267046] |He then briefed Messrs. Boies and Barr, who had the chance to tilt their next day's presentation accordingly.
[21267047] |Thus, the "shadow" jury was born.
[21267048] |Mr. Vinson, the professor, got the law bug and formed Litigation Sciences.
[21267049] |(IBM won the case.)

[21267050] |"The hardest thing in any complex case is to retain objectivity and, in some sense, your ignorance," says Mr. Boies of Cravath, Swaine & Moore.
[21267051] |"What you look for in a shadow jury is very much what you do when you give an opening argument to your wife or a friend and get some response to it.
[21267052] |A shadow jury is a way to do that in a more systematic and organized way."

[21267053] |The approach worked well in the recent antitrust case in which Energy Transportation Systems Inc. sued Santa Fe Pacific Corp. over the transport of semi-liquefied coal -- the kind of case likely to make almost anyone's eyes glaze over.

[21267054] |Energy Transportation retained Litigation Sciences, at a cost of several hundred thousand dollars, to poll, pre-try, profile and shadow.
[21267055] |Just before the actual closing arguments, the firm put the case to a vote of the five shadow jurors, each of whom was being paid $150 a day.
[21267056] |The jurors, who didn't know which side had retained them, decided for Energy Transportation, and awarded $500 million in damages.
[21267057] |The real jury returned days later with a $345 million victory for Energy Transportation.

[21267058] |"It's just like weather forecasting," says Energy Transportation trial attorney Harry Reasoner of Vinson & Elkins.
[21267059] |"It's often wrong, but it's better than consulting an Indian rain dancer."

[21267060] |Forecasting is only one part of Litigation Sciences' work.
[21267061] |Changing the outcome of the trial is what really matters.
[21267062] |And to the uninitiated, some of the firm's approaches may seem chillingly manipulative.

[21267063] |Theoretically, jurors are supposed to weigh the evidence in a case logically and objectively.
[21267064] |Instead, Mr. Vinson says, interviews with thousands of jurors reveal that they start with firmly entrenched attitudes and try to shoe-horn the facts of the case to fit their views.

[21267065] |Pre-trial polling helps the consultants develop a profile of the right type of juror.
[21267066] |If it is a case in which the client seeks punitive damages, for example, depressed, underemployed people are far more likely to grant them.
[21267067] |Someone with a master's degree in classical arts who works in a deli would be ideal, Litigation Sciences advises.
[21267068] |So would someone recently divorced or widowed.
[21267069] |(Since Litigation Sciences generally represents the defense, its job is usually to help the lawyers identify and remove such people from the jury.)

[21267070] |For personal-injury cases, Litigation Sciences seeks defense jurors who believe that most people, including victims, get what they deserve.
[21267071] |Such people also typically hold negative attitudes toward the physically handicapped, the poor, blacks and women.
[21267072] |The consultants help the defense lawyers find such jurors by asking questions about potential jurors' attitudes toward volunteer work, or toward particular movies or books.

[21267073] |Litigation Sciences doesn't make moral distinctions.
[21267074] |If a client needs prejudiced jurors, the firm will help find them.
[21267075] |As Mr. Vinson explains it, "We don't control the facts.
[21267076] |They are what they are.
[21267077] |But any lawyer will select the facts and the strategy to employ.
[21267078] |In our system of advocacy, the trial lawyer is duty bound to present the best case he possibly can."

[21267079] |Once a jury is selected, the consultants often continue to determine what the jurors' attitudes are likely to be and help shape the lawyers' presentation accordingly.
[21267080] |Logic plays a minimal role here.
[21267081] |More important are what LSI calls "psychological anchors" -- a few focal points calculated to appeal to the jury on a gut level.

[21267082] |In one personal-injury case, a woman claimed she had been injured when she slipped in a pool, but the fall didn't explain why one of her arms was discolored bluish.
[21267083] |By repeatedly drawing the jury's attention to the arm, the defense lawyers planted doubt about the origin of the woman's injuries.
[21267084] |The ploy worked.
[21267085] |The defense won.

[21267086] |In a classic defense of a personal-injury case, the consultants concentrate on encouraging the jury to shift the blame.
[21267087] |"The ideal defense in a case involving an accident is to persuade the jurors to hold the accident victim responsible for his or her plight," Mr. Vinson has written.

[21267088] |Slick graphics, pre-tested for effectiveness, also play a major role in Litigation Sciences' operation.
[21267089] |Studies show, the consultants say, that people absorb information better and remember it longer if they receive it visually.
[21267090] |Computer-generated videos help.
[21267091] |"The average American watches seven hours of TV a day.
[21267092] |They are very visually sophisticated," explains LSI graphics specialist Robert Seltzer.

[21267093] |Lawyers remain divided about whether anything is wrong with all this.
[21267094] |Supporters acknowledge that the process aims to manipulate, but they insist that the best trial lawyers have always employed similar tactics.
[21267095] |"They may not have been able to articulate it all, but they did it," says Stephen Gillers, a legal ethics expert at New York University law school.
[21267096] |"What you have here is intuition made manifest."

[21267097] |Many lawyers maintain that all's fair in the adversary system as long as no one tampers with the evidence.
[21267098] |Others point out that lawyers in small communities have always had a feel for public sentiment -- and used that to advantage.

[21267099] |Litigation consulting isn't a guarantee of a favorable outcome.
[21267100] |Litigation Sciences concedes that in one in 20 cases it was flatout wrong in its predictions.
[21267101] |A few attorneys offer horror stories of jobs botched by consultants or of overpriced services -- as when one lawyer paid a consultant (not at Litigation Sciences) $70,000 to interview a jury after a big trial and later read more informative interviews with the same jurors in The American Lawyer magazine.

[21267102] |Some litigators scoff at the notion that a sociologist knows more than they do about what makes a jury tick.
[21267103] |"The essence of being a trial lawyer is understanding how people of diverse backgrounds react to you and your presentation," says Barry Ostrager of Simpson Thacher & Bartlett, who recently won a huge case on behalf of insurers against Shell Oil Co.
[21267104] |He says he used consultants in the case but "found them to be virtually useless."

[21267105] |But most lawyers accept that the marketplace has spoken.
[21267106] |And the question remains whether the jury system can maintain its integrity while undergoing such a skillful massage.
[21267107] |For more than a decade, Mr. Etzioni, the sociologist, has been a leading critic of the masseurs.
[21267108] |"There's no reason to believe that juries rule inappropriately," he says.
[21267109] |"But the last thing you want to do is manipulate the subconscious to make them think better.
[21267110] |What you then do is you make them think inappropriately."

[21267111] |To hamper the work of litigation scientists, he suggests that courts sharply limit the number of jurors that lawyers can remove from the jury panel through so-called peremptory challenges -- exclusions that don't require explanations.
[21267112] |In most civil cases, judges allow each side three such challenges.
[21267113] |For complex cases, judges sometimes allow many more.

[21267114] |Mr. Etzioni also suggests forbidding anyone from gathering background information about the jurors.
[21267115] |(Some courts release names and addresses, and researchers can drive by houses, look up credit ratings, and even question neighbors.)
[21267116] |Furthermore, he says, psychologists should not be allowed to analyze jurors' personalities.

[21267117] |Even some lawyers who have used consultants to their advantage see a need to limit their impact.
[21267118] |Mr. Boies, the first lawyer to use Mr. Vinson's services, cautions against courts' allowing extensive jury questioning (known as voir dire) or giving out personal information about the jurors.
[21267119] |"The more extensive the voir dire, the easier you make it for that kind of research to be effective, and I don't think courts should lend themselves to that," Mr. Boies says.

[21268001] |Silicon Graphics Inc., a fast-growing maker of computer workstations, said it landed two federal government contracts worth more than $100 million over the next five years.

[21268002] |One award is part of a Department of Defense contract to Loral Rolm Mil-Spec Computers and could be valued at more than $100 million over five years.
[21268003] |The other involves the sale of about 35 of the company's high-end workstations to the National Institutes of Health.
[21268004] |The models, which cost about $75,000 each, will be used in research.

[21268005] |The awards are evidence that Silicon Graphics' approach to computer graphics is catching on with users of powerful desktop computers, analysts said.

[21268006] |"The company's on a roll," said Robert Herwick, an analyst at Hambrecht & Quist.
[21268007] |"No other {computer} vendor offers graphics performance that good for their price."

[21268008] |In the battle to supply desktop computers for researchers and design engineers, most of the attention is given to the biggest competitors: Sun Microsystems Inc., Hewlett-Packard Co. and Digital Equipment Corp., which make computers mainly aimed at a wide range of engineering and scientific needs.

[21268009] |Silicon Graphics, on the other hand, has targeted a specific niche since its inception in 1982, which has been dubbed by some as "motion-picture computing."
[21268010] |This is a style of "visual" computing that provides three-dimensional, color models of everything from the inside of a house to the latest in women's fashion.

[21268011] |Though Silicon Graphics is much smaller than Digital, Hewlett and Sun, it has emerged in recent years as a feared adversary in this graphics portion of the workstation market.

[21268012] |In addition, the company has made it tough on competitors by offering a stream of desktop computers at sharply lower prices.
[21268013] |A year ago, Silicon Graphics introduced a model priced at $15,000 -- almost as cheap as mainstream workstations that don't offer special graphics features.

[21268014] |Silicon Graphics also plans to unveil even less expensive machines in the near future.
[21268015] |"It's pretty safe to assume we can bring the cost down of these systems by 30% to 40% a year," said Edward McCracken, the company's chief executive officer.

[21268016] |Silicon Graphics' strategy seems to be paying off.
[21268017] |Revenue for its first quarter ended Sept. 30 was $86.4 million, a 95% increase over the year-ago period.
[21268018] |Profit was $5.2 million, compared with $1 million for the year-ago quarter.

[21269001] |Remember those bulky, thick-walled refrigerators of 30 years ago?
[21269002] |They, or at least something less efficient than today's thin-walled units, may soon be making a comeback.
[21269003] |That something, whatever it is, could add as much as $100 to the $600 or so consumers now pay for lower-priced refrigerators.

[21269004] |These and other expensive changes in products ranging from auto air conditioners to foam cushioning to commercial solvents are in prospect because of something called the Montreal Protocol, signed by 24 nations in 1987.
[21269005] |In one of the most sweeping environmental regulatory efforts to date -- involving products with an annual value of $135 billion in the U.S. alone -- the signatories agreed to curtail sharply the use of chlorofluorocarbons (CFCs).
[21269006] |World-wide production would be cut in half by 1998.
[21269007] |The U.S. Senate liked the treaty so well it ratified it by a vote of 89 to 0.
[21269008] |Not to be outdone, George Bush wants CFCs banished altogether by the year 2000, a goal endorsed at an 80-nation U.N. environmental meeting in Helsinki in the spring.

[21269009] |That's a lot of banishment, as it turns out.
[21269010] |CFCs are the primary ingredient in a gas, often referred to by the Du Pont trade name Freon, which is compressed to liquid form to serve as the cooling agent in refrigeration and air-conditioning equipment.
[21269011] |Gases containing CFCs are pumped into polyurethane to make the foam used in pillows, upholstery and insulation.
[21269012] |Polyurethane foam is a highly efficient insulator, which accounts for why the walls of refrigerators and freezers can be thinner now than they were back in the days when they were insulated with glass fiber.

[21269013] |But even though by some estimates it might cost the world as much as $100 billion between now and the year 2000 to convert to other coolants, foaming agents and solvents and to redesign equipment for these less efficient substitutes, the Montreal Protocol's legions of supporters say it is worth it.
[21269014] |They insist that CFCs are damaging the earth's stratospheric ozone layer, which screens out some of the sun's ultraviolet rays.
[21269015] |Hence, as they see it, if something isn't done earthlings will become ever more subject to sunburn and skin cancer.

[21269016] |Peter Teagan, a specialist in heat transfer, is running a project at Arthur D. Little Inc., of Cambridge, Mass., to find alternative technologies that will allow industry to eliminate CFCs.
[21269017] |In addition to his interest in ozone depletion he has extensively studied the related topic of global warming, a theory that mankind's generation of carbon dioxide through increased combustion of fossil fuels is creating a "greenhouse effect" that will work important climatic changes in the earth's atmosphere over time.

[21269018] |"I would be the first to admit that there is not a complete consensus in the scientific community on either one of these problems," says Mr. Teagan.
[21269019] |"In the kind of literature I read I come across countervailing opinions quite frequently.
[21269020] |But the nature of the problem is such that many others feel it has to be addressed soon, before all the evidence is in.
[21269021] |We can't afford to wait."

[21269022] |But does it have to be so soon?
[21269023] |Some atmospheric scientists think that even if CFCs were released into the atmosphere at an accelerating rate, the amount of ozone depletion would be only 10% by the middle of the next century.
[21269024] |It's easy to get something comparable by simply moving to a higher altitude in the U.S.

[21269025] |Moreover, there are questions, particularly among atmospheric scientists who know this subject best, about the ability of anyone to know what in fact is happening to the ozone layer.
[21269026] |It is generally agreed that when CFCs rise from earth to stratosphere, the chlorine in them is capable of interfering with the process through which ultraviolet rays split oxygen molecules and form ozone.
[21269027] |But ozone creation is a very large-scale natural process and the importance of human-generated CFCs in reducing it is largely a matter of conjecture.
[21269028] |The ozone layer is constantly in motion and thus very hard to measure.
[21269029] |What scientists have known since the late 1970s is that there is a hole in the layer over Antarctica that expands or contracts from year to year.
[21269030] |But it is at least worthy of some note that there are very few refrigerators in Antarctica.
[21269031] |Moreover, surely someone has noticed that household refrigerators are closed systems, running for many years without either the CFC gas or the insulation ever escaping.

