[22200001] |Influential members of the House Ways and Means Committee introduced legislation that would restrict how the new savings-and-loan bailout agency can raise capital, creating another potential obstacle to the government's sale of sick thrifts. [22200002] |The bill, whose backers include Chairman Dan Rostenkowski (D., Ill.), would prevent the Resolution Trust Corp. from raising temporary working capital by having an RTC-owned bank or thrift issue debt that wouldn't be counted on the federal budget. [22200003] |The bill intends to restrict the RTC to Treasury borrowings only, unless the agency receives specific congressional authorization. [22200004] |"Such agency `self-help' borrowing is unauthorized and expensive, far more expensive than direct Treasury borrowing," said Rep. Fortney Stark (D., Calif.), the bill's chief sponsor. [22200005] |The complex financing plan in the S&L bailout law includes raising $30 billion from debt issued by the newly created RTC. [22200006] |This financing system was created in the new law in order to keep the bailout spending from swelling the budget deficit. [22200007] |Another $20 billion would be raised through Treasury bonds, which pay lower interest rates. [22200008] |But the RTC also requires "working" capital to maintain the bad assets of thrifts that are sold, until the assets can be sold separately. [22200009] |That debt would be paid off as the assets are sold, leaving the total spending for the bailout at $50 billion, or $166 billion including interest over 10 years. [22200010] |"It's a problem that clearly has to be resolved," said David Cooke, executive director of the RTC. [22200011] |The agency has already spent roughly $19 billion selling 34 insolvent S&Ls, and it is likely to sell or merge 600 by the time the bailout concludes. [22200012] |Absent other working capital, he said, the RTC would be forced to delay other thrift resolutions until cash could be raised by selling the bad assets. [22200013] |"We would have to wait until we have collected on those assets before we can move forward," he said. [22200014] |The complicated language in the huge new law has muddied the fight. [22200015] |The law does allow the RTC to borrow from the Treasury up to $5 billion at any time. [22200016] |Moreover, it says the RTC's total obligations may not exceed $50 billion, but that figure is derived after including notes and other debt, and subtracting from it the market value of the assets the RTC holds. [22200017] |But Congress didn't anticipate or intend more public debt, say opponents of the RTC's working-capital plan, and Rep. Charles Schumer (D., N.Y.) said the RTC Oversight Board has been remiss in not keeping Congress informed. [22200018] |"That secrecy leads to a proposal like the one from Ways and Means, which seems to me sort of draconian," he said. [22200019] |"The RTC is going to have to pay a price of prior consultation on the Hill if they want that kind of flexibility." [22200020] |The Ways and Means Committee will hold a hearing on the bill next Tuesday. [22201001] |We're about to see if advertising works. [22201002] |Hard on the heels of Friday's 190-point stock-market plunge and the uncertainty that's followed, a few big brokerage firms are rolling out new ads trumpeting a familiar message: Keep on investing, the market's just fine. [22201003] |Their mission is to keep clients from fleeing the market, as individual investors did in droves after the crash in October [22201004] |Just days after the 1987 crash, major brokerage firms rushed out ads to calm investors. [22201005] |This time around, they're moving even faster. [22201006] |PaineWebber Inc. filmed a new television commercial at 4 p.m. EDT yesterday and had it on the air by last night. [22201007] |Fidelity Investments placed new ads in newspapers yesterday, and wrote another new ad appearing today. [22201008] |Shearson Lehman Hutton Inc. by yesterday afternoon had already written new TV ads. [22201009] |It considered running them during tomorrow night's World Series broadcast but decided not to when the market recovered yesterday. [22201010] |Other brokerage firms, including Merrill Lynch & Co., were plotting out potential new ad strategies. [22201011] |The brokerage firms learned a lesson the last time around, when frightened investors flooded the phone lines and fled the market in a panic. [22201012] |This time, the firms were ready. [22201013] |Fidelity, for example, prepared ads several months ago in case of a market plunge. [22201014] |When the market went into its free fall Friday afternoon, the investment firm ordered full pages in the Monday editions of half a dozen newspapers. [22201015] |The ads touted Fidelity's automated 800-number beneath the huge headline, "Fidelity Is Ready For Your Call." [22201016] |A Fidelity spokesman says the 800-line, which already was operating but which many clients didn't know about, received about double the usual volume of calls over the weekend. [22201017] |"A lot of investor confidence comes from the fact that they can speak to us," he says. [22201018] |"To maintain that dialogue is absolutely crucial. [22201019] |It would have been too late to think about on Friday. [22201020] |We had to think about it ahead of time." [22201021] |Today's Fidelity ad goes a step further, encouraging investors to stay in the market or even to plunge in with Fidelity. [22201022] |Underneath the headline "Diversification," it counsels, "Based on the events of the past week, all investors need to know their portfolios are balanced to help protect them against the market's volatility." [22201023] |It goes on to plug a few diversified Fidelity funds by name. [22201024] |PaineWebber also was able to gear up quickly thanks to the 1987 crash. [22201025] |In the aftermath of the 1987 debacle, the brokerage firm began taping commercials in-house, ultimately getting its timing down fast enough to tape a commercial after the market closed and rush it on the air that night. [22201026] |It also negotiated an arrangement with Cable News Network under which CNN would agree to air its last-minute creations. [22201027] |The new PaineWebber commercial, created with ad agency Saatchi & Saatchi Co., features Mary Farrell, one of the firm's most visible investment strategists, sounding particularly bullish. [22201028] |Taped just as the market closed yesterday, it offers Ms. Farrell advising, "We view the market here as going through a relatively normal cycle. . . . [22201029] |We continue to feel that the stock market is still the place to be for long-term appreciation." [22201030] |The spot was scheduled to appear three times on CNN last night. [22201031] |PaineWebber considered an even harder sell, recommending specific stocks. [22201032] |Instead, it settled on just urging the clients who are its lifeline to keep that money in the market. [22201033] |"We're saying the worst thing that anyone can do is to see the market go down and dump everything, which just drives the prices down further," says John Lampe, PaineWebber's director of advertising. [22201034] |"If you owned it and liked it Friday, the true value hasn't changed." [22201035] |He adds, "This isn't 1987 revisited." [22201036] |With the market fluctuating and then closing up more than 88 points yesterday, investment firms had to constantly revise their approach. [22201037] |At Shearson Lehman, executives created potential new commercials Friday night and throughout the weekend, then had to regroup yesterday afternoon. [22201038] |The plan had been to make one of Shearson's easy-to-film, black-and-white "Where We Stand" commercials, which have been running occasionally in response to news events since 1985. [22201039] |The ad would have run during the World Series tomorrow, replacing the debut commercial of Shearson's new ad campaign, "Leadership by Example." [22201040] |But in a meeting after the market closed yesterday, Shearson executives decided not to go ahead with the stock-market ad. [22201041] |"We don't think at this point anything needs to be said. [22201042] |The market seems to be straightening out; we're taking a wait-and-see attitude," says Cathleen B. Stewart, executive vice president of marketing. [22201043] |In any case, the brokerage firms are clearly moving faster to create new ads than they did in the fall of 1987. [22201044] |But it remains to be seen whether their ads will be any more effective. [22201045] |In 1987, despite a barrage of ads from most of the major investment firms, individuals ran from the market en masse. [22201046] |Now the firms must try their hardest to prove that advertising can work this time around. [22201047] |Ad Notes. . . . [22201048] |ARNOLD ADVERTISING: [22201049] |Edward Eskandarian, former chairman of Della Femina, McNamee WCRS/Boston, reached an agreement in principle to acquire a majority stake in Arnold Advertising, a small Boston shop. [22201050] |Terms weren't disclosed. [22201051] |Mr. Eskandarian, who resigned his Della Femina post in September, becomes chairman and chief executive of Arnold. [22201052] |John Verret, the agency's president and chief executive, will retain the title of president. [22201053] |Separately, McDonald's Corp., Oak Brook, Ill., named Arnold to handle its estimated $4 million cooperative ad account for the Hartford, Conn., area. [22201054] |That account had been handled by Della Femina, McNamee WCRS. [22201055] |EDUCATION ADS: [22201056] |A 142-page ad supplement to Business Week's special "Corporate Elite" issue calls on business leaders to use their clout to help solve the nation's education crisis. [22201057] |The supplement, the largest ever for the magazine, includes ads from 52 corporate advertisers and kicks off a two-year Business Week initiative on education. [22201058] |The magazine will distribute 10% of the gross revenues from the supplement as grants to innovative teachers. [22202001] |You know what the law of averages is, don't you? [22202002] |It's what 1) explains why we are like, well, ourselves rather than Bo Jackson; 2) cautions that it's possible to drown in a lake that averages two feet deep; and 3) predicts that 10,000 monkeys placed before 10,000 pianos would produce 1,118 publishable rock 'n' roll tunes. [22202003] |Baseball, that game of the long haul, is the quintessential sport of the mean, and the mean ol' law caught up with the San Francisco Giants in the World Series last weekend. [22202004] |The team that dumped runs by the bushel on the Chicago Cubs in the National League playoffs was held to just one in two games by the home-team Oakland A's, the gang that had been done unto similarly by the Los Angeles Dodgers and Orel Hershiser in last year's tournament. [22202005] |Morever, much of the damage was accomplished by A's who had some catching up to do. [22202006] |In game two, on a cool Sunday evening in this land of perpetual autumn, a lot of the catching up was done by the A's catcher, Terry Steinbach. [22202007] |He hit a 2-0 pitch from Rick Reuschel into the left-field stands in inning four to stretch his team's lead from 2-1 to a decisive 5-1, where it stayed. [22202008] |So what if Steinbach had struck just seven home runs in 130 regular-season games, and batted in the seventh position of the A's lineup. [22202009] |"If you get your pitch, and take a good swing, anything can happen," he later remarked. [22202010] |On Saturday night, quite a few of the boys in green and gold salted away successes to salve the pain of past and, no doubt, future droughts. [22202011] |Mark McGwire, the big, red-haired Oakland first baseman, had three hits in four at bats, two more than he'd had in the five-game Dodger series in which he'd gone 1-for-17. [22202012] |The A-men batting Nos. 6 through 9, a.k.a. the "bottom of the order," got seven of their team's 11 hits and scored four of its runs in a 5-0 decision. [22202013] |Right-hander Dave Stewart held the Giants to five hits to account for the zero on the other side of the Saturday ledger. [22202014] |That he was the A's winningest pitcher during its American League campaign with a 21-9 mark, plus two wins over Toronto in the playoffs, indicates he may have some evening up coming, but with the way his split-fingered fastball is behaving, that might not be this week. [22202015] |The same goes for Mike Moore, another veteran who overcame early struggles to permit the Giants but a run and four hits in seven innings in Sunday's contest. [22202016] |"Every guy they put out there had a better split-finger than the guy before," marveled Giant manager Roger Craig. [22202017] |He's an ex-hurler who's one of the leading gurus of the fashionable delivery, which looks like a fastball until it dives beneath the lunging bat. [22202018] |The upshot of the downshoot is that the A's go into San Francisco's Candlestick Park tonight up two games to none in the best-of-seven fest. [22202019] |The stat to reckon with here says that about three of four clubs (29 of 39) that took 2-0 Series leads went on to win it all. [22202020] |That's not an average to soothe Giant rooters. [22202021] |One might think that the home fans in this Series of the Subway Called BART (that's a better name for a public conveyance than "Desire," don't you think?) would have been ecstatic over the proceedings, but they observe them in relative calm. [22202022] |Partisans of the two combatants sat side by side in the 49,000-plus seats of Oakland Coliseum, and while they cheered their favorites and booed the opposition, hostilities advanced no further, at least as far as I could see. [22202023] |A few folks even showed up wearing caps bearing the colors and emblems of both teams. [22202024] |"I'm for the Giants today, but only because they lost yesterday. [22202025] |I love 'em both. [22202026] |The only thing I'm rooting for is for the Series to go seven games," said David Williams, a Sacramento septuagenarian, at the Coliseum before Sunday's go. [22202027] |The above represents a triumph of either apathy or civility. [22202028] |I choose to believe it's the latter, although it probably springs from the fact that just about everyone out here, including the A's and Giants, is originally from somewhere else. [22202029] |Suffice it to say that if this were a New York Yankees-Mets series, or one between the Chicago Cubs and White Sox (hey, it's possible), you'd need uniformed police in every other seat to separate opposing fans, and only the suicidal would bifurcate their bonnets. [22202030] |Anyway, the A's gave you a lot of heroes to root for. [22202031] |In the opening game, besides Steinbach and Stewart, there was Walt Weiss, a twiggy-looking, second-year shortstop who had lost a couple months of the season to knee surgery. [22202032] |He was flawless afield (ditto in game two), moved a runner along in the A's three-run second inning, and homered for his team's final tally. [22202033] |Such is his reputation among the East Bay Bashers that when he hit his first career home run last season, the fan who caught it agreed to turn the ball over to him in return for an autograph. [22202034] |Not his autograph; power-hitter McGwire's. [22202035] |An A's co-hero of the second game was Rickey Henderson, who exemplifies the hot side of the hot-cold equation. [22202036] |He smoked Toronto in the playoffs with six hits, seven walks and eight stolen bases in 22 at bats, and continued that by going 3-for-3 at the plate Sunday, along with walking, stealing a base and scoring a run. [22202037] |"When you're in the groove, you see every ball tremendously," he lectured. [22202038] |The cold guys in the set were Will Clark, Kevin Mitchell and Matt Williams, the Giants' 3-4-5 hitters. [22202039] |They combined for 25 hits, six home runs and 24 runs batted in in the five games against the Cubs. [22202040] |They went a collective 5-for-24 here, with zero homers and ribbies. [22202041] |It's that last set of numbers, as much as anything else, that gives the Giants hope in the Series games to come. [22202042] |"I believe in the law of averages," declared San Francisco batting coach Dusty Baker after game two. [22202043] |"I'd rather see a so-so hitter who's hot come up for the other side than a good hitter who's cold." [22202044] |But the old Dodger slugger wisely offered no prediction about when good times would return to his side. [22202045] |"When it goes, you never know when you'll get it back," he said. [22202046] |"That's baseball. [22203001] |NCR Corp. reported a 10% drop in third-quarter net income, citing intense competition that caused its gross profit margins to dip. [22203002] |Net income for the quarter fell to $93.1 million from $103.1 million, roughly what analysts had expected. [22203003] |But per-share profit dropped only 2% to $1.23 a share from $1.26 a share, as the company continued its stock buy-back plan. [22203004] |Average shares outstanding dropped to 75.8 million from 82.1 million. [22203005] |Revenue fell 1% to $1.39 billion from $1.41 billion. [22203006] |The computer maker, which sells more than half its goods outside the U.S., also said the negative effect of a stronger U.S. dollar will "adversely affect" its fourth-quarter performance and "make it difficult" to better 1988 results. [22203007] |NCR said revenue declined both in the U.S. and overseas, reflecting a world-wide softening of the computer markets. [22203008] |The company, however, said orders in the U.S. showed "good gains" during the latest quarter. [22203009] |Analysts estimate those gains at 12% to 13%, a good part of it coming from large orders placed by a few of NCR's major customers. [22203010] |In addition to a general slowing of the computer industry, NCR, which sells automated teller machines and computerized cash registers, is also affected by the retail and financial sectors, "areas of the economy that have generally not been robust," notes Sanjiv G. Hingorani, an analyst for Salomon Brothers Inc. [22203011] |These factors, combined with a strong dollar, should negatively affect the current quarter's results, NCR said. [22203012] |In the year-earlier fourth quarter, NCR had profit of $149.6 million, or $1.85 a share, on revenue of $1.8 billion. [22203013] |Mr. Hingorani said he lowered his full-year estimates for 1989 to $5.35 a share from $5.50 a share. [22203014] |Revenue projections were slashed to $6.03 billion from $6.20 billion. [22203015] |Last year, NCR had net income of $439.3 million, or $5.33 a share, on $5.99 billion in revenue. [22203016] |For the nine months, the company's earnings fell 9% to $264.6 million, or $3.40 a share, from $289.7 million, or $3.49 a share. [22203017] |Revenues declined 1% to $4.17 billion from $4.19 billion. [22203018] |In New York Stock Exchange composite trading yesterday, NCR shares fell 75 cents to close at $57. [22204001] |Concerning your Sept. 19 article "Wall Street Firms Link Analysts' Pay to Performance," I'm delighted that Wall Street is finally tuning in to the hard, cold facts of the real working world. [22204002] |If the firms are serious, however, why limit the practice to the poor, maligned analysts whose ability to see into the future is fragile at best? [22204003] |Why not extend the same harsh standards to the sales force, and pay brokers a base salary with annual bonus based on how much money they made for their clients during the year? [22204004] |That should stop a lot of account-churning, and produce a stock market driven only by professional concern, careful thought and good sense. [22204005] |Now, wouldn't that be a novelty. [22204006] |Phyllis Kyle Stephenson Newport News, Va. [22205001] |Steve Clark, a Shearson Lehman Hutton Inc. trader, reported for work at 5 a.m., two and a half hours before the usual Monday morning strategy meeting. [22205002] |At Jefferies & Co., J. Francis Palamara didn't reach the office until 5:30 a.m., but then he had been up most of the night at home. [22205003] |"I had calls all night long from the States," he said. [22205004] |"I was woken up every hour -- 1:30, 2:30, 3:30, 4:30. [22205005] |People are looking for possible opportunities to buy, but nobody wants to stick their chin out." [22205006] |For many of London's securities traders, it was a day that started nervously in the small hours. [22205007] |By lunchtime, the selling was at near-panic fever. [22205008] |But as the day ended in a frantic Wall Street-inspired rally, the City breathed a sigh of relief. [22205009] |So it went yesterday in the trading rooms of London's financial district. [22205010] |In the wake of Wall Street's plunge last Friday, the London market was considered especially vulnerable. [22205011] |And before the opening of trading here yesterday, all eyes were on early trading in Tokyo for a clue as to how widespread the fallout might be. [22205012] |By the time trading officially got under way at 9 a.m., the news from Asia was in. [22205013] |And it left mixed signals for London. [22205014] |Tokyo stocks closed off a significant but less-than-alarming 1.8% on thin volume; Hong Kong stocks declined 6.5% in orderly trading. [22205015] |At Jefferies' trading room on Finsbury Circus, a stately circle at the edge of the financial district, desktop computer screens displayed the London market's major barometer -- the Financial Times-Stock Exchange 100 Share Index. [22205016] |Red figures on the screens indicated falling stocks; blue figures, rising stocks. [22205017] |Right away, the reds outnumbered the blues, 80 to 20, as the index opened at 2076.8, off 157.1 points, or 7%. [22205018] |"I see concern, but I don't see any panic," said Mr. Palamara, a big, good-humored New York native who runs the 15-trader office. [22205019] |The Jefferies office, a branch of the Los Angeles-based firm, played it conservatively, seeking to avoid risk. [22205020] |"This is not the sort of market to have a big position in," said David Smith, who heads trading in all non-U.S. stocks. [22205021] |"We tend to run a very tight book." [22205022] |Jefferies spent most of its energies in the morning trying to match buyers and sellers, and there weren't many buyers. [22205023] |"All the takeover stocks -- Scottish & Newcastle, B.A.T, DRG -- are getting pretty well pasted this morning," Mr. Smith said. [22205024] |Seconds later, a 7,500-share "sell" order for Scottish & Newcastle came in. [22205025] |For the third time in 15 minutes, a trader next to Mr. Smith left the no-smoking area to have a cigarette. [22205026] |On the screens, only two forlorn blue figures remained, but the index had recovered a few points and was off about 140. [22205027] |"Because Tokyo didn't collapse, let's pick up a little stock," Mr. Smith said. [22205028] |He targeted 7,500 shares of Reuters and punched a button to call up on his screen other dealers' price quotes. [22205029] |The vivid yellow figures showed the best price at 845 pence, ($13.27) and Mr. Smith's traders started putting out feelers. [22205030] |But the market sensed a serious buyer on a day dominated by selling, and the quotes immediately jumped to 850 pence. [22205031] |"When I want to buy, they run from you -- they keep changing their prices," Mr. Smith said. [22205032] |"It's very frustrating." [22205033] |He temporarily abandoned his search for the Reuters shares. [22205034] |By this time, it was 4:30 a.m. in New York, and Mr. Smith fielded a call from a New York customer wanting an opinion on the British stock market, which had been having troubles of its own even before Friday's New York market break. [22205035] |"Fundamentally dangerous. . . ," Mr. Smith said, almost in a whisper, ". . . .fundamentally weak . . . fairly vulnerable still . . . extremely dangerously poised . . . [22205036] |we're in for a lot of turbulence. . . ." [22205037] |He was right. [22205038] |By midday, the London market was in full retreat. [22205039] |"It's falling like a stone," said Danny Linger, a pit trader who was standing outside the London International Financial Futures Exchange. [22205040] |Only half the usual lunchtime crowd gathered at the tony Corney & Barrow wine bar on Old Broad Street nearby. [22205041] |Conversation was subdued as most patrons watched the latest market statistics on television. [22205042] |At 12:49 p.m., the index hit its low, 2029.7, off 204.2 points. [22205043] |"France opened the limit down, off at least 10% if you could calculate the index, which you couldn't," Mr. Clark, the Shearson trader, said early in the afternoon. [22205044] |"Spain is down 10% and suspended, Sweden's down 8%, Norway 11%. [22205045] |This market has been very badly damaged." [22205046] |As 2:30 p.m. -- Wall Street's opening time -- neared, Shearson traders and salesmen traded bets on how low the New York market would open. [22205047] |In the center of the trading floor, chief trader Roger Streeter and two colleagues scrambled for the telephones as soon as the New York market opened -- plummeting more than 60 points in the first few minutes. [22205048] |They saw an opportunity created by the sell-off. [22205049] |As Wall Street traders dumped American Depositary Receipts in Jaguar PLC, Mr. Streeter and trader Sam Ruiz bought them to resell in the U.K. [22205050] |Investors here still expect Ford Motor Co. or General Motors Corp. to bid for Jaguar. [22205051] |Suddenly, after about 45 minutes, the U.S. markets rallied. [22205052] |"The MMI has gone better," shouted one trader at about 3:15 London time, as the U.S. Major Markets Index contract suddenly indicated a turnabout. [22205053] |As Wall Street strengthened, the