[21269032] |Another argument of the environmentalists is that if substitutes are available, why not use them?
[21269033] |Mr. Teagan cites a list of substitutes but none, so far, match the nonflammable, nontoxic CFCs.
[21269034] |Butane and propane can be used as coolants, for example, but are flammable.
[21269035] |Moreover, new lubricants will be needed to protect compressors from the new formulations, which, as with CFCs, are solvents.
[21269036] |Mr. Teagan points out as well that if the equipment designed to get along without CFCs is less efficient than current devices, energy consumption will rise and that will worsen the greenhouse effect.
[21269037] |Folks in the Midwest who just suffered a mid-October snowstorm may wonder where the greenhouse was when they needed it, but let's not be flippant about grave risks.

[21269038] |As it happens, Arthur D. Little is not at all interested in throwing cold water on ozone depletion and global warming theories.
[21269039] |It is interested in making some money advising industry on how to convert to a world without CFCs.
[21269040] |There is, after all, big money in environmentalism.

[21269041] |Maybe we should ask why it was that Du Pont so quickly capitulated and issued a statement, giving it wide publicity, that it was withdrawing CFCs.
[21269042] |Freon, introduced in 1930, revolutionized America by making refrigeration and air conditioning practical after all.
[21269043] |One answer is that big companies are growing weary of fighting environmental movements and are trying instead to cash in on them, although they never care to put it quite that way.
[21269044] |Du Pont, as it happens, has a potential substitute for CFCs.
[21269045] |Imperial Chemical Industries of the U.K. also has one, and is building a plant in Louisiana to produce it.
[21269046] |Japanese chemical companies are at work developing their own substitutes and hoping to conquer new markets, of course.

[21269047] |There are still others who don't mind seeing new crises arise.
[21269048] |Environmental groups would soon go out of business were they not able to send out mailings describing the latest threat and asking for money to fight it.
[21269049] |University professors and consultants with scientific credentials saw a huge market for their services evaporate when price decontrol destroyed the energy crisis and thus the demand for "alternative energy."
[21269050] |They needed new crises to generate new grants and contracts.

[21269051] |In other words, environmentalism has created a whole set of vested interests that fare better when there are many problems than when there are few.
[21269052] |That tends to tilt the public debate toward "solutions" even when some of the most knowledgeable scientists are skeptical about the seriousness of the threats and the insistence of urgency.
[21269053] |There is an element of make-work involved.

[21269054] |Consumers pay the bill for all this in the price of a refrigerator or an air-conditioned car.
[21269055] |If they were really getting insurance against environmental disaster, the price would be cheap.
[21269056] |But if there is no impending threat, it can get to be very expensive.

[21270001] |but worries about 1990.

[21270002] |With most legislatures adjourned for the year, small business is tallying its scorecard.
[21270003] |Much of its attention was spent fighting organized labor's initiatives on issues the small-business community traditionally opposes -- from raising state minimum wage levels to mandating benefits in health plans.
[21270004] |While results were mixed in many states, "small business got by fairly well," concludes Don L. Robinson, associate director of the National Federation of Independent Business, the largest small-business organization.

[21270005] |Five states -- Oregon, Rhode Island, New Hampshire, Iowa and Wisconsin -- passed bills to boost the minimum wage, but measures in 19 other states were defeated.
[21270006] |Oregon's rate will rise to $4.75 an hour, the nation's highest, in Jan. 1, 1991.
[21270007] |Iowa's will be the second highest -- at $4.65 an hour in January 1992 -- but small-business lobbyists won an exclusion for tiny concerns and a lower training rate.

[21270008] |In 17 central states, one small-business count shows lawmakers adopted only three of 46 bills mandating health coverage or parental leave.
[21270009] |The Illinois Legislature narrowly passed a parental-leave bill, which Gov. James Thompson vetoed, and Iowa and Tennessee amended laws to require that employers pay for breast-cancer exams.

[21270010] |Small business is bracing for an avalanche of similar proposals next year.

[21270011] |"Those kinds of issues always keep coming back," says Robert Beckwith, who manages the Illinois Chamber of Commerce's small-business office.

[21270012] |DESPITE VICTORIES this year, small business fears losing parental-leave war.

[21270013] |Only two states -- Vermont and Washington -- this year joined five others requiring private employers to grant leaves of absence to employees with newborn or adopted infants.
[21270014] |Similar proposals were defeated in at least 15 other states.
[21270015] |But small business, which generally detests government-mandated benefits, has taken note of the growing number of close votes.
[21270016] |"It's just a matter of time before the tide turns," says one Midwestern lobbyist.

[21270017] |Consequently, small business is taking more "pro-active" steps to counter mandated leaves.
[21270018] |In Pennsylvania, small businesses are pushing for a voluntary alternative; they favor a commission that would develop sample leave policies that employers could adopt.
[21270019] |They also support a tax credit for employers to offset the cost of hiring and training workers who temporarily replace employees on parental leave.

[21270020] |In 1990, the issue is expected to be especially close in Alaska, California, Michigan, New York, Pennsylvania and Illinois.

[21270021] |"We'll be playing a lot of defense, especially in the Midwest and Northeast," says Jim Buente of the NFIB.

[21270022] |IN LOS ANGELES, more small businesses ponder adopting a child-care policy.

[21270023] |Triggering the re-examination is a recent city council decision to give preference in letting city contracts to suppliers with a stated policy on child care for their employees.
[21270024] |The preferential treatment even applies to awarding small contracts under $25,000 and consulting and temporary services -- which often go to the smaller concerns.
[21270025] |Firms are permitted wide flexibility in the child-care arrangements they provide.
[21270026] |Council member Joy Picus, the measure's chief advocate, considers it part of a "pro-family policy" that makes Los Angeles a leader in "humanizing the workplace."

[21270027] |NOVEMBER BALLOTS will contain few referendum or initiative issues that especially affect small business.
[21270028] |In San Francisco, small businesses are urging passage of a local initiative to build a new $95 million downtown baseball stadium; they believe it will spur retail sales and hotel-restaurant business.
[21270029] |But in Washington state, small business generally opposes an initiative to boost spending on children's programs by $360 million, fearing the state's 7.8% sales tax will be raised to finance the outlays.

[21270030] |DIALING DOLLARS:
[21270031] |Small businesses in suburban Chicago are discovering that an area-code switch Nov. 11 -- to 708 from the familiar 312 -- won't be without some costs as they alter stationery, among other things, and notify customers.
[21270032] |Wessels & Pautsch, a small St. Charles law firm, plans to mail 500 customers a list of its lawyers' new phone and fax numbers as well as updated Rolodex cards.
[21270033] |But many owners plan to practice frugality -- crossing out the old code and writing in the new one until their stock runs out.
[21270034] |Even print-shop operator Clay Smith of Naperville won't discard his old supply.
[21270035] |(He reports his business is up slightly from customers replacing old stock.)

[21270036] |CALIFORNIA, A TREND-SETTER in franchising rules, stirs a controversy.

[21270037] |With some new rules, state officials say they made it easier -- and faster -- to sell new franchises whose terms stray from those in state-registered contracts.
[21270038] |Previously, regulators insisted that franchisers pre-register such changes with the state -- a costly process taking at least six weeks.
[21270039] |Now some negotiated sales that meet a series of tests don't have to be pre-registered.
[21270040] |For instance, franchisers no longer must pre-register sales to aspiring franchisees who qualify as "sophisticated purchasers."
[21270041] |Such buyers must have a minimum net worth of $1 million, $200,000 annual income, or recent experience in the business area of the franchise being sold.

[21270042] |But critics consider the changes regressive.
[21270043] |Lewis G. Rudnick, a Chicago lawyer who represents franchisers, contends California is narrowly limiting -- rather than expanding -- opportunities for negotiating sales.
[21270044] |He argues California regulators historically have misinterpreted their law -- and he says negotiated sales that aren't pre-registered have been legal all along.

[21270045] |San Francisco lawyer Timothy H. Fine, who represents franchisees, insists California's cautiousness helps protect franchisees from crafty sales negotiators who push unlawful clauses.

[21270046] |SMALL TALK:
[21270047] |A new Maryland law frees store owners of liability if a customer trips or otherwise gets hurt on the way to the restroom. . . .
[21270048] |Only 4% of Missouri small businesses surveyed say they've tested an employee or applicant for drug or alcohol use. . . .
[21270049] |By 52%-36%, Tennessee NFIB members favor laws to limit foreign ownership of land and facilities in the state.

[21271001] |About 400,000 commuters trying to find their way through the Bay area's quake-torn transportation system wedged cheek-to-jowl into subways, sat in traffic jams on major freeways or waited forlornly for buses yesterday.

[21271002] |In other words, it was a better-than-average Manhattan commute.

[21271003] |City officials feared widespread gridlock on the first day that normal business operations were resumed following last Tuesday's earthquake.
[21271004] |The massive temblor, which killed at least 61 people, severed the Bay Bridge, a major artery to the east, and closed most ramps leading to and from Highway 101, the biggest artery to the south.
[21271005] |It will take several weeks to repair the bridge, and several months to repair some of the 101 connections.

[21271006] |But in spite of a wind-driven rainstorm, gridlock never materialized, mainly because the Bay Area Rapid Transit subway system carried 50% more passengers than normal.
[21271007] |For the first time in memory, it was standing-room only in BART's sleek, modern railcars.

[21271008] |Moreover, the two main bridges still connecting San Francisco with the East Bay didn't charge tolls, allowing traffic to zip through without stopping.
[21271009] |Officials also suspect that traffic benefited from steps by major employers to get workers to come in at odd hours, or that many workers are still staying at home.

[21271010] |Many commuters who normally drove across the Bay Bridge, which is shut down for several weeks because of damage to one span, actually may have reached work a bit faster on BART yesterday, provided they could find a parking space at the system's jammed stations.
[21271011] |In the best of times, the Bay Bridge is the worst commute in the region, often experiencing back-ups of 20 to 30 minutes or more.

[21271012] |Not that getting into town was easy.
[21271013] |Storm flooding caused back-ups on the freeway, and many commuters had to find rides to BART's stations, because parking lots were full before dawn.
[21271014] |Bus schedules were sometimes in disarray, stranding commuters such as Marilyn Sullivan.
[21271015] |Her commute from Petaluma, Calif., normally takes an hour and 15 minutes, via the Golden Gate Bridge, which connects San Francisco with the North Bay area.
[21271016] |Yesterday, she was still waiting at a bus stop after three hours, trying to transfer to a bus going to the financial district.

[21271017] |"It's worse than I thought," she said.
[21271018] |"I don't know where all the buses are."

[21271019] |But while traffic was heavy early in the commute over the Golden Gate, by 8 a.m. it already had thinned out.
[21271020] |"It's one of the smoothest commutes I've ever had," said Charles Catania, an insurance broker on the bus from Mill Valley in Marin County.
[21271021] |"It looks like a holiday.
[21271022] |I think a lot of people got scared and stayed home."
[21271023] |However, a spokeswoman for BankAmerica Corp. said yesterday's absenteeism at the bank holding company was no greater than on an average day.

[21271024] |At the San Mateo Bridge, which connects the San Francisco peninsula with the East Bay, police were surprised at the speed with which traffic moved.
[21271025] |"Everybody pretty much pitched in and cooperated," said Stan Perez, a sergeant with the California Highway Patrol.

[21271026] |There were many indications that the new work hours implemented by major corporations played a big role.
[21271027] |The Golden Gate handled as many cars as normally yesterday, but over four hours rather than the usual two-hour crush.

[21271028] |Bechtel Group Inc., the giant closely held engineering concern, says it has instituted a 6 a.m. to 8 p.m. flextime arrangement, whereby employees may select any eight-hour period during those hours to go to work.
[21271029] |Of Bechtel's 17,500 employees, about 4,000 work in San Francisco -- one-third of them commuting from stricken East Bay.

[21271030] |Pacific Gas & Electric Co. is offering its 6,000 San Francisco employees a two-tier flextime schedule -- either 6 a.m. to 2 p.m. or 10 a.m. to 6 p.m.
[21271031] |The flextime may cut by almost a third the number of PG&E employees working conventional 9-5 hours, a spokesman says.
[21271032] |Some of the utility's employees may opt for a four-day workweek, 10 hours a day, to cut the commute by 20%.

[21271033] |At Pacific Telesis Group, flextime is left up to individual working groups, because some of the telephone company's employees must be on-site during normal business hours, a spokeswoman says.

[21271034] |Some individuals went to some lengths on their own to avoid the anticipated gridlock.
[21271035] |One senior vice president at Bechtel said he got up at 3 a.m. to drive into San Francisco from the East Bay.

[21271036] |But transportation officials worry that such extraordinary measures and cooperation may not last.
[21271037] |Although one transportation official said drivers who didn't use car pools were committing "an anti-social act," about two-thirds of the motorists crossing the Golden Gate were alone, compared with the normal 70% rate.
[21271038] |And some commuters, relieved by the absence of gridlock, were planning to return to their old ways.

[21272001] |Garry Kasparov went to combat Sunday with the world's most advanced chess computer and kicked it around -- symbolically, anyway -- like an old tin can.