London trading room went wild. [22205054] |Traders shouted as their screens posted an ever-narrowing loss on Wall Street. [22205055] |Then, nine minutes later, Wall Street suddenly rebounded to a gain on the day. [22205056] |"Rally! Rally! Rally!" shouted Shearson trader Andy Rosen, selling more Jaguar shares. [22205057] |"This is panic buying!" [22205058] |As the London market rallied, some wondered whether the weekend of worrying and jitters had been worth it. [22205059] |The London index closed at 2163.4, its high for the day, off 70.5, or about 3.3%. [22206001] |Ambassador Paul Nitze's statement (Notable & Quotable, Sept. 20), "If you have a million people working for you, every bad thing that has one chance in a million of going wrong will go wrong at least once a year," is a pretty negative way of looking at things. [22206002] |Isn't it just as fair to say that if you have a million people working for you, every good thing that has one chance in a million of going right will go right at least once a year? [22206003] |Don't be such a pessimist, Mr. Ambassador. [22206004] |Frank Tremdine [22207001] |The House Aviation Subcommittee approved a bill that would give the transportation secretary authority to review and approve leveraged buy-outs of major U.S. airlines. [22207002] |The collapsed plan to acquire UAL Corp., parent of United Airlines, spurred quick action on the legislation, introduced Wednesday and approved by the subcommittee on a voice vote yesterday. [22207003] |The bill is expected to be taken up by the Public Works and Transportation Committee tomorrow, and a floor vote by next week will be urged. [22207004] |The measure drew criticism from the Bush administration and a parting shot from financier Donald Trump, who yesterday withdrew his takeover bid for AMR Corp., the parent of American Airlines. [22207005] |In a letter to subcommittee Chairman James Oberstar (D., Minn.), Mr. Trump criticized the bill as an explicit effort to thwart his bid for AMR, and said it contributed to the collapse of the deal. [22207006] |Elaine Chao, deputy transportation secretary, also sent a letter to express the administration's opposition to the bill "in its present form." [22207007] |Rep. Oberstar brushed off Mr. Trump's allegations as an "excuse for his own deal failing." [22207008] |He also said the fact that the other letter hadn't come from Transportation Secretary Samuel Skinner indicated there is "wiggle room" in the administration's position. [22207009] |Mr. Oberstar and other committee members repeatedly stressed that the legislation wasn't a response to any particular market situation. [22207010] |But they cited the UAL and AMR examples as reasons to move quickly to enact this legislation. [22207011] |Aides both in the House and Senate said the withdrawal of the Trump bid for AMR isn't likely to deflate efforts to push the legislation. [22207012] |"It's still on the fast track and we still want to do it," said one Senate aide. [22207013] |The bill is aimed at addressing the concern that an airline might sacrifice costly safety measures to pay off the debt incurred in a leveraged buy-out. [22207014] |Currently, the transportation secretary doesn't have clearly established authority to block mergers, but can take the drastic step of revoking the operating certificate of any carrier the official considers unfit. [22207015] |Supporters of the legislation view the bill as an effort to add stability and certainty to the airline-acquisition process, and to preserve the safety and fitness of the industry. [22207016] |In general, the bill would give the Transportation Department a 30-day review period before 15% or more of the voting stock of a major U.S. air carrier could be acquired. [22207017] |It also would require the acquiring party to notify the transportation secretary and to provide all information relevant to determining the intent of the acquisition. [22207018] |The bill would allow the secretary to reject a buy-out if sufficient information hasn't been provided, or if the buy-out is likely to weaken the carrier financially, result in a substantial reduction in size of the airline through disposal of assets, or give control to a foreign interest. [22207019] |If more information is needed, the secretary would have authority to extend the review period 20 days. [22207020] |All the witnesses, both congressmen and industry experts, expressed support for the bill in order to prevent profiteers from cashing in on airline profits at the expense of safe, cost-effective service. [22207021] |But several committee members disapproved, some backing Mr. Trump's claim that the threat of regulation caused the failure of the UAL deal and the stock-market plunge. [22207022] |One of the major concerns expressed by the dissenters was that large airlines would be prohibited from divesting themselves of smaller entities and producing independent spin-off companies. [22208001] |In a possible prelude to the resumption of talks between Boeing Co. and striking Machinists union members, a federal mediator said representatives of the two sides will meet with him tomorrow. [22208002] |"It could be a long meeting or it could be a short one," said Doug Hammond, the mediator, who called the agreement to meet a first step toward a resumption of negotiations. [22208003] |"We're encouraged that talks are scheduled again but beyond that, we have made no expression of expectations," a Boeing spokesman said. [22208004] |The Machinists union has rejected a three-year contract offer that would have provided a 10% wage increase over the life of the pact, plus some bonuses. [22208005] |Currently, average pay for machinists is $13.39 an hour, Boeing said. [22208006] |Now in its 13th day, the strike has idled about 55,000 machinists and has started to delay delivery of some jetliners. [22208007] |With a strike fund of about $100 million, the union had said it was prepared for a long strike. [22208008] |After the third week on strike, union members will begin receiving $100 a week from the fund. [22208009] |Work at Boeing continues with supervisors and other non-striking personnel manning the lines. [22208010] |And at the company's Wichita, Kan., plant, about 2,400 of the 11,700 machinists still are working, Boeing said. [22208011] |Under Kansas right-to-work laws, contracts cannot require workers to be union members. [22208012] |Boeing has declined to say how many employees are working at its giant Renton, Wash., plant. [22208013] |Union officials couldn't be reached for comment. [22209001] |DPC Acquisition Partners, a hostile suitor for Dataproducts Corp., said it intends to launch a tender offer for the computer printer maker's common stock. [22209002] |DPC, a group led by the New York investment firm Crescott Inc., also said it plans to file preliminary materials with the Securities and Exchange Commission regarding a shareholder solicitation to oust Dataproducts' board. [22209003] |DPC holds a 7.8% stake in Dataproducts and made a $15-a-share bid for the company in May, but Dataproducts management considered the $283.7 million proposal unacceptable. [22209004] |A DPC spokesman declined to elaborate on the group's new plan. [22209005] |In American Stock Exchange composite trading yesterday, Dataproducts shares jumped 62.5 cents to close at $9.375. [22209006] |Dataproducts, which had been seeking a buyer for several months, announced a restructuring plan in September and took itself off the auction block. [22209007] |The company's restructuring includes plans to split into three sectors, to phase out domestic printer manufacturing operations and to sell its New England subsidiary. [22209008] |As part of the plan, Dataproducts announced a pact to sell $63 million of its real estate holdings to Trizec Properties Inc., a unit of Canada's Trizec Corp. [22209009] |Jack Davis, Dataproducts' president, chairman and chief executive officer, said the company "is at a loss to understand DPC's intentions." [22209010] |He called today's announcement "opportunistic and disruptive" and said the company intends to proceed with its restructuring. [22210001] |Share prices plummeted across Europe yesterday in response to Friday's New York sell-off, but some issues staged a late comeback after Wall Street opened without another rout. [22210002] |European investors have further reason for optimism today, after the U.S. rebound. [22210003] |The Frankfurt Stock Exchange, which closed before the New York exchanges opened, was the hardest hit of the major European markets, with the DAX Index dropping 12.8%. [22210004] |In London, prices plummeted in early trading and were off as much as 9% before coming back strong after the New York opening to close down only 3.2%. [22210005] |West German Economics Minister Helmut Haussmann said, "In my view, the stock market will stabilize relatively quickly. [22210006] |There may be one or other psychological or technical reactions, but they aren't based on fundamentals. [22210007] |The economy of West Germany and the EC {European Community} is highly stable." [22210008] |Paris, which has been the center of speculation fever in recent weeks, also was hard hit. [22210009] |Share prices fell in Milan, Amsterdam, Zurich, Madrid and Stockholm. [22210010] |Prices in Brussels, where a computer breakdown disrupted trading, also tumbled. [22210011] |Following is a breakdown of major market activity: [22210012] |FRANKFURT: [22210013] |One of the sharpest declines came in the financial center of Europe's strongest economy. [22210014] |The DAX Index of 30 West German blue chips plunged 12.8%, a one-day record, wiping out the summer's gains. [22210015] |The index closed at 1385.72, down 203.56 points. [22210016] |By comparison, two years ago on Black Monday, the new index would have dropped 9.4%, according to a projection by the exchange. [22210017] |Investors may have reacted so strongly to Friday's U.S. stock market loss because they had vivid memories of the Frankfurt exchange's losing 35% of its value in the 1987 crash and its wake. [22210018] |This time, however, many small investors may have been hurt by acting so swiftly. [22210019] |"They all went in the wrong direction," said Andreas Insam, an investment adviser for the Bank in Liechtenstein's Frankfurt branch. [22210020] |He said he told clients to buy selected West German blue chips after they fell by about 10%. [22210021] |After the opening was delayed 30 minutes because of the crush of sell orders, Frankfurt's normal two-hour trading session was extended 75 minutes to handle the heavy volume. [22210022] |"The beginning was chaotic," said Nigel Longley, a broker for Commerzbank AG. [22210023] |"It took three-quarters of an hour before enough prices could be worked out to get a reading on the market." [22210024] |Institutional investors and bankers, many of whom spent the night before in their offices watching Far Eastern markets, were cautiously optimistic after the mild 1.8% decline in Tokyo stock prices. [22210025] |"Everybody was still confident, including most institutional investors. [22210026] |That is why everybody was a little surprised by the storm of sell orders from small private investors," said Norbert Braeuer, a senior trader for Hessische Landesbank. [22210027] |Some big institutions, including banks, began picking up lower-priced shares late yesterday, but most investors wanted to see what would happen in New York before acting. [22210028] |But even if Wall Street continues to stabilize, analysts here say the latest blow to investor confidence could inhibit a swift recovery for the Frankfurt exchange, which already was showing signs of weakness after the DAX had slipped from a 1989 high of 1657.61 on Sept. 8. [22210029] |Some of West Germany's bluest chips took some of the biggest hits. [22210030] |A 16.3% drop for Mannesmann AG and Dresdner Bank AG's 9.6% decline were especially problematic for their respective boards, whose plans for major rights issues in November could now be in jeopardy. [22210031] |Dresdner Bank last month said it hoped to raise 1.2 billion marks ($642.2 million) by issuing four million shares at 300 marks each. [22210032] |Yet yesterday's market cropped Dresdner's share price by 33 marks to 309 marks a share, leaving little incentive for investors to subscribe to the standing price unless the market recovers quickly. [22210033] |LONDON: [22210034] |Headed toward a record drop at midday, the London stock market recouped two-thirds of its losses in the wake of New York's early rally. [22210035] |The Financial Times-Stock Exchange 100 Share Index closed off 70.5 points, at 2163.4, its high for the day, after having plunged 204.2 points at 12:49 p.m. [22210036] |It was big institutions such as Norwich Union Insurance Group, Scottish Amicable Investment Managers and Standard Life Assurance Co. that spearheaded the rally. [22210037] |Attracted by low prices and encouraged by New York's performance, they scooped up equities across the board. [22210038] |Volume was 959.3 million shares, more than triple recent levels. [22210039] |PARIS: [22210040] |Late buying gave the Paris Bourse a parachute after its free fall early in the day. [22210041] |The CAC General Index ended down 5.4% at 523.6, a drop of 29.6 points from Friday. [22210042] |"There was a volatility in the market that I have never seen before," said Michel Vigier, a partner in brokerage firm Cholet Dupont. [22210043] |"When Wall Street turned around shortly after the opening, there was panic buying in Paris." [22210044] |Brokers said that as the news spread that Wall Street was moving up, traders who had called to place sell orders changed their line in mid-conversation, ordering buys instead. [22210045] |Trading was driven primarily by small investors and speculators, with large institutions waiting on the sidelines until late in the day. [22210046] |When Wall Street turned, however, the big boys entered the market, looking for bargains. [22211001] |J.P. Morgan & Co. swung to a loss in the third quarter, while NCNB Corp. reported net income more than doubled, and Security Pacific Corp. net rose 10%. [22211002] |J.P. Morgan & Co. [22211003] |J.P. Morgan, as expected, posted a $1.82 billion net loss for the quarter, reflecting the New York bank's decision last month to add $2 billion to reserves for losses on loans to less-developed countries. [22211004] |The reserve addition placed the parent of Morgan Guaranty Trust Co. among a few major U.S. banks that have covered nearly all their medium and long-term portfolios to less-developed countries with reserves. [22211005] |The latest quarter's loss equals $9.92 a share. [22211006] |In the year-earlier quarter, Morgan earned $233.6 million, or $1.25 a share. [22211007] |George M. Salem, analyst at Prudential-Bache Securities Inc., called the results "mildly disappointing." [22211008] |Excluding the $2 billion provision and allowing for the taxes Morgan paid, earnings were about 65 cents a share, Mr. Salem said. [22211009] |In New York Stock Exchange composite trading yesterday, Morgan climbed $1.50 a share to $44.125. [22211010] |Net interest income sank 27% in the quarter to $254 million from $347 million. [22211011] |The interest rate on short-term funds, which banks borrow to finance longer-term loans to customers, was "sharply higher," Morgan said. [22211012] |Morgan received $2 million of interest payments on its medium and long-term Brazilian loans; had they been accruing interest, net interest income would have been $35 million higher in the quarter, Morgan said. [22211013] |Such loans to Argentina also remain classified as non-accruing, costing the bank $10 million of interest income in the third period. [22211014] |Income from sources other than interest climbed 12% to $414 million, reflecting higher corporate-finance and other fees and gains on sales of investment securities. [22211015] |"These increases were partly offset by lower trading-related" income, the bank said. [22211016] |Non-interest expenses grew 16% to $496 million. [22211017] |NCNB Corp. [22211018] |NCNB Corp.'s net income more than doubled in the period, largely because of continued strong performance by the bank's Texas operations. [22211019] |The Charlotte, N.C., company said earnings rose to $143.6 million, or $1.45 a share, from $58.9 million, or 69 cents a share, a year earlier. [22211020] |The latest quarter included a gain of $56.1 million, or 59 cents a share, related to the purchase of the remaining 51% of NCNB Texas National Bank from the Federal Deposit Insurance Corp. [22211021] |The strong performance, however, contrasted with an unexpectedly large increase in the size of NCNB's problem loans, particularly in the Southeast. [22211022] |In the third quarter, nonperforming assets jumped to $474.1 million, or 1.43% of net loans and leases, from $232.8 million, or 1.13% in the second quarter. [22211023] |Nonperformers totaled $230.8 million, or 1.27% in the year-ago third quarter. [22211024] |Included in the increase in the most recent quarter is a $33 million loan, which NCNB said it "expects to be fully repaid, with no loss, early in the fourth quarter." [22211025] |The deterioration in credit quality offset strong loan growth of 17% in NCNB's Southeast operations, as well as a 28% growth in deposits resulting from an aggressive marketing campaign. [22211026] |The higher rates paid on deposits also helped squeeze NCNB's net interest margin in the Southeast to 3.38% from 3.80% a year earlier. [22211027] |In Big Board composite trading yesterday, NCNB jumped $3.50 a share, to $51. [22211028] |Results were released after the market closed. [22211029] |NCNB Texas National, formed from the remnants of of the failed First RepublicBank Corp. of Dallas, contributed $76.9 million to NCNB's bottom line in the third quarter. [22211030] |NCNB said its third-quarter results reflect 100% of earnings of the Texas operation since Aug. 1. [22211031] |NCNB raised some $1.9 billion in new capital during the quarter to complete the NCNB Texas purchase, and to acquire several small failed thrifts to fill out its regional franchise. [22211032] |Last week, the banking company said it purchased both Freedom Savings & Loan Association, Tampa, Fla., and University Federal Savings Association of San Antonio, Texas, for $169.4 million. [22211033] |In the first nine months, NCNB's net income climbed 65% to $310.9 million, or $3.30 a share, from $188.2 million, or $2.22 a share, a year earlier. [22211034] |Security Pacific Corp. [22211035] |Security Pacific's earnings growth slowed in the third quarter, but the Los Angeles bank holding company was still able to post a 10% increase in net income because of robust growth in residential real-estate and consumer loans. [22211036] |Net rose to $185.1 million, or $1.55 a share, from $167.9 million, or $1.47 a share, a year earlier. [22211037] |The company said the gain resulted mainly from a $54 million increase in net interest income, reflecting a 33% increase in real estate loans (mainly residential), and a 19% rise in consumer loans. [22211038] |These high-yielding loans in effect replaced some low-yielding assets such as inter-bank loans, which were allowed to decrease. [22211039] |As a result, Security Pacific's net interest margin fell only 13 basis points, a more mild decrease than some major banks outside California, which have been reporting more sluggish earnings. [22211040] |Security Pacific shares closed at $44.625, down 37.5 cents, in Big Board composite trading. [22211041] |The earnings represent a 0.89% return on assets for Security Pacific, and an 18.9% return on equity. [22211042] |The loan growth offset continuing real-estate loan losses in the depressed Arizona market. [22211043] |Security Pacific reported a 33% increase in net credit losses for the quarter, to $109 million from $81.9 million in the year-ago period. [22211044] |Nonperforming loans grew slightly to $1.75 billion at Sept. 30, from $1.7 billion a year ago. [22211045] |Security Pacific's loan-loss provision was down 22%, or $30.4 million, because it added to its foreign-debt reserve the year before. [22211046] |Non-interest income fell 6% in the quarter, mainly because of an unusual gain a year earlier from the sale of Hong Kong banking operations. [22211047] |Non-interest expense grew only 4% in the period. [22211048] |For the nine months, net rose 17% to $548.9 million, or $4.67 a share, from $469.4 million, or $4.13 a share, a year earlier. [22212001] |LIN Broadcasting Corp. said it won't take a position on a revised tender offer by McCaw Cellular Communications Inc. to buy LIN and has asked for clarification of the offer. [22212002] |The new offer, which seeks 50.3% of the cellular and broadcasting concern, is for $125 a share for 22 million LIN shares. [22212003] |McCaw's revised tender offer would require McCaw to begin an auction process in July 1994 that would buy out remaining holders at a per-share price roughly equivalent to what a third party might then have to pay for all of LIN. [22212004] |LIN is asking McCaw to clarify its tender offer, which challenges an agreement between BellSouth Corp. and LIN to merge their cellular-telephone businesses. [22212005] |BellSouth has notified LIN that it would "shortly respond to the McCaw proposal in as full and effective a manner as is warranted." [22212006] |The LIN board said holders may be misled by the provision in the McCaw proposal that "guarantees" private market value after five years for the remaining shares. [22212007] |McCaw has "no obligation to purchase and the definition of private market value is uncertain," the LIN board said. [22212008] |The board added that McCaw would be able to control LIN's operations and could, "therefore, operate LIN in a manner which could diminish its private market value and attractiveness to a third-party purchaser in five years." [22212009] |In national over-the-counter trading, LIN closed at $104.75, down $2.75. [22213001] |A group of institutional investors in Telerate Inc. said that Dow Jones & Co.'s $18-a-share offer for the electronic financial information services company is "grossly inadequate." [22213002] |In a letter filed with the Securities and Exchange Commission, the group, which holds about 4.5 million Telerate shares, or about 4.7% of the shares outstanding, said " . . . at present none of us believes an offer for less than $25 per share would be fair and some believe that $25 is too low." [22213003] |The letter was dated Oct. 6. [22213004] |In composite trading on the New York Stock Exchange, Telerate shares closed yesterday at $18.875, down 75 cents a share. [22213005] |Dow Jones, publisher of The Wall Street Journal, has launched an $18-a-share, or $576 million, tender offer to acquire the remaining Telerate shares outstanding; Dow Jones owns 67% of Telerate. [22213006] |Telerate has rejected the offer, which expires Nov. 3. [22213007] |The group includes Putnam Cos. and various affiliates based in Boston; Wells Fargo Bank, San Francisco; the California Public Employees Retirement System, Sacramento, Calif., and T. Rowe Price Associates Inc., Baltimore. [22213008] |Among other issues, the group's letter said it has "concerns as to whether Dow Jones's offer meets the applicable requirements of procedural fairness." [22213009] |A spokesman for Dow Jones said he hadn't seen the group's filing, but added, "obviously Dow Jones disagrees with their conclusions. [22213010] |Our offer is to buy any and all shares tendered at $18 a share. [22214001] |U.S. Trade Representative Carla Hills said the first dispute-settlement panel set up under the U.S.