[21272002] |Playing black in the first game, the human champion maneuvered Deep Thought, known for its attacking prowess, into a totally passive position.
[21272003] |Then he unleashed his own, unstoppable, attack.
[21272004] |And in the second game, with Mr. Kasparov advancing ferociously as white, D.T. offered feeble resistance and lost even faster.

[21272005] |Well, mankind can rest easier for now.
[21272006] |Though almost everybody at the playing site had been looking for the 26-year-old Soviet to beat the Pennsylvania-based computer, he gave the machine a far worse drubbing than many expected.
[21272007] |And when Mr. Kasparov strode into the playing hall, he called the outcome.
[21272008] |As if he were Iron Mike, about to enter the ring with a 98-pound weakling, he declared: "I'll be able to beat any computer for the next five years."

[21272009] |His strategy against D.T. was based on a thorough study of dozens of its games, he said, including its notorious whippings of the grandmasters Bent Larsen of Denmark and Robert Byrne of the U.S.
[21272010] |Mr. Kasparov was underwhelmed.
[21272011] |"The computer's mind is too straight, too primitive," lacking the intuition and creativity needed to reach the top, he said.

[21272012] |The champion apparently was not worried at all about D.T.'s strong points.
[21272013] |Its chief builder, Taiwan-born Feng-hsiung Hsu, nicknamed his brainchild "the Weasel" for its tactical flair at wriggling out of horrible positions.
[21272014] |D.T. also has a prodigious and flawless memory, is utterly fearless, and couldn't be distracted by the sexy nude sculptures spread around the playing hall, in the New York Academy of Art.
[21272015] |In fact, D.T. never left home, Carnegie Mellon University in Pittsburgh, but communicated with its human handlers by telephone link.
[21272016] |They conceded that the odds favored Mr. Kasparov, but they put their hope in D.T.'s recently enhanced capacity for examining positions -- up to a million per second, from 720,000.

[21272017] |But the handlers mistakenly stuck with silicon chips; they needed kryptonite.
[21272018] |This became apparent as game one, a Sicilian Defense by Mr. Kasparov, proceeded.
[21272019] |No human can examine millions of moves, but Mr. Kasparov, using his ineffably powerful brain, consistently found very good ones.

[21272020] |After eight moves by each side, the board was the same as in a game in which Nigel Short of Great Britain fought the champion to a draw in 1980.
[21272021] |But the computer didn't play Mr. Short's ninth move, a key pawn thrust, and its position deteriorated rapidly.
[21272022] |Instead of castling, a standard measure to safeguard the king, D.T. made a second-rate rook maneuver at move 13; then it put a knight offside on move 16.
[21272023] |"Only two classes of minds would think of this -- very weak human players, and computers," said Edmar Mednis, the expert commentator for the match, which was attended by hundreds of chess fans.

[21272024] |By move 21, D.T. had fallen into a deep positional trap.
[21272025] |It allowed Mr. Kasparov to exchange his dark-squared bishop for one of D.T.'s knights.
[21272026] |Bishops usually are worth slightly more than knights, but in this case Mr. Kasparov was left with a very dangerous knight and D.T.'s surviving bishop was reduced to passivity.
[21272027] |Indeed, it looked more like a pawn, a "tall pawn," as spectators snidely put it.

[21272028] |Consistently, D.T. was over-optimistic about its chances, which it continually sized up, in numerical form.
[21272029] |When most spectators thought its position hopeless, the computer thought it was only, in effect, one-half of a pawn down.
[21272030] |Such evaluations met with derision, and kept the machine from resigning as soon as humans would have -- prompting more derision.

[21272031] |While D.T. shuffled its king back and forth in a defensive crouch, Mr. Kasparov maneuvered the knight to a dominant outpost.
[21272032] |He also launched a kingside storm, sacrificing a pawn to denude D.T.'s king.
[21272033] |No amount of weasling could have saved this game for D.T.
[21272034] |A piece down, the computer resigned.

[21272035] |Now, with the crowd in the analysis room smelling figurative blood, the only question seemed to be how fast Mr. Kasparov could win game two.
[21272036] |With the advantage of playing white (which moves first), Mr. Kasparov followed up cleverly against the computer's defense, a Queen's Gambit Accepted.

[21272037] |As early as move six, Mr. Kasparov deviated from a well-known sequence of moves, developing a knight instead of making a standard bishop attack against the computer's advanced knight.
[21272038] |This left the computer with a broader range of plausible replies -- and it immediately blundered by moving a queenside pawn, to the neglect of kingside development.

[21272039] |"In a new position just after the opening, a computer will have serious problems," Mr. Kasparov said later.
[21272040] |In such positions, he explained, "you have to create something new, and the computer isn't able to do that right now."

[21272041] |After only 11 moves for each side, the computer's position was shaky.
[21272042] |Greedily, it grabbed a pawn, at the cost of facing a brutal attack.
[21272043] |And when a defensive move was called for, D.T. passed up an obvious pawn move and instead exposed its queen to immediate tactical threats.
[21272044] |Mr. Kasparov remarked later that "even a weak club player" would have avoided the queen move.

[21272045] |Now, after only a dozen moves, spectators were looking for a mating combination.
[21272046] |On a demonstration board, emcee Shelby Lyman showed a quick kill initiated by a knight sacrifice; no spectator refuted this line of play.
[21272047] |Mr. Kasparov's continuation was slower but, in the end, just as deadly.
[21272048] |He won D.T.'s queen for two minor pieces and two pawns -- not enough compensation, in this position, to give the computer much hope.

[21272049] |In a hopeless position, the computer resigned rather than make its 37th move.
[21272050] |And Mr. Kasparov, to cheers and applause, marched back into the analysis room.
[21272051] |"In both games I got exactly what I wanted," he said.
[21272052] |What he had demonstrated, he added, is that there's more to chess than sheer calculation.

[21272053] |Undeterred, D.T.'s handlers vowed to press on.
[21272054] |Indeed, three of them will be building a successor machine for International Business Machines Corp.
[21272055] |Promises Feng-hsiung Hsu: "In three years we'll mount a better challenge."

[21272056] |Mr. Tannenbaum is a reporter in the Journal's New York bureau.

[21273001] |Reaching for that extra bit of yield can be a big mistake -- especially if you don't understand what you're investing in.

[21273002] |Just ask Richard Blumenfeld, a New Jersey dentist who considers himself "a reasonably sophisticated investor."

[21273003] |In May 1986, Dr. Blumenfeld gave Merrill Lynch & Co. about $40,000 for a federally insured certificate of deposit offering an effective yield of more than 9%.

[21273004] |"It was a time when interest rates came down very rapidly," Dr. Blumenfeld recalls.
[21273005] |Yields on five-year CDs at major banks were averaging about 7.45%, and 10-year Treasury notes were paying less than 8%.
[21273006] |The CD seemed like a great deal.

[21273007] |But nearly 3 1/2 years later, Merrill says the investment is worth about $43,000 -- an amount that represents an annual return of just over 2% on Dr. Blumenfeld's $40,000.

[21273008] |The problem is that the CD he bought for a retirement plan wasn't a plain vanilla CD.
[21273009] |Instead, his Merrill broker put him in a zero-coupon CD, which is sold at a deep discount to its face value.
[21273010] |The difference between the price and the face value payable at maturity is the investor's return.

[21273011] |More important, the CD was purchased on the secondary, or resale, market.
[21273012] |Because the CD had an effective yield of 13.4% when it was issued in 1984, and interest rates in general had declined sharply since then, part of the price Dr. Blumenfeld paid was a premium -- an additional amount on top of the CD's base value plus accrued interest that represented the CD's increased market value.

[21273013] |Now the thrift that issued the CD is insolvent, and Dr. Blumenfeld has learned to his surprise that the premium isn't insured under federal deposit insurance.
[21273014] |The tip-off came when he opened a recent Merrill Lynch statement and found that the CD's "estimated current market value" had plummeted by $9,000 in a month.

[21273015] |Several phone calls and a visit to his broker's office later, the dentist found out that the $9,000 drop represented the current value of the premium he paid when he bought the CD, and that the amount wasn't insured.
[21273016] |"This is one thing I was never aware of," he says.
[21273017] |He assumed that principal and interest were "fully insured up to $100,000," he adds.

[21273018] |Dr. Blumenfeld isn't unique.
[21273019] |Especially at times like these, when declining rates make it hard for investors to get yields they have come to expect, too many people chase the promise of above-market returns without fully appreciating the risk.

[21273020] |"Yield greed often gets in the way of understanding things," says John Markese, research director of the American Association of Individual Investors, a Chicago-based educational group.
[21273021] |"The biggest problem we have is that investors realize, after the fact, that they didn't understand what they were investing in."

[21273022] |Dr. Blumenfeld concedes he didn't fully understand what he was buying.
[21273023] |He says that he knew he was getting a zero-coupon CD and that he had previously invested in TIGRs (Treasury Income Growth Receipts), a type of zero-coupon Treasury security sold by Merrill Lynch.
[21273024] |But he says he didn't understand he was buying the CD on the secondary market, and he contends his broker never fully explained the risks.

[21273025] |The broker, Thomas Beairsto of Merrill Lynch's Morristown, N.J., office, refuses to discuss the matter with a reporter, referring inquiries to Merrill Lynch officials in New York.
[21273026] |Those officials say there was full disclosure of the risks in a "fact sheet" sent to all CD investors with their confirmation of sale.

[21273027] |The fact sheet, dated April 1986, says on page three: "If the price paid for a CD purchased in the secondary market . . . is higher than the accreted value in the case of zero-coupon CDs, the difference . . . is not insured . . . .
[21273028] |Computations involving zero-coupon CDs are more complicated and you should discuss any questions you may have with your financial consultant."

[21273029] |Dr. Blumenfeld says he doesn't remember the paragraph about premiums in the fact sheet he received and didn't realize part of what he paid was a premium.
[21273030] |"I assumed I was buying a CD as a CD," he says.

[21273031] |Nevertheless, Merrill Lynch has agreed that if the thrift that issued Dr. Blumenfeld's CD, Peoples Heritage Federal Savings & Loan Association in Salina, Kan., is liquidated and the CD terminated, the brokerage firm would cover the premium Dr. Blumenfeld paid.
[21273032] |(Federal deposit insurance would pay principal and interest accrued to the date of liquidation, to a maximum of $100,000.)

[21273033] |"It's not a blanket commitment, it's a case-by-case situation," says Albert Disposti, a managing director of Merrill Lynch Money Markets Inc.
[21273034] |"There's a question whether brokers at the time were fully aware" of the risks.
[21273035] |"We weren't sure that full disclosure, as we wanted it, was being made."

[21273036] |Merrill Lynch says it's impossible to estimate how many investors are in Dr. Blumenfeld's situation, although it says the firm has received only one other complaint about premiums on the secondary market in three years.
[21273037] |Merrill Lynch now provides credit rating information about the institutions whose CDs it sells, which it didn't provide in 1986.

[21273038] |Zero-coupon CDs are only a small portion of the $1 trillion-plus in CDs outstanding, and those purchased on the secondary market are an even smaller part of the total.
[21273039] |Merrill Lynch estimates that fewer than 10 financial institutions currently issue zero-coupon CDs.
[21273040] |Still, there are several billion dollars of zero-coupon CDs with various maturities outstanding.

[21273041] |Because of the tax consequences of zero-coupon investments -- income tax is payable in the year interest is accrued, although interest isn't actually paid until maturity -- zero-coupon CDs are usually sold for tax-advantaged accounts to finance things like retirement and children's education.
[21273042] |Most zero-coupon CDs are in maturities of six to nine years, and they usually double in value by maturity.

[21273043] |But investors who bought zero-coupon CDs in the secondary market aren't the only ones who may be surprised to learn the full amount of their investments isn't insured.
[21273044] |People who paid a premium for standard CDs purchased on the secondary market could also find that those premiums aren't insured if the institutions that issued the CDs failed.
[21273045] |However, those premiums are usually far smaller than on zero-coupon CDs, and the simpler pricing structure of a standard CD makes it more apparent when a premium is paid.

[21273046] |Whatever the case, a Merrill Lynch spokesman emphasizes, investors shouldn't have to worry about the uninsured premium issue, unless the bank or thrift that issued the CD is closed and its deposits paid off before maturity or transferred to another institution at a lower rate.

[21273047] |Dr. Blumenfeld says he's satisfied that his problem has been resolved.
[21273048] |And he says he's learned a lesson: "You always have to watch out for yourself.
[21273049] |No one else will watch out for you.

[21274001] |Americans are drinking less, but young professionals from Australia to West Germany are rushing to buy premium-brand American vodka, brandy and other spirits.
[21274002] |In particular, many are snubbing the scotch preferred by their parents and opting for bourbon, the sweet firewater from the Kentucky countryside.

[21274003] |With U.S. liquor consumption declining steadily, many American producers are stepping up their marketing efforts abroad.
[21274004] |And those efforts are paying off: Spirits exports jumped more than 2 1/2 times to $157.2 million in 1988 from $59.8 million in 1983, according to the Distilled Spirits Council of the U.S., a trade group.

[21274005] |"Spirits companies now view themselves as global marketers," says Michael Bellas, president of Beverage Marketing Corp., a research and consulting firm.
[21274006] |"If you want to be a player, you have to be in America, Europe and the Far East.
[21274007] |You must have world-class brands, a long-term perspective and deep pockets."

[21274008] |The internationalization of the industry has been hastened by foreign companies' acquisitions of many U.S. producers.
[21274009] |In recent years, for example, Grand Metropolitan PLC of Britain acquired Heublein Inc., while another British company, Guinness PLC, took over United Distillers Group and Schenley Industries Inc.

[21274010] |But the shift has also been fueled by necessity.
[21274011] |While premium-brand spirits like Smirnoff vodka and Jack Daniel's whiskey are riding high in the U.S., domestic spirits consumption fell 15% to 141.1 million cases in 1988 from 166 million cases in 1979.

[21274012] |In recent years, growth has come in the foreign markets.
[21274013] |U.S. brandy exports more than doubled last year to 360,000 proof gallons, a standard industry measure, according to Jobson Beverage Alcohol Group, an industry association.
[21274014] |Exports of rum surged 54% to 814,000 proof gallons.
[21274015] |Mexico is the biggest importer of both rum and brandy from the U.S.

[21274016] |Japan, the world's third-largest liquor market after the U.S. and Britain, helped American companies in April when it lowered its tax on imported spirits and levied a tax on many domestic products.
[21274017] |California wineries, benefiting from lowered trade barriers and federal marketing subsidies, are expanding aggressively into Japan, as well as Canada and Great Britain.
[21274018] |In Japan, the wineries are promoting their products' Pacific roots and courting restaurant and hotel chefs, whose recommendations carry weight.

[21274019] |In Australia, Britain, Canada and Greece, Brown-Forman Corp. has increased its marketing of Southern Comfort Liqueur.
[21274020] |Using cinema, television and print ads, the company pitches Southern Comfort as a grand old drink of the antebellum American South.

[21274021] |The biggest foreign inroads, though, have been made by bourbon.
[21274022] |While U.S. makers of vodka, rum and other spirits compete against powerhouses abroad, trade agreements prohibit any other country from making bourbon.
[21274023] |(All bourbon comes from Kentucky, though Jack Daniel's Tennessee whiskey often is counted as bourbon because of similarity of taste.)
[21274024] |Moreover, just as vodka has acquired an upscale image in the U.S., bourbon has become fashionable in many foreign countries, a uniquely American product tied to frontier folklore.
[21274025] |How was the West won?
[21274026] |With a six-shooter in one hand and bourbon in the other.

[21274027] |"We imagine with bourbon the Wild West, Western motion pictures and gunmen appearing," says Kenji Kishimoto, vice president of Suntory International Corp., a division of Suntory Ltd., Japan's largest liquor company.
[21274028] |Suntory distributes Brown-Forman bourbons in Japan.

[21274029] |Bourbon makes up just 1% of world-wide spirits consumption, but it represented 57% of U.S. liquor exports last year, according to Jobson; no other category had more than 19%.
[21274030] |Big U.S. distillers are fiercely vying for this market, which grew to $77 million last year from $33 million in 1987, according to government figures.

[21274031] |Jim Beam Brands Co., a division of American Brands Inc., is the leading exporter of bourbon and produces 10 other types of liquor.
[21274032] |The company says it will increase its international advertising 35% in 1990, with bourbon representing most of that amount.

[21274033] |Guinness's Schenley Industries unit has increased its TV advertising in Japan and has built partnerships with duty-free shops throughout Asia, enabling it to install prominent counter displays.
[21274034] |The company's I.W. Harper brand is the leading bourbon in Japan, with 40% of the market.

[21274035] |Bourbon exporters have succeeded in Japan where other industries have failed, avoiding cultural hitches in marketing and distribution by allying themselves with local agents.
[21274036] |Jim Beam Brands has a distribution partnership with Nikka Whiskey Co., a distiller.
[21274037] |Seagram Co., which exports Four Roses bourbon, has such a link with Kirin Brewery Co.

[21274038] |Some bourbon makers advertise abroad as they do at home.
[21274039] |To promote Jack Daniel's overseas, Brown-Forman uses the same photos of front porches from Lynchburg, Va., and avuncular old men in overalls and hightops.

[21274040] |Jim Beam print ads, however, strike different chords in different countries.
[21274041] |In Australia, land of the outback, a snapshot of Jim Beam lies on a strip of hand-tooled leather.
[21274042] |West Germans get glitz, with bourbon in the foreground and a posh Beverly Hills hotel in the background.
[21274043] |Ads for England are artsy and irreverent.
[21274044] |One ad features a huge robot carrying a voluptuous woman in a faint.
[21274045] |The tagline: "I only asked if she wanted a Jim Beam.

[21275001] |Capital Cities/ABC Inc.'s net income rose 29% on a modest 9% increase in revenue in the third quarter, mainly on strong advertising demand at its ABC television network operation.

[21275002] |Demand for ads also rose at the eight TV stations Capital Cities owns and at its 80%-owned ESPN sports cable channel.

[21275003] |The broadcast and publishing company reported net climbed to $80.8 million, or $4.56 a share, from $62.6 million, or $3.55 a share, in the year-earlier period.
[21275004] |Revenue reached $1.1 billion from $1.01 billion.

[21275005] |In New York Stock Exchange composite trading yesterday, Capital Cities closed at $558.50, down $5.

[21275006] |The broadcasting unit reported operating profit of $134.9 million, up 18% from the year-earlier $114.3 million.
[21275007] |Publishing reported operating profit was $33.3 million, nearly flat with the year-before $33 million.

[21275008] |Revenue at the broadcasting unit, consisting of the network and stations, advanced 11%, to $838 million from $752.9 million.
[21275009] |The publishing unit reported revenue edged up 2.6% to $263.2 million from $256.6 million.
[21275010] |Chairman Thomas S. Murphy cited Capital Cities' nine daily newspapers in explaining most of the gain.
[21275011] |The parent also publishes weeklies, shopping guides and specialty magazines.

[21275012] |For 1989's first nine months, Capital Cities net income grew 23% to $303.7 million, or $16.97 a share, from $246.9 million, or $14.43 a share.
[21275013] |Revenue eased 0.3% to $3.45 billion from $3.46 billion.

[21275014] |Last week, ABC unseated General Electric Co.'s National Broadcasting Co. unit as the No. 1 network, as rated by A.C. Nielsen Co.
[21275015] |ABC has four shows in the top 10, including the top show, "Roseanne.

[21276001] |As part of a previously announced transaction, Federal Mogul Corp. has bought approximately 565,000 shares of its common stock from Nortek Inc. at $23.50 a share.
[21276002] |Nortek has agreed not to acquire any securities of Federal-Mogul for 10 years and not to influence company affairs during that period.

[21277001] |Weyerhaeuser Co. said it sold its wall-paneling business to an affiliate of one of Indonesia's largest wood-products firms.

[21277002] |Terms of the transaction weren't disclosed.

[21277003] |Weyerhaeuser said its paneling business employs about 300 workers at two facilities in Chesapeake, Va., and Hancock, Vt.

[21278001] |Manville Corp. said it will build a $24 million power plant to provide electricity to its Igaras pulp and paper mill in Brazil.

[21278002] |The company said the plant will ensure that it has adequate energy for the mill and will reduce the mill's energy costs.
[21278003] |Manville said it expects the plant to begin operating at the end of 1991.

[21279001] |Housing and Urban Development Secretary Jack Kemp called on the Federal Reserve System to lower interest rates.

[21279002] |In a speech to the Mortgage Bankers Association, Mr. Kemp broke the administration's public silence on the Fed and complained that "interest rates are too high."

[21279003] |"I am convinced that a monetary policy for this country that would return interest rates to the historical level of 4% or 5% would have not only an immediate impact on housing starts, the housing stock, our industry in America, the refurbishing of our industrial system, it would help the Third World economies considerably and it would particularly have a favorable impact upon our budget deficit," Mr. Kemp said.

[21279004] |The Fed recently eased credit by lowering the bellwether federal funds interest rate to 8 3/4% from about 9%.

[21279005] |Bush administration officials say inflation is under control.
[21279006] |With economic growth slowing, they say they believe the Fed should ease credit even further.
[21279007] |But for the most part, officials have avoided expressing those views in public, fearing they would unnecessarily antagonize the Fed.

[21280001] |McDonald's Corp. said third-quarter earnings rose 14% on a hefty sales gain, but domestic franchisees apparently didn't partake of the improvement.

[21280002] |The world's largest fast-food chain said net income rose to $217.9 million, or 59 cents a share, from $191.3 million, or 51 cents a share, a year ago.
[21280003] |In the latest period, the company had an average of 370.8 million shares, 5.6 million shares below last year's level.

[21280004] |Revenue rose 12% to $1.63 billion from $1.46 billion.
[21280005] |Systemwide sales, which include sales at franchisee as well as company-owned stores, totaled $4.59 billion compared with $4.2 billion.

[21280006] |But sales for U.S. franchisees were flat at best on a per-store basis despite weak 1988 figures.
[21280007] |Compared with the first nine months of last year, average franchisee store sales this year were down nearly $3,200, reflecting a fierce discounting war among fast-food chains.
[21280008] |Since McDonald's menu prices rose this year, the actual decline may have been more.

[21280009] |McDonald's closed at $31.375, up $1, in New York Stock Exchange composite trading yesterday.

[21280010] |While franchisees were having a tough time holding sales, McDonald's company-operated stores posted hefty gains for the nine months, with sales per company-operated unit rising $20,000.
[21280011] |One analyst noted that the company often has better store locations than do its franchisees, thus aiding promotional efforts.

[21280012] |On average in the latest nine months, company-operated units in the U.S. had $90,552 more in sales than did franchised outlets.
[21280013] |There are more than three times as many franchised domestic outlets as there are company stores.

[21280014] |Profit margins at U.S. company-owned stores in the quarter were up nearly 1%, which the company attributed in part to lower food costs.
[21280015] |Prudential-Bache Securities analyst Leslie Steppel said reduced labor costs helped boost margins, although she doubted "that kind of performance is sustainable."
[21280016] |Calling sales "still relatively soft," Ms. Steppel believes that in real terms, U.S. sales slipped 3 1/2% to 4% at company-operated stores in the quarter.

[21280017] |Apparently acknowledging weaker U.S. sales systemwide, McDonald's vowed "to use our size and muscle to do all that is necessary to build the brand."

[21280018] |Overseas, both franchisees and the company performed substantially better than a year ago.
[21280019] |Third-quarter sales in Europe were exceptionally strong, boosted by promotional programs and new products -- although weaker foreign currencies reduced the company's earnings.
[21280020] |McDonald's said that systemwide sales would have been $115 million greater had 1988 exchange rates remained in effect.

[21280021] |"Going into the fourth quarter the sales comparison will be more difficult," predicted restaurant analyst Howard Hansen of Kidder, Peabody & Co.

[21280022] |Reflecting better growth prospects abroad, McDonald's noted that as of Sept. 30 more stores were under construction overseas than a year ago, while the opposite was true for domestic expansion.
[21280023] |At the end of the third quarter McDonald's had 10,873 units operating world-wide.

[21280024] |In the nine months, earnings rose 12% to $555.6 million, or $1.49 a share, from $494.4 million, or $1.31 a share, a year earlier.
[21280025] |Revenue rose 11% to $4.56 billion from $4.12 billion.

[21281001] |Carnival Cruise Lines Inc.'s common stock was dragged down yesterday amid concerns that a bankruptcy filing by a Finnish shipbuilder would delay delivery of three big cruise ships.

[21281002] |The Miami-based company's stock fell $1.75 yesterday to $20.75 a share in heavy American Stock Exchange composite trading.
[21281003] |Early yesterday, Carnival said in a company statement that it had been "notified unofficially" that Waertsilae Marine Industries, the Finnish shipyard that is building its three new cruise ships, planned to file for bankruptcy.
[21281004] |Officials at Carnival declined to comment.

[21281005] |"There is just a tremendous amount of uncertainty about what the effect, if any, of all this is," said John P. Uphoff, an analyst at Raymond James Associates Inc.
[21281006] |"I didn't even know that a company in a socialistic country could file for bankruptcy."

[21281007] |Carnival said the "Fantasy," the first of the three $200 million ships that Carnival has on order, is scheduled to be delivered next month, just in time for the winter tourist season in the Caribbean.
[21281008] |That ship, which would carry about 2,050 passengers, would expand the capacity of Carnival's existing 14-ship fleet by 24%.
[21281009] |The second ship, which is half-completed, is scheduled to be delivered in fall 1990, and the third in fall 1991.

[21281010] |"There's a 99% chance that the Fantasy will be delivered close to schedule," said Caroline Levy, an analyst at Shearson Lehman Hutton Inc.
[21281011] |"The others will probably be delivered as well, but Carnival will likely have to pay a higher price for them."
[21281012] |She said the company could pay as much as 25% more for the ships.

[21281013] |If the ships aren't delivered, however, it will likely have an effect on the company's earnings as soon as the 1990 fiscal year, which begins Dec. 1.
[21281014] |Analysts said those estimates -- which range from about $1.80 a share to $1.95 a share -- are based on Fantasy being in operation in 1990.
[21281015] |If the ship fails to arrive, those per-share earnings estimates could be trimmed 15 cents or more.

[21281016] |Analysts weren't willing to speculate on how much money Carnival might lose through deposits.
[21281017] |Normally, a company pays a portion of the total cost of a ship as it reaches various stages of construction.
[21281018] |Carnival, for example, has already paid about $160 million of the total cost for Fantasy.
[21281019] |Some analysts say this may give it the right to seize the ship if the situation warrants it.