-Canadian "free trade" agreement has ruled that Canada's restrictions on exports of Pacific salmon and herring violate the accord. [22214002] |Mrs. Hills said the U.S. and Canada have until Nov. 13 to resolve the dispute. [22214003] |If a solution isn't reached by then, she said, the U.S. would have the right to suspend some trade concessions to Canada equivalent in value to the losses suffered by U.S. fish-processing companies in Alaska and the Pacific Northwest. [22214004] |However, in Ottawa, Canadian Trade Minister John Crosbie said the dispute-settlement panel accepted the "legitimacy of Canada's position on the use of these landing requirements to conserve and manage these important fisheries." [22214005] |Questioned about the seeming contradiction in the U.S. and Canadian government views of the panel's report, an aide for Mrs. Hills said the panel had clearly ruled that the Canadian trade restrictions "are illegal." [22214006] |The U.S. trade representative declined to put a dollar estimate on the losses resulting from the Canadian export restrictions. [22214007] |Canada initially had an export prohibition that was replaced by regulations requiring that such fish had to be brought ashore in British Columbia by commercial fishermen prior to export. [22214008] |This action was defended by the Canadian government on conservation grounds. [22214009] |Mrs. Hills said yesterday that the dispute-settlement panel rejected this Canadian government argument. [22214010] |"We fully expect that Canada will comply with the panel's ruling" that the "landing requirement" also must be ended, she said. [22214011] |Earlier, an international panel set up under the rules of the General Agreement on Tariffs and Trade in Geneva determined that the original Canadian fish-export restrictions violated GATT rules. [22214012] |Mrs. Hills said the U.S. won't accept any delays after Nov. 13 because U.S. fish-processing firms enter into contracts in the fall to purchase the next season's catch. [22214013] |She said the Canadian restrictions must be removed before such contracts are concluded. [22215001] |Idle Thought [22215002] |To spend a carefree, idle day, When duty calls, to pay no heed, To while the precious hours away -- Character is what you need. [22215003] |-- May Richstone. [22215004] |Telecussed [22215005] |The guy who throws an intercept 'Cause his receiver slips Should somehow be advised that we At home can read his lips. [22215006] |-- Dick Emmons. [22216001] |BancOklahoma Corp. said it completed a restructuring agreement previously agreed to by the Federal Deposit Insurance Corp., creditor banks and subordinated debenture holders. [22216002] |The plan would permit the bank holding company to retire its bank and debenture obligations through exchanges of cash and equity. [22216003] |The FDIC, which in 1986 provided $130 million in open-bank assistance to BancOklahoma's Bank of Oklahoma, Tulsa, unit will continue to maintain $90 million in preferred stock in the Tulsa bank unit. [22216004] |In exchange for the other $40 million, the FDIC will receive additional warrants entitling it to buy 60% of BancOklahoma's common stock outstanding, up from the 55% option the FDIC received under terms of the 1986 capital infusion. [22216005] |In exchange for the $76 million they are owed, creditor banks will receive 3.9 million shares of BancOklahoma common stock and the proceeds from the future sales of four subsidiary banks to private buyers, the bank holding company said. [22216006] |Also under the agreement, debenture holders will get one million shares of common stock in exchange for $7.7 million in debentures and holders of BancOklahoma's series A preferred stock will receive 1.25 shares of common stock for every share of preferred they own, the company said. [22217001] |Bear Stearns's chief economist, Lawrence Kudlow, in the Sept. 29 issue of the firm's Global Spectator: [22217002] |Were it true that a weak currency paves the way for trade surpluses, then presumably Argentina would be the center of today's global economy. [22218001] |BSN Corp. said it will begin an offer tomorrow to exchange up to one million of its common shares and all of its $16.6 million in 7 3/4% convertible debentures due 2001 for a package of new debt and common stock warrants. [22218002] |Under terms of the offer, the sporting goods maker will swap $9 face amount of 9 1/4% subordinated notes due 1996 and one warrant for each common share. [22218003] |Each warrant allows the holder to buy one BSN share for $10.75 a share at any time over the next seven years. [22218004] |BSN currently has 4.6 million common shares outstanding. [22218005] |BSN also is offering $850 face amount of new notes and 64 common-stock warrants for each $1,000 face amount of its convertible debt outstanding. [22218006] |The company said it can redeem the warrants at its option for $1 each. [22218007] |The offer isn't contingent on a certain amount of debt or stock being exchanged. [22218008] |BSN said it is making the offer to shrink its capital and increase shareholder value. [22218009] |If all the bondholders and holders of one million common shares accept the offer, BSN will increase its debt by $9 million, but it also will recognize a $2 million gain from retiring the old debt, said Michael J. Blumenfeld, president. [22218010] |"We have sufficient cash flow to handle that," he said. [22218011] |The offers are scheduled to expire in mid to late November. [22219001] |Merrill Lynch & Co.'s net income dropped 37%, while Bear Stearns Cos. posted a 7.5% gain in net, and PaineWebber Group Inc.'s profit fell, but would have risen without a special gain a year ago. [22219002] |At Merrill Lynch, third-period net was $41 million, or 34 cents a share, down from $65.6 million, or 58 cents a share, a year ago. [22219003] |Total revenue reached $2.83 billion, up 10% from $2.57 billion. [22219004] |The firm's drop in net reflected weaker revenue in transactions for its own account -- a decline of 19% to $314.6 million on reduced revenue from trading fixed-income securities. [22219005] |Investment banking revenue fell 22% to $296.6 million on fewer equity and municipal underwritings. [22219006] |Merrill Lynch's commission revenue grew 21%, however, to $462.8 million, on higher share prices and volume and on strong sales of mutual funds. [22219007] |Revenue derived from interest and dividends jumped 30% to $1.4 billion. [22219008] |Asset-management fee revenue grew 12% to $151 million. [22219009] |The brokerage also reported a loss of $2.2 million from the discontinued operations and disposal of its Fine Homes International Limited Partnership real-estate subsidiary. [22219010] |Bear Stearns said net in the first quarter ended Sept. 29 reached $22.1 million, or 23 cents a share, from $20.5 million, or 20 cents a share, in the year-earlier quarter. [22219011] |Gross revenue rose 21% to $580.4 million from $478.9 million. [22219012] |Profit from trading for its own account dropped, the securities firm said. [22219013] |Investment banking revenue climbed 25%, while commission revenue advanced 31% on a stronger retail market. [22219014] |Bear Stearns is the holding company for Bear, Stearns & Co., the investment banking and brokerage firm. [22219015] |In New York Stock Exchange composite trading yesterday, Bear Stearns shares closed at $13.625, down 25 cents. [22219016] |Separately, PaineWebber posted net income for the third quarter of $16.8 million, or 41 cents a share, reflecting a "broad-based improvement" in the company's core businesses. [22219017] |Retail profit surged, but the company said it was only a "modest contributor" to third-quarter results. [22219018] |A year ago, net at the New York investment banking firm was $20.9 million, or 50 cents a share, including a special pretax gain of $46.3 million from the sale of the company's interest in National Car Rental Systems Inc. [22219019] |Revenue was $444.9 million, including net interest, down slightly from $450.7 million. [22219020] |In Big Board composite trading yesterday, PaineWebber closed at $18.50, up 75 cents. [22220001] |Seafirst Corp. said it signed an agreement with builder Martin Selig to purchase its headquarters building, the Columbia Seafirst Center, for $354 million. [22220002] |Purchase of the 76-story structure is subject to execution of a definitive agreement, approval by the boards of Seafirst and its parent company BankAmerica Corp., and approval by regulators. [22221001] |The market upheaval apparently hasn't triggered any cash crunch -- yet. [22221002] |Individual investors, investment firms and arbitragers who speculate in the stocks of takeover candidates can suffer liquidity and payment problems when stocks dive; those investors often borrow heavily to buy their holdings and use the stocks as collateral for loans. [22221003] |But several large banks said yesterday they detected no signs of unusual demand for credit that would signal such difficulties. [22221004] |"We're seeing nothing out of the ordinary," said one official at a Top 10 bank. [22221005] |"That's good news, because we all swim in this water." [22221006] |Added another executive at a big bank: "We were all a little goosey over the weekend trying to forecast what would happen {Monday}, but it's been very quiet. [22221007] |Now, as for tomorrow, hell, who knows? [22222001] |What happened Friday shows that financial markets are not yet sufficiently coordinated to handle another meltdown in prices. [22222002] |No fiddling with systems and procedures will ever prevent markets from suffering a panic wave of selling. [22222003] |But markets can operate with greater or lesser efficiency. [22222004] |After the 1987 plunge, markets agreed that it would be wise to halt trading whenever panic conditions arose. [22222005] |The New York Stock Exchange adopted two specific circuit breakers: If the Dow Jones index falls 250 points in a day, the exchange will halt trading for one hour; if the decline hits 400 points, the exchange will close for an additional two hours. [22222006] |The rationale is that an interruption of trading will allow investors to reconsider their strategies, calm sellers and lead buyers to enter the market at indicated new price levels. [22222007] |It is impossible to know whether that theory is realistic. [22222008] |A temporary cessation of trading may indeed discourage a selling panic from feeding on itself. [22222009] |But there is also the possibility that shutting down markets will intensify fears and cause an even more abrupt slide in prices. [22222010] |What happened Friday was the worst of all worlds. [22222011] |The futures exchanges followed their own pre-set circuit breakers and shut down at about 3 p.m. for 30 minutes, after the Standard & Poor's 500 stock index had fallen 12 points, or about 100 points on the Dow Jones index. [22222012] |Options markets stopped trading in many securities. [22222013] |The New York Stock Exchange, under its own rules, remained open. [22222014] |With nowhere else to go, sellers, and particularly program traders, focused all their selling on the New York Stock Exchange. [22222015] |As liquidity on that market weakened, prices fell sharply. [22222016] |Had the futures and options markets been open, additional liquidity would have been provided and the decline, most probably, would have been less intense. [22222017] |At 3:30, after intense telephone negotiations between the trading markets and Washington, the futures exchanges reopened. [22222018] |Futures trading, however, was halted altogether at 3:45, after the futures markets had dropped an additional 30 points, which is the daily limit for price declines. [22222019] |At this point, the options markets also shut down and once more left all sales to be handled by the New York Stock Exchange. [22222020] |It is time to recognize that the New York Stock Exchange, the futures markets and the options markets, though physically separate, have actually become so closely intertwined as to constitute one market effectively. [22222021] |Traders can vary their strategies and execute their orders in any one of them. [22222022] |It therefore makes no sense for each market to adopt different circuit breakers. [22222023] |To achieve maximum liquidity and minimize price volatility, either all markets should be open to trading or none. [22222024] |Synchronized circuit breakers would not have halted the slide in prices on Friday, but they probably would have made for smoother, less volatile executions. [22222025] |It's time for the exchanges and the Securities and Exchange Commission to agree on joint conditions for halting trading or staying open. [22222026] |Let's not have one market shut down for 30 minutes when the Dow declines 100 points and another shut down for an hour after a 250-point decline. [22222027] |The need for hurried last-minute telephone negotiations among market officials will disappear once rules are in place that synchronize circuit breakers in all markets. [22222028] |The new circuit breakers, if they are to be applied at all, will require that futures and options trading continue as long as the New York Stock Exchange remains open. [22222029] |The rules should be established by agreement of the officials of all affected exchanges acting under the oversight and with the approval of the government regulatory agencies. [22222030] |Should the SEC and the Commodities Futures Trading Commission (which, with the SEC, regulates the Chicago stock-index markets) be unable to agree, the issue may have to be resolved by decision of the Treasury secretary. [22222031] |In many ways, our financial markets are better prepared today to handle a decline than they were two years ago. [22222032] |The New York Stock Exchange now has the capacity to handle a volume of nearly a billion shares a day. [22222033] |Telephone service has been improved for customers trying to reach their brokers, and specialists -- who I believe should stay, despite the urgings of some post-crash critics -- have larger capital positions. [22222034] |(Of course, specialists' actions alone can never prevent a major crack in stock prices. [22222035] |Witness the fact that trading in some stocks closed early Friday and opened late Monday because of an excess of sell orders.) [22222036] |But the task of improving market performance remains unfinished. [22222037] |Mr. Freund, former chief economist of the New York Stock Exchange, is a professor of economics at Pace University's business school in New York. [22223001] |A UNIFIED EUROPE poses labor problems and prospects for U.S. firms. [22223002] |The "social