[21281020] |According to reports from Finland, Waertsilae Marine, 19%-owned by conglomerate Oy Waertsilae, filed for bankruptcy yesterday after the shipyard's contractors had started to demand bank guarantees.
[21281021] |The shipyard disclosed in mid-August that it expected losses stemming from a series of unprofitable orders.

[21282001] |Designer Sandra Garratt filed for Chapter 7 Bankruptcy Code protection, saying that her cash flow had been cut off.

[21282002] |The designer, whose line of modular, one-size-fits-all clothing has spawned a host of clones, has been in a dispute with her latest licensee, Jerell Inc. for several months.

[21282003] |Ms. Garratt was the subject of a Wall Street Journal article in March.

[21282004] |The designer's attorney, Molly Bartholow, said that Ms. Garratt was forced to start bankruptcy-law proceedings because Jerell began withholding her royalty payments last month.

[21282005] |Jerell paid Ms. Garratt royalties for the line known as Multiples by Sandra Garratt, which are sold primarily through department stores.
[21282006] |Ms. Garratt sued the Dallas apparel maker earlier this year, charging that Jerell developed and marketed clothing lines fashioned after her designs, in violation of their contract.
[21282007] |That lawsuit is still pending.

[21282008] |Jerell couldn't immediately be reached for comment.

[21282009] |Ms. Garratt's assets and liabilities weren't disclosed.

[21283001] |Eaton Corp. had a 26% drop in third-quarter profit mainly because of lower sales of truck parts, its largest and most profitable single business.

[21283002] |Sales of medium and heavy-duty trucks continue to lag previous-year rates, leading Eaton to expect fourth-quarter net income to fall below year-earlier levels, said Stephen R. Hardis, vice chairman and chief financial and administrative officer.
[21283003] |He declined to make a specific earnings estimate.

[21283004] |Third-quarter net was $40 million, or $1.04 a share, from $54.4 million, or $1.47 a share, a year ago.
[21283005] |Sales rose 2.8% to $864.1 million, from $840.4 million.

[21283006] |The quarter net was below analyst expectations mainly because truck-parts sales didn't rebound in September from the summer doldrums as they usually do, said Patrick E. Sheridan, analyst with McDonald & Co.
[21283007] |Mr. Sheridan, who had been expecting quarter profit of about $1.25 a share, says he is reducing his estimate for the year to the area of $5.70 a share, from his previous estimate of $6.10.

[21283008] |Eli Lustgarten of PaineWebber Inc., who a couple of weeks ago reduced his 1989 estimate to $5.70 a share because of the weakening truck market, says he will make another cut to about $5.50 a share in light of the third-quarter report.
[21283009] |He said Eaton's quarter profit margin on controls was lower than he anticipated.

[21283010] |Eaton said sales of truck axles, transmissions and other parts fell 7.2% to $295 million.
[21283011] |Sales of parts for cars and construction vehicles rose.
[21283012] |Eaton doesn't provide profit figures separately for each category, but operating profit for vehicle parts as a group fell 26% to $51 million on an about 1% drop in sales to $488 million.

[21283013] |Mr. Hardis said truck-fleet operators appear to be cautious about buying new trucks until they see how the economy behaves.
[21283014] |The truck sales slowdown reflects the general slowing in sales of consumer goods, he said, and the latest reports show a slight improvement rather than any indication of a downward spiral.

[21283015] |Operating profit from electrical and electronics controls, Eaton's other major business group, fell 11% to $32 million, despite a 7.7% increase in sales to $376 million.
[21283016] |The company attributed the decline to weakness in the commercial-switch market in North America and in the European appliance-controls market.

[21283017] |For the nine months, net -- including profit from discontinued operations both years and in 1988 an extraordinary charge of $17.7 million related to settlement of a lawsuit -- was $170.6 million, or $4.54 a share, up 5.8% from $161.3 million, or $4.32 a share, a year ago.
[21283018] |Eaton earned from continuing operations $165.1 million, or $4.40 a share, down 7% from $177.5 million, or $4.76 a share, a year earlier.

[21283019] |Nine-month sales were $2.79 billion, up 8.2% from $2.58 billion a year earlier.

[21283020] |In New York Stock Exchange composite trading, Eaton closed at $57.50 a share, down $2.50.

[21284001] |In Poland's rapid shift from socialism to an undefined alternative, environmental issues have become a cutting edge of broader movements to restructure the economy, cut cumbersome bureaucracies, and democratize local politics.

[21284002] |Initial steps were taken at Poland's first international environmental conference, which I attended last month.
[21284003] |The conference, held in Lower Silesia, was co-sponsored by the Environment Ministry, the Rockefeller Brothers Fund, and the Polish Ecological Club, and was attended by 50 Poles from government and industry, as well as Hungarians, Czechs, Russians, Japanese and Americans.

[21284004] |The conference was entitled "Economic Mechanisms for Environmental Protection," a significant departure from East Bloc usage, which recognizes only one economic mechanism -- central planning -- to direct industrial behavior.
[21284005] |Even more remarkably, it focused on emissions trading and similar market approaches to address pollution, notwithstanding Poland's lack of functioning markets.

[21284006] |Why did East Bloc participants unanimously endorse market-based pollution approaches?
[21284007] |The answer lies both in the degraded environment of these countries and the perceived causes of that degradation.

[21284008] |Like other East Bloc countries, Poland possesses environmental laws more honored in their breach than in their observance.

[21284009] |According to a detailed report by Zbigniew Bochniarz of the University of Minnesota's Hubert Humphrey Institute, 27 areas containing a third of Poland's population are regarded as "ecological hazards" due to multiple violations of standards.
[21284010] |Norms are consistently exceeded at 60% of nitrogen oxide monitoring sites and 80% of those for dust and soot emissions.
[21284011] |Four-fifths of Poland's soils have become highly acidified; 70% of its southern forests are projected to die by century's end.
[21284012] |Between 1965 and 1985, Polish waters fit for human consumption dropped from 33% to 6% of all surface waters, while those unfit even for industry use nearly doubled.

[21284013] |Poland produces about 20 times more soot and five times more sulfur dioxide and solid waste per unit of gross national product than does Western Europe.
[21284014] |Its mortality rate for males over 35 is about 50% higher than West Germany's, and 50% higher in hazard areas than the national average.
[21284015] |Since 1978, average annual growth rates for most pollutants have outstripped the growth of GNP.

[21284016] |Conference participants saw these effects as flowing directly from (a) Marxist devaluation of environmental resources, which are not produced by labor; (b) planned economies' inability to control pollution where enterprises are state-owned and penalties are paid by the government; and (c) the continuing Stalinist emphasis on heavy industry for economic development, producing a far heavier and more wasteful use of energy and natural resources than in the West.
[21284017] |They repeatedly noted that environmental progress could not be secured without true ownership, genuine competition based on market factors, and the risk of bankruptcy if a business makes the wrong decisions.

[21284018] |The solutions they formally proposed included lead/sulfur taxes, conservation and recycling incentives, reforestation offsets, transferable pollution permits, an ecological bank to finance pollution-reduction credits, and debt-for-environment swaps.
[21284019] |But their most fundamental recommendation was to separate industry from the state, making it fully accountable for pollution control.

[21284020] |A revolution takes more than conference manifestos.
[21284021] |Indeed, skepticism was amply captured by a joke told by Poles at the conference: "The world must be coming to an end.
[21284022] |The Russians are talking peace.
[21284023] |The Palestinians are talking elections.
[21284024] |And the Poles are engaged in commerce."
[21284025] |But the implications of such a shift to market approaches go well beyond the fact that Poland is already working on nationwide emissions trades to reduce smelter pollution, or that the Soviets plan to introduce marketable pollution permits in some republics next year.
[21284026] |Those implications include: -- Privatization.
[21284027] |Faced with a $40 billion foreign debt and skyrocketing inflation, Poland must privatize industry and eliminate subsidies to stabilize its currency and qualify for international assistance.
[21284028] |Market-based pollution control may consume some capital that would otherwise purchase state industries.
[21284029] |But it could also accelerate "marketization" by reinforcing industrial accountability, breaking up state monopolies, giving managers a stake in solutions, and ensuring that modernization is not reversible for failure to address environmental effects.

[21284030] |-- Least-cost solutions.
[21284031] |As conferees noted, scarce capital means the costs of control must be minimized through a broad menu of compliance choices for individual firms.
[21284032] |That means simple, clear rules that secure the first large blocks of reduction, deferring more complex issues such as risk.
[21284033] |It also means use of quantity-based pollution limits such as transferable permits, rather than price-based limits such as effluent fees.
[21284034] |That's because quota-trained managers will likely respond better to quantity than to price signals.

[21284035] |-- Creative financing.
[21284036] |Even least-cost environmental solutions will require billions of dollars.
[21284037] |New types of financing must make funds available without draining Poland's hard-currency reserves.

[21284038] |-- Democratization.
[21284039] |East Bloc pollution data typically have been state secrets.
[21284040] |While Polish data have been freely available since 1980, it was no accident that participants urged the free flow of information.
[21284041] |For once information flows, public participation follows and repression becomes difficult to reimpose.

[21284042] |-- Global reciprocity.
[21284043] |One participant prematurely declared that America has had a free market in goods but a planned economy for environmental protection, while Poland represents the opposite.
[21284044] |His point: It will be increasingly difficult for the U.S. to cling to command-and-control measures if even the East Bloc steps to a different drummer.

[21284045] |At the moment, Poland resembles 19th-century Pittsburgh more than a modern industrial society -- with antiquated production, inadequate environmental management, and little ecological awareness.
[21284046] |But the continuing pressures for free-market economics suggest the conference's vision was not all fantasy.

[21284047] |Mr. Levin, former head of EPA's regulatory reform staff, adapted this from his November column for the Journal of the Air and Waste Management Association.

[21285001] |Disappointing earnings news from some technology companies unnerved investors in the over-the-counter market, who sold shares of Apple Computer, Intel and many other computer-related concerns.

[21285002] |The drop in those and other technology stocks contributed to an 0.7% slide by the Nasdaq composite index.
[21285003] |It finished at 467.22, down 3.45.
[21285004] |The nervousness about the technology stock outlook also hurt the Dow Jones Industrial Average, which slipped about 1%.

[21285005] |Mostly because of the sell-off in technology stocks, the Nasdaq 100 Index of the OTC's largest non-financial issues dropped 4.58 to 457.52.
[21285006] |The Nasdaq Financial Index of giant insurance and banking issues lost 2.38 to 458.32.

[21285007] |Some traders said the sell-off of technology stocks on low volume reflected a lack of conviction by investors.
[21285008] |But Charlie Howley, vice president in charge of OTC trading at SoundView Financial in Stamford, Conn., said the selling was orderly.

[21285009] |"It's a quiet retreat," said Mr. Howley.
[21285010] |"It's nothing dramatic, just a routine sell-off."
[21285011] |Some of it was due to lower-than-expected earnings from leading companies, he said.
[21285012] |But some of it also represented profit-taking by investors who have made big gains in some issues.

[21285013] |Yesterday's volume of 117.2 million shares was far below last week's sizzling average of nearly 177 million.
[21285014] |For October so far, daily volume is averaging 150.3 million, putting it on track to be the year's busiest month.

[21285015] |Apple Computer, which reported lackluster earnings Friday, lost 1 1/4 to 46 3/4 on 1.1 million shares.
[21285016] |Stratus Computer, which reported earnings late Friday that were in line with a disappointing forecast, eased 3/4 to 24 on 816,000 shares.

[21285017] |Investors apparently didn't like the news from Rainbow Technologies either.
[21285018] |It said net income was 17 cents a share in the third quarter, compared with 16 cents a share a year earlier.
[21285019] |Rainbow's stock dropped 2 to 14 1/4.

[21285020] |Other technology stocks that were weaker included Intel, which fell 1 1/4 to 33 1/2 on 1.9 million shares, Mentor Graphics, down 3/4 to 16 1/4 on 1.6 million shares, Sun Microsystems, which slipped 3/8 to 18 1/4, and MCI Communications, down 1 to 42 3/4.
[21285021] |Microsoft, which last week rose to a record, fell victim to profit-taking, traders said, as it declined 2 1/8 to 83 1/8.
[21285022] |Conner Peripherals was unchanged at 15.

[21285023] |Among takeover stocks, Jefferson Smurfit jumped 1 1/4 to 42 1/2 after SIBV-MS Holdings said the price to be paid to Jefferson Smurfit's minority holders has been raised to $43 a share.
[21285024] |The increase of $1.25 a share is being made to settle shareholder litigation relating to SIBV-MS's tender offer.

[21285025] |SIBV-MS Holdings is a new company jointly owned by an affiliate of Jefferson Smurfit and a Morgan Stanley limited partnership.
[21285026] |The Jefferson Smurfit affiliate, Smurfit International B.V., holds about 78% of the shares outstanding.
[21285027] |These shares will be bought by SIBV-MS Holdings at $41.75 each after the acquisition of the minority shares.

[21285028] |Another takeover target, LIN Broadcasting, eased 1/2 to 110 1/8 on 313,800 shares.
[21285029] |LIN's suitor, McCaw Cellular Communications, dropped 1 to 40 on almost 350,000 shares.