dimension" -- worker concerns -- of the European Community's plan to open its internal borders in 1992 could set the effort "off the rails" if not done reasonably, says General Electric senior vice president Frank Doyle. [22223003] |U.S. companies wanting to expand in Europe face "tough pressure" from unions in nations such as West Germany, which play a big consulting role in management decisions, he says. [22223004] |FMC Corp. and Baxter International say unions also won't like plant relocations and needed restructuring, which means layoffs. [22223005] |Many employers have already begun moving to southern countries such as Spain and Italy, where wages are low and unions are weaker; demand for trained labor and managers will rise there, FMC says. [22223006] |Pfizer, Fluor and GE see big "EC 92" pluses: a push for job training and ease in moving and finding workers. [22223007] |CLUBBING A FAN wasn't the Baltimore Orioles' fault. [22223008] |So said a federal judge, in a case involving two players for the minor league Bluefield, Va., Orioles, a Baltimore farm team. [22223009] |The players were heckled by a patron during a July 4, 1988, game with the Martinsville Phillies. [22223010] |Like its parent that year, "Bluefield was not having a good year," the judge said. [22223011] |After the game ("Bluefield lost, 9-8, stranding three runners in . . . the ninth," he noted), trouble began. [22223012] |More taunting in the parking lot, the players said, led to a fight. [22223013] |The fan said he was punched and kicked by one player and that the other broke his jaw with a baseball bat. [22223014] |The judge dismissed the fan's suit against the team, however, ruling the Orioles innocent of negligent hiring, and not responsible for a fight that was outside the players' employment. [22223015] |PROPOSALS ARISE for coping with the shortage of nurses. [22223016] |An Association of Academic Health Centers report urges freeing nurses from duties that don't require special skills. [22223017] |It also recommends better retirement and day-care benefits, and basing pay on education, experience and nurses' demanding work schedules. [22223018] |But it opposes an American Medical Association proposal for creating a "registered care technologist," as "potentially divisive"; it says the job would entail an unwanted new doctor's "bedside" extension. [22223019] |Over a third of 618 hospitals surveyed by consultant Hewitt Associates use a "clinical ladder," basing advancement on performance and education. [22223020] |Many also use recruiting bonuses, tuition reimbursement, loan repayment or child-care help. [22223021] |Some give lump-sum incentives. [22223022] |MRA Staffing Systems signs up nurses for paid travel, promising annual income up to $50,000 and free or subsidized housing. [22223023] |TREATING EMPLOYEES with respect is crucial for managers, says consultant Hay Group after surveys of a million workers. [22223024] |It's in their top five "work values." [22223025] |Fully 80% of employees who say their bosses treat them with respect, but only a third of those who don't feel respected say they're satisfied with where they work. [22223026] |SPRUCING UP THE DIGS: About 200 employees of the Maryland Department of Economic and Employment Development for four months painted walls, polished and carpeted floors, bought plants, cleaned windows and blinds, and hung pictures at the agency's Baltimore office. [22223027] |The 3,000 hours of work will save the state $55,000. [22223028] |CURBING WAGE BOOSTS will get high priority again in 1990 collective bargaining, a Bureau of National Affairs survey of 250 companies with pacts expiring next year indicates. [22223029] |Despite labor-shortage warnings, 80% aim for first-year wage increases of under 4%; and 77% say they'd try to replace workers, if struck, or would consider it. [22223030] |TEMPORARY WORKERS have good educations, the National Association of Temporary Services says; its survey of 2,508 such employees shows 82% with more than a high-school education, and 31% with college degrees. [22223031] |About 12% have retired from a full-time job, while 54% were asked to stay on full time. [22223032] |HOME-SALE LOSSES rise, but they're often covered by employers. [22223033] |But they search for ways to limit the damage. [22223034] |A third of 439 companies surveyed by the Employee Relocation Council report a rise in 1988 sales losses over 1987. [22223035] |About 72% reimburse for all or some losses. [22223036] |Since 1984, more companies give sales-loss aid, as many real-estate values depreciated, the council says. [22223037] |RJR Nabisco pays up to $30,000 of losses, including improvements. [22223038] |Goodrich won't ensure loss coverage, but will prevent a "catastrophic loss"; it has given some employees the full purchase price when values fell from concern over dangers posed by a disposal site. [22223039] |Federal Express, Dow Chemical, Ford and National City Corp. will buy the home or let the worker sell to an outside firm, but usually won't cover a loss. [22223040] |Since 1984, firms offering prepurchase house appraisals, to deter overpaying, rose to 40% of those the council polled, from 28%. [22223041] |THE CHECKOFF: The National Academy of Engineering gives two inventors of the semiconductor microchip a $350,000 achievement award. . . . [22223042] |Now, that's reactionary: Letter Carriers union president Vincent Sombrotto accuses Philadelphia postmaster Charles James of "12th century . . . oppressive management tactics. [22224001] |Yesterday was, in the words of New York Stock Exchange Chairman John J. Phelan Jr., just your "reasonably normal, 400 million-share, up 88-points day." [22224002] |When it was all over and stocks had staged a huge recovery, Big Board officials were self-congratulatory about how well the day had gone. [22224003] |They said the exchange's trading procedures, personnel, equipment and links with other exchanges couldn't have performed better. [22224004] |"We had no operating problems at all," Mr. Phelan said after the market closed. [22224005] |"All the things that we set up to slow down the process, to let people know that the market was in an extreme position, worked extremely well." [22224006] |Prices for the 416.3 million shares that changed hands during the session were carried on the exchange's trading tape with barely a delay, officials said. [22224007] |While reaching blockbuster proportions yesterday, the volume was still well within the 600 million-share capacity that the exchange has said it can handle daily since beefing up its computers after the October 1987 crash. [22224008] |The so-called circuit breakers devised by the Big Board and the Chicago Mercantile Exchange to quell free falls in stock and futures prices weren't triggered yesterday because the markets were higher for most of the day. [22224009] |Despite traders' complaints, Mr. Phelan said the links with the Chicago futures market worked as planned in Friday's rout to provide a cooling-off period. [22224010] |Of greater help, the Big Board chairman said, was the "natural circuit breaker" of the weekend, that provided a breathing period that "brought rationality back to the market. [22225001] |Chicken Chains Ruffled By Loss of Customers [22225002] |FAST-FOOD chicken chains, faced with a worsening business slump, are struggling to hatch some new marketing strategies. [22225003] |The Crest Report, which tracks consumer purchases, says customer traffic at chicken restaurants fell 10% in the second quarter, while the overall fast-food customer count was down 2%. [22225004] |Chicken business is off largely because of more competition from grocery-store convenience food, home-delivered pizza and other takeout fare, says a spokesman for the report, a publication of NPD Group, a market research firm in Port Washington, N.Y. [22225005] |The loss of more customers is the latest in a string of problems. [22225006] |Church's Fried Chicken Inc. and Popeye's Famous Fried Chicken Inc., which have merged, are still troubled by overlapping restaurant locations. [22225007] |Chicken chains also are feeling more pressure from McDonald's Corp., which introduced its McChicken sandwich this year and recently tested the sale of individual pieces of chicken. [22225008] |New management at Kentucky Fried Chicken, a unit of PepsiCo Inc., has fought back with new medium and large chicken sandwiches for the lunch crowd. [22225009] |And the chain is testing products that aren't fried, such as "char-grilled" chicken, to try to win health-conscious consumers. [22225010] |Kentucky Fried Chicken also is testing home-delivery of chicken, which could be a hit with stay-at-home diners. [22225011] |But some fast-food industry analysts say problems with keeping chicken warm and fresh must be solved first. [22225012] |A Kentucky Fried Chicken spokesman, however, disputed the notion that the delivery service experienced problems in some markets where testing has been discontinued. [22225013] |He says the test is continuing in Chicago, Columbus, Ohio, and a few other cities. [22225014] |The advertising industry is buzzing with rumors that Kentucky Fried Chicken will drop Young & Rubicam and seek a new ad agency. [22225015] |But the company declines to comment. [22225016] |Emanuel Goldman, a PaineWebber Inc. analyst, predicts Kentucky Fried Chicken will post an 11% drop in 1989 net income. [22225017] |"They've been laggard," he says, "but they'll have to become more aggressive." [22225018] |Reluctant Advertisers Try Soft-Sell Spots [22225019] |CALL IT un-advertising. [22225020] |Pittsburgh consultant David Bear is selling a soft approach to clients who want exposure yet shun pushy ads. [22225021] |His ploy: 60-second radio spots that offer helpful hints. [22225022] |The only plug for the sponsor is a brief mention at the end of the spot. [22225023] |The messages resemble the Business Traveler, a daily dose of travel tips developed by Mr. Bear and sponsored by travel agencies in several major cities. [22225024] |New un-advertisers include Burt Hill Kosar Rittlemann Associates, a Butler, Pa., architectural firm. [22225025] |Its radio series features such spots as "Floodlights: Evening Wear for Urban Structures" and "Building a Place to Park." [22225026] |A harder sell, says John Kosar, the firm's president, would "detract from the profession." [22225027] |Hospitals have signed up to use the messages to promote fundraisers, and Equitable Gas Co. is considering the format to offer energy tips to consumers. [22225028] |But such spots can be too soft. [22225029] |"There's always a risk of lost messages," says John Fitzgerald, chairman of Ketchum Advertising USA, which created similar radio spots for Pittsburgh National Bank. [22225030] |"It's a question of how much credibility you gain for the possible loss of recognition." [22225031] |Retailer Sees Pitfalls In Environmental Push [22225032] |HERE'S a retailer that's getting tough in the push for environmentally safe packaging and products. [22225033] |Big Bear Supermarkets Inc., a grocery chain based in San Diego, plans to display shelf cards and distribute pamphlets recommending products deemed safe for the environment. [22225034] |The choices will be based on research by the San Diego Environmental Health Coalition and will include products like Murphy's Oil Soap and other noncorrosive cleaners. [22225035] |But the chain is quickly realizing the pitfalls of such endorsements. [22225036] |For example, it recommends nonchlorinated dishwasher detergent and puts Sunlight on its environmentally safe list. [22225037] |That doesn't thrill Procter & Gamble Co., maker of Cascade dishwasher detergent. [22225038] |A company spokesman questioned the validity of the list, noting that chlorine is present in all major dishwasher detergents. [22225039] |In fact, Lever Bros. confirms that its Sunlight brand does contain chlorine bleach, even though it isn't listed on the label for the powder version. [22225040] |Thomas G. Dahlen, Big Bear's executive vice president, said the chain is still reviewing its product list to avoid such problems. [22225041] |"Our intent is to promote the best alternative," he says. [22225042] |"And it's important that we be accurate." [22225043] |But in the end, customers' wishes are what will prevail. [22225044] |Big Bear doesn't care for disposable diapers, which aren't biodegradable. [22225045] |Yet parents demand them. [22225046] |Says Mr. Dahlen, "We'll still be forced to sell items we might not philosophically agree with." [22225047] |Odds and Ends [22225048] |NEATNESS does count -- at least in the grocery store. [22225049] |A study by Safeway's Scanner Marketing Research shows soap sales climbed 5% when bars were neatly stacked on shelves instead of dumped in a wire basket. . . . [22225050] |Which celebrity endorsers are most believable? [22225051] |For the third year in a row, consumers voted Bill Cosby first and James Garner second in persuasiveness as spokesmen in TV commercials, according to Video Storyboard Tests, New York. [22225052] |Michael J. Fox replaced Bruce Willis in third place; Cher placed fourth for the second time. [22226001] |Health and Human Services Secretary Louis Sullivan has chosen Antonia Novello to be the next surgeon general, Bush administration officials said. [22226002] |If she is nominated by President Bush and confirmed by the Senate, Dr. Novello would succeed C. Everett Koop, who rattled liberals and conservatives alike with his outspoken views on a range of health issues. [22226003] |Dr. Novello, an expert on pediatric kidney diseases, is deputy director of the National Institute of Child Health and Human Development. [22226004] |She has also served on several task forces on acquired immune deficiency syndrome. [22226005] |Dr. Novello's office said she wouldn't talk with reporters, and it refused to release any information about her. [22226006] |The newsletter Medicine & Health, which first disclosed her selection by Dr. Sullivan, said she is 44 years old and she studied at the University of Puerto Rico School of Medicine. [22227001] |The continuing series of HUD scandals is a sadly predictable result of pork-barrel politics. [22227002] |Nevertheless, lobbies such as the National Association of Home Builders (NAHB) continue to pressure Capitol Hill for more special-interest spending. [22227003] |Kent Colton, NAHB executive vice president, argues that the U.S. faces a multifaceted housing crisis -- reduced affordability of homes for first-time buyers, increased homelessness, and lower apartment construction rates -- that will be "very difficult" to solve "without expanded federal resources." [22227004] |There's nothing unusual about business groups pushing for more government spending. [22227005] |But the NAHB was created in 1943 out of an organization that made its name fighting a Roosevelt administration proposal to take over all defense housing production. [22227006] |Through the years the association has been an active member of the taxpayer's coalition, pushing for such initiatives as the balanced-budget amendment. [22227007] |Yet on matters close to, er, home . . . [22227008] |"The HUD budget has dropped by more than 70% since 1980," argues Mr. Colton. [22227009] |"We've taken more than our fair share. [22227010] |I wouldn't have a problem if other programs had taken a similar hit." [22227011] |But NAHB support for subsidies is not related to the current housing crunch; over the years the NAHB has backed a host of public programs. [22227012] |It once pushed for a national housing production goal set by the federal government and has regularly advanced anti-recession housing measures. [22227013] |Moreover, explains one HUD official, the NAHB remains susceptible to internal pressure from members that specialize in subsidized production. [22227014] |The association is pushing an extensive and expensive wish-list, which would substantially boost spending above the current level of more than $15 billion annually. [22227015] |It would like to peg the ceiling on Federal Housing Administration mortgage guarantees to 95% of the median price in a particular market, instead of limiting it to $101,250; reduce (or even eliminate) FHA down-payment requirements and increase the availability of variable-rate mortgages; expand the Veterans Affairs Department loan guarantee program; provide "adequate" funding for the Farmers Home Administration (FmHA); increase federal funding and tax incentives for the construction of low-income and rental housing, including $4 billion in block grants to states and localities; and "fully fund" the McKinney Act, a $656 million potpourri for the homeless. [22227016] |Direct federal subsidies for housing construction have proved intolerably expensive in the past, and inevitably are twisted to the benefit of well-connected developers and lobbyists, as demonstrated by the ongoing HUD scandal, or congressmen. [22227017] |Indirect subsidies, through the FHA, for instance, are little better. [22227018] |Though Mr. Colton says expanding FHA lending would result in "no cost to the government," the mere diversion of funds from other parts of the economy and from other forms of housing (such as low-income) to the single-family home market would result in a major expense. [22227019] |More important, housing programs run by HUD, the VA, and FmHA are awash in red ink. [22227020] |The FHA alone lost $4.2 billion in fiscal 1988; the government's equity in the agency, essentially its reserve fund, fell to minus $2.9 billion. [22227021] |The federal government has had to pump in $2.28 billion into the VA housing program since 1984 to keep the fund afloat and the VA requested an additional $120 million for the fiscal year just ended. [22227022] |All told, the federal government already guarantees more than $900 billion of mortgages. [22227023] |In its nicely produced publication "Where Will Our Children Live?" the NAHB does acknowledge that "of course, the full measure of housing affordability cannot be provided by the federal government." [22227024] |It points to the pernicious impact of local government regulation, particularly zoning and building fees, which pushes the price of housing out of the reach of low- and middle-income people. [22227025] |But while the NAHB has suggested actions that states and localities should take to reduce regulatory barriers, the association has proposed no activist legislative program -- comparable to, say, its detailed request for more federal subsidies -- to eliminate counterproductive controls. [22227026] |The association, a majority of whose 156,000 members build fewer than 25 units a year, is like many other business lobbies. [22227027] |Explains Sheila MacDonald of the National Taxpayers Union: "It treads in two worlds. [22227028] |The builders like the subsidies, but at the same time they tend to be fiscal conservatives in terms of major issues, such as the balanced-budget amendment." [22227029] |Unfortunately, the organization's desire for pork tends to override its commitment to overall fiscal responsibility. [22227030] |Two years ago when the NAHB lobbied for the $19 billion omnibus housing bill, the organization "basically dropped out of the taxpayers' coalition," says Ms. MacDonald. [22227031] |As Mr. Colton of the NAHB acknowledges: "Government is not going to solve the problem. . . . [22227032] |The real key is to have the economy working and interest rates down." [22227033] |More money for HUD will increase the deficit and destabilize the economy; more money to municipalities that are wrecking their local housing markets will further insulate them from the destructive effects of their policies. [22227034] |Is this what the home builders want? [22227035] |Mr. Bandow is a Cato Institute fellow. [22227036] |(See related story: "And Bills to Make Wishes Come True" -- WSJ Oct. 17, 1989. [22228001] |In an attempt to give new momentum to European Community plans for a single currency, EC government leaders are likely to agree to set a date for starting formal talks on amending the EC's founding Treaty of Rome. [22228002] |According to diplomatic sources in Brussels, most EC leaders agree that talks should begin in the second half of 1990, and will make a declaration on that during a summit meeting in Strasbourg, France, on Dec. 8 and 9. [22228003] |The only strong opposition to changing the EC treaty comes from British Prime Minister Margaret Thatcher, who is opposed to creating a single EC currency. [22228004] |But the process of convening the intergovernmental conference doesn't require unanimity. [22228005] |Setting a date to start treaty negotiations has no legal significance in itself, but could be viewed as an important psychological push. [22228006] |French President Francois Mitterrand fought to set a date for the conference during the EC summit in Madrid last June, but the move was scuttled because of opposition by Mrs. Thatcher and West German Chancellor Helmut Kohl. [22228007] |Diplomatic sources said Mr. Kohl may now agree to set a date for the conference to make it clear that West Germany is still committed to EC unity. [22229001] |The latest crewcut in the equities markets reminds me of the joke T. Boone Pickens tells about the guy who was run over by the parade. [22229002] |When asked "What went wrong?" the unfortunate victim replied, "It was a combination of things." [22229003] |And so it was on Gray Friday. [22229004] |The grand marshal of this parade would appear to have been excess leverage. [22229005] |Even if that is so, however, it's probably the case that no barriers should have been erected to stop the procession before the end of the rout(e). [22229006] |The ceremonies began Friday afternoon when word spread that the UAL buy-out was collapsing. [22229007] |Although the union-bidder expects to patch together a substitute offer, consisting of less cash, the failure to get cash from Japanese and American banks confirmed a growing fear among arbitragers that the pageant of high-leverage takeover deals is ending. [22229008] |Lots of other entries made up the parade, of course -- notably a surprisingly large increase in producer prices, signalling Federal Reserve tightness; and the Bush administration's (temporary?) defeat in trying to lower the capital-gains tax. [22229009] |As usual, few favorable reviews were heard for that ever-present marching band of program traders, although most serious studies suggest they only play the music that others write. [22229010] |What really spooked the crowds along Wall Street, however, was the sudden concern that, whatever the reason, the pool of debt capital is drying up. [22229011] |Gray Friday reflects a panic mainly by the takeover arbitragers, rather than the small investor, as their highly margined investments in the "deal" stocks are jeopardized by the unexpected drying up of the lubricant for deal financing. [22229012] |Deal stocks led the market down as they absorbed the heaviest losses. [22229013] |UAL, which triggered the slide, opened Monday at $224, down about 20% from Thursday's close. [22229014] |AMR opened Monday at $80, down nearly 20% from Thursday's close. [22229015] |(Both took further hits yesterday.) [22229016] |Hilton lost 20% on Friday; Paramount lost almost 11%. [22229017] |A careful look reveals that where deal financing has been secured, the target's stock price was not affected on Friday. [22229018] |The multibillion-dollar prospects, where the bidder must line up a consortium of banks and/or issue billions in high-yield debt, were where the damage was concentrated. [22229019] |The market for so-called junk bonds has been setting the stage for Friday's dramatic march for several weeks. [22229020] |The growing financial difficulties of recent high-leverage restructurings or takeovers, such as Resorts International, Integrated Resources, and Campeau's retailing empire, have cast a pall over the entire market for high-yield securities. [22229021] |Investors have reacted by ignoring recent efforts to float junk bonds by Ohio Mattress and by forcing Ramada to postpone indefinitely its planned junk-bond sale and restructuring. [22229022] |As a result, high-yield mutual funds have declined across the board and the many firms planning to sell $11 billion in junk bonds before year-end are experiencing anxious times. [22229023] |These are all market excesses (putting aside the artificial boosts that the tax code gives to debt over equity), and what we've seen is the market reining them in. [22229024] |Of course, Washington hadn't been silent in the days leading up to the debacle, and its tendency to meddle in the leverage equation remains a troublesome prospect, but those preliminary steps shouldn't distract us from the basic market fundamentalism that was at work on Friday. [22229025] |If it is correct to find that concerns over corporate debt and LBOs caused Gray Friday, what are the implications for policy makers? [22229026] |After all, the stock market's response to the collapse of the UAL deal might be taken to confirm the anti-debt direction of regulators. [22229027] |Is this a case where private markets are approving of Washington's bashing of Wall Street? [22229028] |Absolutely not. [22229029] |To the extent that Friday's sell-off reflected a sudden reappraisal of the excesses of leverage, the message is that Wall Street and the private markets are fully capable of imposing the appropriate incentives and sanctions on corporate behavior. [22229030] |The