[21285030] |Some analysts say investors will begin paying more attention to earnings, partly in response to the latest round of disappointments.
[21285031] |They say investors will favor companies that historically have posted annual earnings growth of 15% to 20%.
[21285032] |That would be good news for the OTC market, some analysts say, because many small growth stocks are traded there.

[21285033] |Michael R. Weisberg, partner in charge of research at Robertson Stephens & Co. in San Francisco, said some investors have already made the switch.
[21285034] |The Robertson Stephens Index of 340 emerging growth stocks is up 23.1% for the year through Friday.
[21285035] |The rise matches that of the Dow Jones industrials this year.

[21285036] |"It's been a spectacular year for the emerging growth stock investor," Mr. Weisberg said.
[21285037] |He predicted that the most popular growth companies will be those with "some kind of unique product or franchise" that makes them appear able to sustain their momentum.
[21285038] |He puts the OTC market's Nellcor, Office Club and BizMart on the list.

[21285039] |Nellcor, a maker of electronic patient monitoring systems, was up 3/4 to 16 7/8 on 258,000 shares yesterday, while retailing issue Office Club was unchanged at 10 3/4 on 65,200 shares.
[21285040] |BizMart, another retailing stock, was off 3/8 to 8 1/4 on nearly 80,000 shares.

[21285041] |Other favorites of growth-stock analysts and money managers also had a mixed session.
[21285042] |Payco American, a credit collection concern, jumped 1 3/8 to 20 5/8 on volume of 93,000, and Mail Boxes Etc., a private postal services company, advanced 1/2 to 23 1/2 on volume of 64,000.
[21285043] |But Legent, a systems software stock, was down 1/2 to 29 3/4 on 39,300 shares.
[21285044] |Novell, a computer networking concern, fell 1 1/2 to 30 on 152,000 shares.

[21285045] |Elsewhere, Valley National continued its slide, dropping 2 1/8 to 15 on 1.7 million shares.
[21285046] |The Arizona banking concern is facing difficulties related to weakness in the real estate market in the state.

[21285047] |Higher earnings helped some issues.
[21285048] |Amgen rose 2 1/4 to 54 3/4 on almost 800,000 shares, and CVB Financial jumped 4 to 41 on only 1,000 shares.

[21286001] |Why can't we teach our children to read, write and reckon?
[21286002] |It's not that we don't know how to, because we do.
[21286003] |It's that we don't want to.
[21286004] |And the reason we don't want to is that effective education would require us to relinquish some cherished metaphysical beliefs about human nature in general and the human nature of young people in particular, as well as to violate some cherished vested interests.
[21286005] |These beliefs so dominate our educational establishment, our media, our politicians, and even our parents that it seems almost blasphemous to challenge them.

[21286006] |Here is an example.
[21286007] |If I were to ask a sample of American parents, "Do you wish the elementary schools to encourage creativity in your children?" the near-unanimous answer would be, "Yes, of course."
[21286008] |But what do we mean, specifically, by "creativity"?
[21286009] |No one can say.
[21286010] |In practice, it ends up being equated with a "self-expression" that encourages the youngsters' "self-esteem."
[21286011] |The result is a generation of young people whose ignorance and intellectual incompetence is matched only by their good opinion of themselves.

[21286012] |The whole notion of "creativity" in education was (and is) part and parcel of a romantic rebellion against disciplined instruction, which was (and is) regarded as "authoritarian," a repression and frustration of the latent talents and the wonderful, if as yet undefined, potentialities inherent in the souls of all our children.
[21286013] |It is not surprising that parents find this romantic extravagance so attractive.

[21286014] |Fortunately, these same parents do want their children to get a decent education as traditionally understood, and they have enough common sense to know what that demands.
[21286015] |Their commitment to "creativity" cannot survive adolescent illiteracy.
[21286016] |American education's future will be determined by the degree to which we -- all of us -- allow this common sense to prevail over the illusions that we also share.

[21286017] |The education establishment will fight against common sense every inch of the way.
[21286018] |The reasons are complex, but one simple reason ought not to be underestimated.
[21286019] |"Progressive education" (as it was once called) is far more interesting and agreeable to teachers than is disciplined instruction.

[21286020] |It is nice for teachers to think they are engaged in "personality development" and even nicer to minimize those irksome tests with often disappointing results.
[21286021] |It also provides teachers with a superior self-definition as a "profession," since they will have passed courses in educational psychology and educational philosophy.
[21286022] |I myself took such courses in college, thinking I might end up a schoolteacher.
[21286023] |They could all fairly be described as "pap" courses.

[21286024] |But it is unfair to dump on teachers, as distinct from the educational establishment.
[21286025] |I know many schoolteachers and, on the whole, they are seriously committed to conscientious teaching.
[21286026] |They may not be among the "best and brightest" of their generation -- there are very few such people, by definition.
[21286027] |But they need not be to do their jobs well.
[21286028] |Yes, we all can remember one or two truly inspiring teachers from our school days.
[21286029] |But our education proceeded at the hands of those others, who were merely competent and conscientious.
[21286030] |In this sense, a teacher can be compared to one's family doctor.
[21286031] |If he were brilliant, he probably would not be a family doctor in the first place.
[21286032] |If he is competent and conscientious, he serves us well.

[21286033] |Our teachers are not an important factor in our educational crisis.
[21286034] |Whether they are or are not underpaid is a problem of equity; it is not an educational problem.
[21286035] |It is silly libel on our teachers to think they would educate our children better if only they got a few thousand dollars a year more.
[21286036] |It is the kind of libel the teachers' unions don't mind spreading, for their own narrow purposes.
[21286037] |It is also the kind of libel politicians find useful, since it helps them strike a friendly posture on behalf of an important constituency.
[21286038] |But there is not one shred of evidence that, other things being equal, salary differentials result in educational differentials.
[21286039] |If there were such evidence, you can be sure you would have heard of it.

[21286040] |If we wish to be serious about American education, we know exactly what to do -- and, just as important, what not to do.
[21286041] |There are many successful schools scattered throughout this nation, some of them in the poorest of ghettos, and they are all sending us the same message.
[21286042] |Conversely, there are the majority of unsuccessful schools, and we know which efforts at educational reform are doomed beforehand.
[21286043] |We really do know all we need to know, if only we could assimilate this knowledge into our thinking.

[21286044] |In this respect, it would be helpful if our political leaders were mute, rather than eloquently "concerned."
[21286045] |They are inevitably inclined to echo the conventional pap, since this is the least controversial option that is open to them.
[21286046] |Thus at the recent governors' conference on education, Gov. Bill Clinton of Arkansas announced that "this country needs a comprehensive child-development policy for children under five."
[21286047] |A comprehensive development policy for governors over 30 would seem to be a more pressing need.
[21286048] |What Gov. Clinton is advocating, in effect, is extending the educational system down to the pre-kindergarten years.
[21286049] |Whether desirable or not, this is a child-care program, not an educational program.
[21286050] |We know that very early exposure to schooling improves performance in the first grade, but afterward the difference is quickly washed away.

[21286051] |Let us sum up what we do know about education and about those education reforms that do work and don't work: -- "Parental involvement" is a bad idea.
[21286052] |Parents are too likely to blame schools for the educational limitations of their children.
[21286053] |Parents should be involved with their children's education at home, not in school.
[21286054] |They should see to it that their kids don't play truant; they should make certain that the children spend enough time doing homework; they should scrutinize the report card.
[21286055] |If parents are dissatisfied with a school, they should have the option of switching to another.

[21286056] |-- "Community involvement" is an even worse idea.
[21286057] |Here, the experience of New York City is decisive.
[21286058] |Locally elected school boards, especially in our larger cities, become the prey of ambitious, generally corrupt, and invariably demagogic local politicians or would-be politicians.
[21286059] |New York is in the process of trying to disengage itself from a 20-year-old commitment to this system of school governance, even as Chicago and other cities are moving to institute it.

[21286060] |-- In most states, increasing expenditures on education, in our current circumstances, will probably make things worse, not better.
[21286061] |The reason is simple: Education takes place in the classroom, where the influence of money is minimal.

[21286062] |Decades of educational research tell us unequivocally that even smaller classes have zero effect on the academic performance of the pupils -- though they may sometimes be desirable for other reasons.
[21286063] |The new money flows into the already top-heavy administrative structure, which busies itself piling more and more paper work on the teachers.
[21286064] |There is neither mystery nor paradox in the fact that as educational expenditures (in real terms) have increased sharply in the past quarter-of-a-century -- we now spend more per pupil than any other country in the world -- educational performance has declined.
[21286065] |That is the way the system works.

[21286066] |-- Students should move up the educational ladder as their academic potential allows.
[21286067] |No student should be permitted to be graduated from elementary school without having mastered the 3 R's at the level that prevailed 20 years ago.
[21286068] |This means "tracking," whose main purpose is less to permit the gifted youngsters to flourish (though that is clearly desirable) than to ensure that the less gifted get the necessary grounding for further study or for entering the modern world of work.
[21286069] |The notion that tracking is somehow "undemocratic" is absurd.
[21286070] |The purpose of education is to encourage young men and women to realize their full academic potential.
[21286071] |No one in his right mind actually believes that we all have an equal academic potential.

[21286072] |-- It is generally desirable to use older textbooks -- many of them, alas, out of print -- rather than newer ones.
[21286073] |The latter are modish, trendy, often downright silly, and at best insubstantial.
[21286074] |They are based on dubious psychological and sociological theories rather than on educational experience.
[21286075] |One of the reasons American students do so poorly in math tests, as compared with British, French, German or Japanese students, is the influence of the "New Math" on American textbooks and teaching methods.

[21286076] |Anyone who wants to appreciate just how bizarre this situation is -- with students who can't add or subtract "learning" the conceptual basis of mathematical theory -- should read the article by Caleb Nelson (himself a recent math major at Harvard) in the November American Spectator.

[21286077] |-- Most important of all, schools should have principals with a large measure of authority over the faculty, the curriculum, and all matters of student discipline.
[21286078] |Study after study -- the most recent from the Brookings Institution -- tells us that the best schools are those that are free of outside interference and are governed by a powerful head.
[21286079] |With that authority, of course, goes an unambiguous accountability.
[21286080] |Schools that are structured in this way produce students with higher morale and superior academic performance.
[21286081] |This is a fact -- though, in view of all the feathers that are ruffled by this fact, it is not surprising that one hears so little about it.

[21286082] |Mr. Kristol, an American Enterprise Institute fellow, co-edits The Public Interest and publishes The National Interest.

[21287001] |International Business Machines Corp. unveiled a broad strategy to tackle the biggest problem that manufacturers face when computerizing their operations: Most machines can't talk to each other.

[21287002] |The company unveiled more than 50 products, mostly software, that are designed to integrate the three areas of a manufacturing operation -- the plant floor, design operations and production planning.
[21287003] |The aim, ultimately, is to increase the flow of information into a manufacturer's main computer network for use in business planning, marketing and other operations.

[21287004] |Manufacturers have already spent so heavily on automation that they are one of the computer industry's leading revenue sources.
[21287005] |But many manufacturers find that communication between different computers has been rendered nearly impossible by the babel of computer languages used by different machines, including robots and machine tools.

[21287006] |IBM's announcement, which was expected and will formally be made to customers today, also marks an attempt to gain credibility on the plant floor, where Digital Equipment Corp. has long dominated and where Hewlett-Packard Co. has recently gained market share.

[21287007] |Consultants have said that it will take a while for all the pieces of the IBM strategy to fall into place, even though the specific products IBM unveiled will generally be available by the end of the first quarter.

[21287008] |Sam Albert, a consultant in Scarsdale, N.Y., said that in the past IBM has developed broad software strategies only for problems that crossed industry lines.
[21287009] |He said he believes IBM's decision to invest this sort of effort into a single industry showed that it was getting serious about understanding customers' problems and wasn't just selling technology.
[21287010] |He said he expects IBM to unveil similar strategies for other industries in coming months.

[21287011] |IBM's push is also unusual in its approach to marketing.
[21287012] |Rather than just send out marketing people to knock on customers' doors, IBM is making several hundred of its own manufacturing people available to discuss specific needs.
[21287013] |IBM's manufacturing staff also will be able to provide software that IBM has developed internally and will be able to form teams with a customer to jointly solve manufacturing problems.

[21287014] |IBM can obviously bring its expertise to bear on problems related to computer manufacturing, but it could also help customers on software to deal with such things as changes in engineering documents.

[21287015] |"We may not have every manufacturing problem, but we have most," said George Conrades, IBM's top marketing official.

[21288001] |Japan's Big Four securities firms posted first-half unconsolidated results that mirrored softer performance as a result of slower turnover on the Tokyo Stock Exchange during July and August.

[21288002] |Figures for the period ended Sept. 30 for the four largest brokerage firms -- Nomura Securities Co., Daiwa Securities Co., Yamaichi Securities Co. and Nikko Securities -- also reflected a changeover to a fiscal year ending March 31, replacing the 12-month term formerly finishing Sept. 30.

[21288003] |As a result, brokerage house officials said, appropriate comparisons from the same period a year earlier were unavailable.
[21288004] |Operating profit, pretax profit and net income results, however, were provided for the immediately preceding six-month period.

[21288005] |The statistics follow a year-on-year rebound in consolidated and unconsolidated results in the full fiscal year ended in March 1989, recovering from dismal results in the prior fiscal year as a result of the October 1987 stock market crash.

[21288006] |Nomura said its pretax profits inched up 0.9% to 248.91 billion yen (US$1.75 billion) from 246.60 billion yen in the six months ended March 31.

[21288007] |Total operating profit fell 3.1% to 486.1 billion yen from 501.61 billion yen.
[21288008] |Net income, however, rose 3.7% to 107.87 billion yen from 103.98 billion yen.
[21288009] |Per-share net rose to 55.10 yen from 54.51 yen.

[21288010] |Daiwa said its pretax profits surged 9.6% to 171.04 billion yen from 156.12 billion yen in the preceding six-month term.

[21288011] |Operating profit rose 5.5% to 332.38 billion yen from 315.12 billion yen.
[21288012] |Net income jumped 21% to 79.03 billion yen from 65.53 billion yen.
[21288013] |Per-share net rose to 62.04 yen from 51.50 yen.

[21288014] |Yamaichi said its pretax profit increased 8.9% to 117.94 billion yen from 108.28 billion yen.
[21288015] |Operating profit rose 5.3% to 279.75 billion yen from 265.79 billion yen.
[21288016] |Net income surged 21% to 55.59 billion yen from 46.02 billion yen.
[21288017] |Per-share net rose to 47.46 yen from 39.31 yen.

[21288018] |Nikko's pretax profit rose 1.6% to 130.25 billion yen from 128.19 billion yen.

[21288019] |Operating profit rose 4% to 293.29 billion yen from 282.08 billion yen.
[21288020] |Net income rose 23% to 63.52 billion yen from 51.65 billion yen.
[21288021] |Per-share net rose to 44.08 yen from 36.13 yen.

[21289001] |Harken Energy Corp. of Dallas said it will drop its $11.75-a-share, or $190 million, offer for Tesoro Petroleum Corp. if the two companies don't have an agreement to merge by Dec. 15.

[21289002] |Harken, which made its offer in August, said it still is awaiting a response to its offer from Tesoro's board.

[21289003] |Harken also said that its financing from Bankers Trust Co. has been extended until Dec. 15 to give Tesoro's board time to consider the offer at a Tesoro board meeting scheduled for mid-November.

[21289004] |Harken, which owns about 800 retail gas stations, has said it is particularly interested in Tesoro's refinery because it would fill a gap in its business.
[21289005] |However, Tesoro, based in Houston, already has rejected a suitor in the past year.

[21290001] |Francis D. John, 35-year-old president, will assume the additional job of chief executive officer.
[21290002] |He succeeds Paul J. Montle, 42, who will remain chairman.
[21290003] |National Environmental also said it will move its headquarters from Hingham to Folcroft, Pa., the site of its sludge dewatering facility.
[21290004] |National Environmental, formerly Yankee Cos., is a sludge treatment company.

[21291001] |Eagle Clothes Inc., which is operating under Chapter 11 of the federal Bankruptcy Code, said it reached an agreement with its creditors.

[21291002] |Under the accord, Albert Roth, chairman and chief executive officer, and Arthur Chase, Sam Beigel, and Louis Polsky will resign as officers and directors of the menswear retailer.
[21291003] |Mr. Roth, who has been on leave from his posts, will be succeeded by Geoffrie D. Lurie of GDL Management Inc., which is Eagle's crisis manager.
[21291004] |Mr. Lurie is currently co-chief executive.
[21291005] |Arnold Levine, acting co-chief executive, will continue as senior vice president and a board member.

[21291006] |Eagle also said it received a commitment for as much as $8 million in financing from Norfolk Capital Group Inc.
[21291007] |In addition, a Norfolk affiliate, York Capital Inc., will purchase all of the interests of Eagle's secured lenders, which total $11.5 million, and guarantee as much as $8.2 million in payments to Eagle's unsecured creditors.
[21291008] |A committee representing the unsecured creditors agreed to accept 24 cents on the dollar, Eagle said.

[21291009] |The plan would extend the period under which Eagle has the exclusive right to file a reorganization plan.
[21291010] |It would extinguish all of Eagle's existing capital stock and issue new stock to York as sole holder.

[21291011] |A bankruptcy court hearing is set for Nov. 3 on these accords.

[21291012] |In its bankruptcy-law petition, filed in U.S. Bankruptcy Court in Manhattan, Eagle said its problems began in 1987 and early 1988 when its then-senior lender, Bankers Trust Co., reduced its credit line.
[21291013] |In September 1988, Eagle acquired Biny Clothing Inc., a closely held New York chain operated under the Bonds name.
[21291014] |Eagle's management retired and Biny's management took control of the company.

[21291015] |At the time, Eagle reached a new credit agreement with Bankers Trust and with Bank Leumi Trust Co. of New York for $8 million, and a new subordinated debt accord with First Century Partners and Biny management for $2 million.
[21291016] |But Eagle said the financing was insufficient and sales during the past fiscal year sagged.

[21291017] |Under Chapter 11, a company operates under protection from creditors' lawsuits while it works out a plan to pay debts.

[21292001] |Standard & Poor's Corp. said it would add John H. Harland Co., an Atlanta check printer, to its 500-stock index, effective at the close of trading on Wednesday.

[21292002] |American Medical International Inc., a New York hospital operator, will be deleted from the index at that time.
[21292003] |American Medical is being acquired.

[21293001] |The tougher new regulations under the savings-and-loan bailout law are accelerating the thrift industry's shrinking act.

[21293002] |Largely to meet tougher new capital requirements, thrifts reduced their assets $13.4 billion in August, by selling such assets as mortgage-backed securities and loans.

[21293003] |Industry assets as of Aug. 31 were $1.31 trillion, the lowest since August 1988.

[21293004] |As thrifts sell assets to improve their capital-to-asset ratio, as required under the new law passed in August, they must also reduce liabilities, such as deposits.
[21293005] |As interest rates paid depositors were lowered, thrift withdrawals exceeded deposits by $5.1 billion, not including interest credited to accounts.

[21293006] |It was the third consecutive month in which thrifts shed assets to increase the size of their capital in relation to their assets, the Office of Thrift Supervision said.
[21293007] |The asset shrinkage was particularly concentrated in several large California institutions.

[21293008] |"The downsizing of the thrift industry is well under way," said Bert Ely, an industry consultant in Alexandria, Va.
[21293009] |"This suggests the bailout law is having a more dramatic effect than anyone would have imagined so soon."

[21293010] |James Barth, an economist with the Office of Thrift Supervision, also attributed some of the outflow to seasonal factors.
[21293011] |"August is a month when people are paying school tuition," he said.
[21293012] |"That and adjustment to the new law were the biggest factors in the industry."

[21293013] |Not including thrifts under government conservatorship, S&Ls reduced their assets by $10.1 billion from the previous month, and deposit outflows totaled $3.9 billion.

[21293014] |For the 264 insolvent thrifts under government management at the end of August, assets declined by $3.3 billion and withdrawals exceeded deposits by $1.2 billion.

[21293015] |Thrifts raised capital mostly by selling mortgages and mortgage-backed securities, which were reduced by $7.8 billion in August from the prior month.
[21293016] |As of Aug. 31, thrifts held $185 billion in mortgage-backed securities.

[21293017] |The deposit numbers for August marked a swing back to huge outflows after a July net deposit inflow of $54 million -- the only net inflow in more than a year.
[21293018] |Deposits aren't expected to exceed withdrawals in the foreseeable future, as the industry continues to shrink.

[21293019] |"I think we are going to see deposit shrinkage continue, unless we see big changes in rates," Mr. Ely said.

[21293020] |For the first eight months of 1989, thrifts' withdrawals exceeded deposits by $44.5 billion.
[21293021] |For the prior year, deposits exceeded withdrawals by $8.8 billion.

[21294001] |The estimates of real gross national product prepared by the Bureau of Economic Analysis in the Department of Commerce significantly understate the rate of economic growth.
[21294002] |Since the bureau's estimates for the business sector provide the numerator for the productivity ratios calculated by the Department of Labor, underestimated growth rates artificially depress official productivity statistics.

[21294003] |If this thesis is correct, it has important implications for macroeconomic policies: It may lower the sense of urgency behind efforts to enact tax incentives and other measures to increase the rate of growth in productivity and real GNP.
[21294004] |It would also affect the perceptions of the board of governors of the Federal Reserve System, and the informed public generally, as to what constitutes a reasonable degree of price stability.

[21294005] |In the early 1980s, I predicted a significant acceleration in productivity growth over the rest of the decade.
[21294006] |This forecast was based on the apparent reversal of most of the negative forces -- such as demographic changes, the oil shock and accelerating inflation -- that had reduced productivity gains in the 1970s.
[21294007] |There has indeed been more than a one percentage point improvement in productivity growth since 1981.
[21294008] |But I had expected more, which is one reason I began looking at evidence suggesting defects in the official output estimates.
[21294009] |The evidence does not clearly support the view that the downward bias in output growth has become greater during the 1948-89 period, but all I am claiming is that the growth trend is understated.
[21294010] |(It is, however, possible, that further study will reveal increasing bias.)

[21294011] |This bias is in no way deliberate.
[21294012] |The understatement of growth is due largely to the conservative expedients adopted to deal with deficiencies in basic economic data.

[21294013] |The first of three major sources of error is the use of labor input estimates (mainly employment or hours) instead of output estimates for those sectors, such as governments, paid household services and private non-profit institutions, where there are difficulties in assembling output data.
[21294014] |This means that no allowance is made for possible increases in output per unit of labor.
[21294015] |In an unrelated program in which the Labor Department does estimate output per employee for more than two-thirds of federal civilian employees, it found an average annual rate of productivity improvement of 1.7% during the 1980s.
[21294016] |Even if it is assumed that productivity rose no more than half as quickly in the rest of the nonbusiness sector, this Labor Department estimate indicates a downward bias in the real GNP estimates of 0.2 percentage point a year, on average.

[21294017] |The federal productivity estimators use labor input, rather than output, data for their calculations of half of private financial and service industries as well.
[21294018] |Independent estimates of output in those industries, including one by the Department of Labor for banking, suggests that productivity in finance and services appears to have risen by an average of at least 1.5% a year between 1948 and 1988.
[21294019] |Because finance and services contribute 10% to final business product, missing these productivity improvements depresses the overall growth rate by 0.15% a year.

[21294020] |The second source of error in growth statistics is the use of inappropriate deflators to adjust for price changes.
[21294021] |I estimate that these mismeasurements as detailed by Martin N. Baily and Robert J. Gordon add a further 0.12 percentage point to the downward bias in the growth rate of real business product.

[21294022] |Finally, the official estimates understate growth because they make inadequate allowance for improvements in quality of goods and services.
[21294023] |In 1985, a new price index for computers adjusted for changes in performance characteristics was introduced, and that resulted in a significantly larger increase in real outlays for durable goods than the earlier estimates had showed.
[21294024] |Since then, further research argues that failure to take account of quality improvements has contributed a total of at least 0.26 percentage point to the downward bias in the growth rate.

[21294025] |In sum, the biases ennumerated above indicate a 0.7 percentage point understatement in growth of total real GNP.
[21294026] |For the private domestic business economy, the bias was a bit over 0.5 percentage point.
[21294027] |In other words, the growth rates of both total GNP and real private business product per labor hour have been underestimated by about 20%.

[21294028] |Mr. Kendrick is professor emeritus of economics at George Washington University.
[21294029] |He is co-author of "Personal Productivity: How to Increase Your Satisfaction in Living" (M.E. Sharp, 1988).

[21295001] |Union Carbide Corp. said third-quarter net income plunged 35% from a year earlier on weakness in the company's mainstay chemicals and plastics business.

[21295002] |Net was $139 million, or 98 cents a share, for the quarter, compared with $213 million, or $1.56 a share, a year ago.

[21295003] |Sales were $2.14 billion, up 1.6% from $2.11 billion the previous year.

[21295004] |Carbide, like other companies with a heavy reliance on the so-called commodity end of the chemicals industry, was expected to post earnings sharply lower than in an exceptionally strong 1988 third quarter.
[21295005] |But the company's latest quarter was a few pennies a share lower than the more pessimistic projections on Wall Street.

[21295006] |"It certainly wasn't a disaster, but it does show weakness" in some of the company's chief markets, said George Krug, a chemicals-industry analyst at Oppenheimer & Co.

[21295007] |In New York Stock Exchange composite trading, Carbide closed at $24.50 a share, down 50 cents.

[21295008] |Prices for polyethylene, a common plastic and an important Carbide product, started to fall early this year; the slide accelerated in the third quarter as buyers continued to trim inventories.
[21295009] |Prices also fell for ethylene oxide and glycols, products used in making antifreeze.

[21295010] |Some producers of polyethylene, figuring the inventory reductions are near an end, have announced price boosts.
[21295011] |The first real test of whether prices have hit bottom may come in the next several weeks, when the new prices become effective.
[21295012] |A Carbide spokesman said "the conditions are right for the increase to hold."

[21295013] |For the third quarter, operating profit from Carbide's chemicals and plastics business fell to $238 million from $352 million a year ago, before accounting for taxes and interest expense.
[21295014] |Operating profit from carbon products, such as graphite electrodes, also declined, to $6 million from $20 million.
[21295015] |In the industrial-gases segment, operating profit climbed to $87 million from $58 million.

[21295016] |The latest quarter included a gain of about $62 million on the sale of the company's urethane polyols and propylene glycols businesses.
[21295017] |Propylene glycols are used in making personal-care products such as shampoo, and urethane polyols are used in making the polyurethane foam found in furniture cushioning and other products.

[21295018] |That gain was mostly offset by a loss of about $55 million from a write-down in its polysilicon business.
[21295019] |Polysilicon is used in making integrated circuits.

[21295020] |For the nine months, net totaled $526 million, or $3.74 a share, up 5% from $501 million, or $3.71 a share, a year ago.

[21295021] |Sales rose 7.7% to $6.66 billion from $6.19 billion.

[21296001] |At least 10 states are resisting Drexel Burnham Lambert Inc.'s nationwide effort to settle its legal troubles, and some might instead try to revoke the firm's license to sell securities within their borders.

[21296002] |The reluctance of some states to let Drexel off the hook could hamper the firm's attempts to polish its image after its guilty plea to six felonies last month, say several people familiar with the discussions.

[21296003] |Up to now, Drexel has made a rapid-fire series of settlements with 25 states and the commonwealth of Puerto Rico.
[21296004] |Just yesterday, New Hampshire announced it made a $75,000 settlement with Drexel, a record-tying fine for a securities-law matter in that state.
[21296005] |These states have been entering into settlements with Drexel as part of the firm's efforts to operate freely anywhere in the U.S. despite its record as an admitted felon.

[21296006] |But individuals familiar with the generally successful Drexel talks say the firm is meeting resistance from some big states, including New Jersey, New York, California, Pennsylvania, Connecticut and Missouri.
[21296007] |Officials in some of these states say they don't want to simply accept the settlements offered by Drexel.
[21296008] |They question if Drexel is getting easier treatment than the many small penny-stock firms whose brokerage licenses are routinely revoked.

[21296009] |Drexel has to settle with state securities regulators in the wake of its criminal guilty plea and a related civil settlement with the Securities and Exchange Commission that includes payment of $650 million in penalties.
[21296010] |These stem from a two-year federal investigation of insider trading and securities fraud on Wall Street.

[21296011] |Ohio, the District of Columbia, Tennessee and Illinois have been less resistant to Drexel than the other six states, but nonetheless have refused to settle so far, say those familiar with the discussions.

[21296012] |Drexel says it doesn't expect any of its state brokerage licenses will be revoked, and even if some are, its securities business wouldn't be directly hurt.
[21296013] |It already has sold its retail, or individual-investor, brokerage network; securities firms don't need brokerage licenses for non-retail activities such as investment banking.

[21296014] |Still, if nothing else, a revoked brokerage license could be a burden because it must be disclosed in many of the transactions in which Drexel could be involved.

[21296015] |Securities regulators praise Drexel for its energetic effort, led by government-approved general counsel Saul S. Cohen, to settle its legal problems with the states.
[21296016] |But they disagree about the message these settlements give to the public.

[21296017] |"There was a lot of internal debate about that specific issue," said Susan Bryant, Oklahoma's chief securities regulator and president of the North American Securities Administrators Association, which drafted a voluntary settlement plan for the states with Drexel.
[21296018] |The question, she said, is whether Drexel should be allowed to pay and move on, or "whether you should (simply) revoke the license when someone is convicted of a felony."

[21296019] |While Ms. Bryant's state went ahead and accepted Drexel's settlement offer of $25,000, she said: "I don't have any argument with those who came to different conclusions.
[21296020] |I can see both sides."

[21296021] |Similarly, Alfred Rubega, New Hampshire's director of securities regulation, said his state hadn't received any complaints about Drexel, so it really couldn't press the issue.
[21296022] |Still, "I understand the reasons" that other states are holding out, he said.

[21296023] |Mr. Cohen, the Drexel general counsel, said, "I don't think, as we say in investment banking, that `by the end of the day' we'll be losing any licenses."
[21296024] |Asked about states that are taking a hard line, he said, "There are states that have asked for additional information, which we are providing to them."

[21296025] |Mr. Cohen said more than $2.8 million has been paid to 26 states and that Drexel still expects to pay out a total of $11.5 million.
[21296026] |By the end of this week, Drexel should have another three to four settlements, Mr. Cohen said.

[21296027] |"The rate we're going, I think that by the end of the month, we're looking to have a total of 30 to 35," he said.

[21296028] |That total would be important for Drexel.
[21296029] |The investment bank has previously announced that as part of its punishment it would create an independent foundation to promote ethical behavior in the securities industry.
[21296030] |A proviso to that promise is that a minimum of 35 states reach settlement agreements before next Tuesday.

[21296031] |There are, according to several securities commissioners, at least 16 states that are either close to settlements with Drexel or who don't appear opposed to settling.

[21296032] |Drexel's proposed state fines have been based on a state's population and on the size of Drexel's business in the state.

[21296033] |New Jersey, for example, was asked to accept $300,000, but refused.
[21296034] |The state isn't ruling out revoking Drexel's brokerage license.
[21296035] |The state can also bar Drexel as an investment adviser.
[21296036] |State officials won't describe their position in detail, but James McLelland Smith, state securities chief, said: "We really are still looking at it and have informed (Drexel) that the proposal is really not sufficient for settlement."

[21296037] |Connecticut already has issued a "notice of intent" to revoke Drexel's brokerage license.
[21296038] |It is one of the states that have met with Mr. Cohen and asked for additional information about investors' accounts and other matters.
[21296039] |"This particular issue goes to the very integrity of the capital-formation market," state Banking Commissioner Howard Brown said.
[21296040] |A banking department spokesman added: "Commissioner Brown doesn't feel that money alone is the issue here."

[21296041] |Particularly touchy are the cases of New York, which is Drexel's base, and California, the base of Drexel's highly profitable junk-bond operation that led to the firm's legal difficulties.
[21296042] |Neither state has settled, and officials in the two states won't discuss their reasons for not doing so.
[21296043] |But Drexel has made it clear it could mount a significant legal battle in each state if its license is revoked, according to state officials.

[21296044] |Ms. Bryant, the head of the state securities group, said Drexel has done a better job of settling with the states than E.F. Hutton did after its guilty plea to a massive check-kiting scheme several years ago.
[21296045] |Still, she said, Drexel's trouble with some states isn't a bad thing.

[21296046] |"This process should point out that it's not going to be easy for a firm that's convicted of a felony to immediately jump back into the retail business," Ms. Bryant said.
[21296047] |"We need to have somebody worried so they don't do this again."

[21296048] |These are the 26 states, including the commonwealth of Puerto Rico, that have settled with Drexel: Alaska, Arkansas, Delaware, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Minnesota, Mississippi, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Utah, Vermont, Washington, Wyoming and Puerto Rico.

[21297001] |Time Warner Inc. reported a third-quarter net loss of $176 million, or $2.88 cents a share, reflecting acquisition costs for a 59.3% stake in Warner Communications Inc. and the purchase method of accounting for the transaction.

[21297002] |Separately, Warner reported a net loss of $106 million, or 56 cents a share, including merger expenses of $100 million and $120 million in charges associated with stock-appreciation-based compensation plans.

[21297003] |Time Warner is in the process of completing its acquisition of the remaining Warner shares.
[21297004] |Time Warner emphasized in a news release that it should be evaluated based on its cash flow, which the company defined as earnings before interest, taxes, depreciation and amortization.
[21297005] |On a pro-forma basis, assuming the merger was effective Jan 1, 1988, including the results from both Time Inc. and all of Warner, that cash flow figure would be $526 million for the latest quarter, more than double the comparable figure a year ago, or $242 million, according to Time Warner.

[21297006] |Some analysts at least are buying that argument, and weren't alarmed by the losses.
[21297007] |"What really matters is the operating income of the divisions: I look at these numbers and I say, these businesses are doing well," said Mark Manson, a vice president of Donaldson, Lufkin & Jenrette Securities Corp.
[21297008] |"For example, Warner made more than $100 million from filmed entertainment in three months.
[21297009] |That's a big number.
[21297010] |Warner also had a gain of more than 13% from records and music publishing, even though the domestic record business was sluggish this summer."

[21297011] |In the year-ago third quarter, Time on its own reported net income of $81 million, or $1.42 a share.
[21297012] |Combined revenue for the latest quarter of Time Warner was $2.2 billion, compared with the year-ago Time revenue of $1.1 billion.

[21297013] |On a pro forma basis, including all of Warner's earnings, Time Warner had a third-quarter loss of $217 million, compared with a $342 million loss a year earlier.
[21297014] |On the same basis, revenue rose to $2.7 billion from $2.2 billion.

[21297015] |For the third quarter, Warner's $106 million loss compared with a year-ago loss of $113 million, or 90 cents a share.
[21297016] |Revenue rose to $1.5 billion from $1.1 billion.
[21297017] |The 1988 figures were restated to include the results of Lorimar Telepictures Corp., which Warner acquired in January.

[21297018] |Time Warner's operating earnings got a boost from Warner's record box-office results.
[21297019] |"Batman" alone has racked up more than $247 million in box-office receipts to date, making it Warner Bros.' largest grossing film ever.
[21297020] |"Lethal Weapon II" was also a big hit.
[21297021] |Warner also contributed record results from its music business, where unit sales of compact discs rose more than 50% from a year ago, the company said, helped by Prince's "Batman" soundtrack.

[21297022] |Time Warner said its cable division turned in a 77% increase in operating cash flow, to $166 million from $94 million, reflecting higher per-subscriber revenue.
[21297023] |In addition, the 1988 results included a $20 million charge reflecting a reserve for relocation related expenses at American Television & Communications Corp.

[21297024] |On the other hand, Time Warner said its operating cash flow declined in the quarter for its magazine division, its books division and the Home Box Office programming division.
[21297025] |In magazines, higher advertising revenues at Sports Illustrated and Fortune were offset by lower ad revenue for other major magazines.
[21297026] |The programming division saw a decline in operating cash flow because the year-ago quarter included a $12 million dividend from Turner Broadcasting System and because the quarter includes expenses associated with the Nov. 15 launch of HBO's Comedy Channel.

[21297027] |In New York Stock Exchange composite trading, Time Warner closed at $138.625 a share, up $1.875, while Warner closed at $63.875 a share, up 12.5 cents.

[21298001] |Robert J. Penn, president and chief executive officer, will take early retirement from this steelmaker Dec 31.
[21298002] |William S. Leavitt, chairman, said Mr. Penn, 58 years old, would continue as a consultant and would work with the board in selecting a successor.
[21298003] |UNR recently emerged from bankruptcy-law proceedings that left 64% of the reorganized company's common stock in the hands of trustees of an asbestos-disease claims trust.
[21298004] |The company said it would have no further comment.
[21298005] |Mr. Leavitt, 37, was elected chairman earlier this year by the company's new board, having served as vice president for legal and corporate affairs.
[21298006] |His father, David S. Leavitt, was chairman and chief executive until his death in an accident five years ago, at which time Mr. Penn was named president.

[21299001] |Some House Democrats are trying to head off an appointment by President Bush to the board that oversees the savings-and-loan bailout, contending that the prospective nominee is the head of troubled banks himself.

[21299002] |Four Democrats on the House Banking Committee sent President Bush a letter stating their concerns about the expected appointment of James Simmons, an Arizona banker and former fund-raiser for Mr. Bush, to the Oversight Board of the Resolution Trust Corp.

[21299003] |The Oversight Board, created in the savings-and-loan law signed in August, sets policy for the RTC, which will sell hundreds of the nation's sick thrifts and billions of dollars of their assets.
[21299004] |Treasury Secretary Nicholas Brady, Federal Reserve Board Chairman Alan Greenspan and Housing and Urban Development Secretary Jack Kemp are members of the board.
[21299005] |President Bush must appoint two other members, one a Democrat and one a Republican.

[21299006] |An administration official confirmed last week that Mr. Simmons, the chairman of Valley National Bank in Phoenix, is the Republican appointee, and that a security clearance was under way.
[21299007] |The Democratic appointee hasn't been determined, the official said.

[21299008] |Mr. Simmons declined to comment, and the White House said the congressmen's letter is under review.

[21299009] |The letter, dated last Thursday, cited the losses at Valley National, and at United Bank, also of Phoenix, where Mr. Simmons was chairman for 29 years.
[21299010] |Both banks have been battered, as have other Arizona banks, by falling real estate prices.
[21299011] |Valley National, for example, had $470 million in problem assets as of June.

[21299012] |"We believe that there are numerous other candidates more qualified for this important position and we encourage you to give them your thorough consideration before making this key RTC appointment," the letter said.
[21299013] |"The RTC needs the most able, competent management available."

[21299014] |But Mr. Simmons has long ties to both Republicans and banking.
[21299015] |He was co-chairman of Mr. Bush's Arizona campaign committee in last year's election, and also worked for Mr. Bush in the 1980 election.
[21299016] |The two met more than 30 years ago, when Mr. Simmons worked for Commercial Bank & Trust Co. of Midland, Texas, where Mr. Bush was an organizing director.

[21299017] |In 1986, Mr. Simmons also served on a committee of businessmen headed by William Seidman, chairman of the Federal Deposit Insurance Corp. and the Resolution Trust Corp.
[21299018] |That committee determined to open Arizona to banking across state lines.
[21299019] |Arizona Trend magazine referred to Mr. Simmons this year as one of the 25 most influential people in the state.

[21299020] |The letter to Mr. Bush was signed by Reps. Bruce Vento (D., Minn.), the chairman of the Banking Committee's RTC Task Force, Thomas McMillen (D., Md.), Kweisi Mfume (D., Md.) and Paul Kanjorski (D., Pa.).