national economic interests are much better served allowing the private interests of bankers and investors be the ultimate judges of the investment quality of various LBO deals and leveraged restructurings. [22229031] |The recent difficulties in the junk-bond markets and the scarcity of bank capital for recent deals underscores the wisdom of letting the free markets operate. [22229032] |If takeover premiums become excessive, if LBO dealmakers become too aggressive, then the private market will recognize these problems more quickly and accurately than will policy makers, and the markets will move with lightning speed to impose appropriate sanctions. [22229033] |Yes, the broader exchanges got caught up in the spiral, but they rode the tiger up all year. [22229034] |Not surprisingly, he sometimes bites. [22229035] |The arbitragers and takeover initiatiors got killed on Gray Friday, while the besieged managers of prospective targets cheered lustily. [22229036] |If you identify with the besieged managers, you must concede that speedy and effective relief from the excesses of the takeover market is more likely to come from the marketplace than from Washington. [22229037] |If you side with the arbitragers and raiders, you clearly have more to fear from private investors than from regulators, although the Delaware courts should never be underestimated. [22229038] |The truth is, Washington understands politics better than economics. [22229039] |Although the average citizen is probably not harmed too much from Washington's rhetorical war against Wall Street regarding excessive financial leveraging, actual legislation would probably impose considerable harm. [22229040] |Any such attempt to distinguish "good debt" from "bad debt," or to draw the line at a particular industry, such as the airlines, is likely to blunt the spur that the proper amount of leverage provides both to equity markets and economic efficiency in general. [22229041] |Far better for policy makers to concentrate on the war against drugs, Panama and the deficit, all of them parades that seem never to end. [22229042] |Mr. Jarrell, former top economist at the Securities and Exchange Commission, teaches at the University of Rochester's Simon Business School. [22230001] |Tokyo share prices rebounded Tuesday morning, with the Nikkei index of 225 selected stocks rising 618.69 points to close the morning session at 35087.38. [22230002] |The index slid 647.33 points, or 1.8%, on Monday. [22230003] |In the first 25 minutes of Tuesday's trading the Nikkei index soared 664.83 points, to 35133.83. [22230004] |By 10 a.m. Tokyo time, the index was up 435.11 points, to 34903.80 as investors hailed New York's overnight rally. [22230005] |Monday's slide came in a relatively calm session that didn't provide much direction for other markets. [22230006] |Shares also closed sharply lower across Europe, particularly in Frankfurt, although London and a few other markets recovered some ground after stocks began to rebound in New York. [22230007] |Other Asian and Pacific markets had sharper losses than Tokyo, but the selling wave stopped short of precipitating another market crash. [22230008] |All eyes were on Tokyo at the opening because it was the first major market to trade since Friday's 190.58-point plunge on Wall Street. [22230009] |But rather than set the tone for other markets, Japan's major institutional investors chose to remain on the sidelines. [22230010] |Still, despite the sudden reappearance of stock-market turbulence, managers of Japanese investment funds said they weren't planning to unload U.S. or European equities. [22230011] |"We didn't trade much today, as our policy now is to wait and see," said a fund manager at Taisho Life Insurance Co. [22230012] |"We would like to wait and see until trading goes around through Europe and New York." [22230013] |The institutions appeared confident that Japanese regulators would step in to ensure orderly trading if necessary, and there was considerable speculation during the day that the Finance Ministry was working behind the scenes to do just that. [22230014] |But in the absence of panicky trading, its presence was never overtly felt. [22230015] |At the close, the Nikkei average of 225 stocks stood at 34468.69, down 647.33 points, or 1.8%. [22230016] |The broader Tokyo Stock Price Index sank 45.66, or 1.7%, to 2600.88. [22230017] |The day's decline was generally in line with analysts' weekend predictions. [22230018] |Declining issues swamped advancers, 941-105. [22230019] |But volume was thin at 526.2 million shares, compared with 574.7 million Friday. [22230020] |The market opened sharply lower, with the Nikkei average down nearly 600 after 20 minutes. [22230021] |A midmorning rebound brought it back to show a gain of about 200 at the end of the morning session, but the rally failed in the afternoon, and the market closed near the day's low. [22230022] |The smaller stocks in the Tokyo market's second section also posted their biggest decline of the year. [22230023] |The Tokyo Stock Exchange index for the second section fell 100.96, or 2.7%, to 3655.40. [22230024] |Many investors, trying to outperform the market's major indexes, have flocked to these small issues in recent weeks. [22230025] |Japanese investors and traders expressed relief that the Tokyo market didn't fall more sharply. [22230026] |But its performance did bear some resemblance to events of two years ago, during the October 1987 global stock market crash. [22230027] |On Oct. 16, 1987 -- the Friday before the Black Monday crash -- the New York market dropped 4.6%, and Tokyo followed on Monday with a 2.4% drop. [22230028] |This time, Wall Street's plunge of 6.9% Friday was followed by yesterday's 1.8% loss in Tokyo. [22230029] |Two years ago, Tokyo's biggest fall came the day after New York's 22.6% Black Monday plunge, when the Nikkei average fell 14.9%. [22230030] |Thus, market participants yesterday were looking ahead nervously to Wall Street's opening. [22230031] |But in New York yesterday, the Dow Jones Industrial Average surged 88.12 to close at 2657.38 on heavy volume of 416,290,000 shares, although declining issues still outnumbered advancing ones on the broad market. [22230032] |Nobuto Yasuda, a director at Yamaichi Investment Trust & Management Co., called yesterday's session "a good scenario" for Japan. [22230033] |"Now we are looking for the time to place buy orders," he said. [22230034] |"For us institutional investors, the chance for buying has come." [22230035] |Isao Ushikubo, general manager of the investment research department at Toyo Trust & Banking Co., also was optimistic. [22230036] |He described Friday's plunge in the U.S. as a "fleeting" event resulting in part from excessive merger and acquisition activity. [22230037] |"Unless there is a panic, this is the best time to buy, as was the case two years ago," he said. [22230038] |"Those shares which had posted gains on M&A speculation were dashed with cold water, but as far as major stocks are concerned, there isn't much impact." [22230039] |Other fund managers were similarly sanguine. [22230040] |"We have no plans to adjust our asset allocation in foreign equities," said Masato Murakami, chief portfolio manager in the pension fund management department at Yasuda Trust & Banking Co. [22230041] |He said Friday's Wall Street decline was "well within the range of volatility" that Yasuda Trust plans for when it charts its overseas investment strategy. [22230042] |Among other Asian and Pacific markets, Malaysia and Singapore had the biggest losses, with the Kuala Lumpur composite index in Malaysia falling 11.5% and Singapore's Straits Times Industrial Index down 10%. [22230043] |Major indexes declined more than 8% in Australia and New Zealand and 6.5% in Hong Kong. [22230044] |Bangkok, Manila, Seoul, Taipei and Jakarta escaped with slightly smaller losses. [22230045] |Brokers and fund managers said the region's markets were reacting to Friday's Wall Street plunge even though that decline was due to local factors such as failed corporate buy-outs and a deteriorating junk-bond market. [22230046] |"It's pure psychology," said William Au Yeung, an account executive for Drexel Burnham Lambert (HK) Ltd. in Hong Kong. [22230047] |"Markets in this region aren't so geared to leveraged buy-outs, and their economies generally are in good shape, but there's no doubt that Asia is still following America's lead." [22230048] |Several analysts said Malaysia and Singapore had the biggest losses because they are relatively open to rapid cash flows. [22230049] |Hong Kong is the region's next most open market, but many foreign investors have been staying away from it since it plunged in June amid political turmoil in China. [22230050] |"Singapore took the hit because when people want to get out, they tend to go where the liquidity is," said Elizabeth Hambrecht, a regional analyst with Baring Securities (Hong Kong) Ltd. [22230051] |She pointed out that even after Monday's 10% decline, the Straits Times index is up 24% this year, so investors who bailed out generally did so profitably. [22230052] |Similarly, Kuala Lumpur's composite index yesterday ended 27.5% above its 1988 close. [22230053] |In Hong Kong, the Hang Seng Index fell 180.60 to finish at 2601.70. [22230054] |Trading was heavy at about one billion shares, compared with 473.9 million Friday. [22230055] |But the session was orderly, in contrast to the market's four-day closure after the 1987 crash. [22230056] |Richard Chenevix-Trench, a director at Hong Kong-based Baring International Fund Managers Ltd., said the market probably hasn't hit bottom yet but is close. [22230057] |"If New York doesn't collapse, I see maybe another 5% on the downside, not counting the risk of bad news out of China," he said. [22230058] |In Australia, Sydney's All Ordinaries index closed at 1601.5, down 8.1%, its biggest drop since October 1987. [22230059] |But volume rose only to 162 million shares from 143 million Friday. [22230060] |Nestor Hinzack, an analyst at brokerage firm Burdett, Buckeridge & Young Ltd., described the market's performance as "sheep-like" as investors fled to bluechip Australian stocks and shunned entrepreneurial companies they perceived as having any takeover premium built into the price. [22230061] |London's Financial Times-Stock Exchange 100-share index, the most closely watched market barometer, ended at its intraday high of 2163.4, down 70.5, or 3.2%. [22230062] |At its low, shortly before Wall Street opened, it was off more than 130 points. [22230063] |The Financial Times 30-share index closed 79.3 points lower at 1738.7. [22230064] |Volume more than doubled to 959.3 million shares from 457.7 million Friday. [22230065] |Prices on the Frankfurt Stock Exchange tumbled in heavy trading. [22230066] |The decline in the German Stock Index of 203.56 points, or 12.8%, to 1385.72 was the Frankfurt market's steepest fall ever. [22230067] |Retail investors dumped holdings on a massive scale, pushing some blue-chip shares down as much as 20%. [22230068] |Analysts cited memories of two years ago, when many small investors held on to their shares after the October crash but the West German market continued to decline steeply for the next three months. [22230069] |Here are price trends on the world's major stock markets, as calculated by Morgan Stanley Capital International Perspective, Geneva. [22230070] |To make them directly comparable, each index is based on the close of 1969 equaling 100. [22230071] |The percentage change is since year-end. [22231001] |Frank Lloyd Wright is reported to have said once that if you tipped the world on its side, everything loose would end up in California. [22231002] |We've always thought that Mr. Wright underestimated California's vitality, but maybe the state's la-la factions are starting to overwhelm the forces that made it such a significant place. [22231003] |What else is one to make of the whacky save-the-earth initiative just proposed by several major environmental groups and organized by the state's attorney general? [22231004] |If passed by the voters, the recently announced initiative would phase out major pesticides, reduce carbon dioxide emissions by 40%, ban new offshore drilling, ban chemicals thought to deplete the ozone layer, and create a new state environmental officer armed with a $40 million budget to sue any firm or agency he thinks is being too dirty. [22231005] |The initiative is based largely on the wish-lists of the green lobby: the Sierra Club, the League of Conservation Voters, the Natural Resources Defense Council, the National Toxics Campaign and the Citizens for a Better Environment. [22231006] |Interestingly, the Environmental Defense Fund is having nothing to do with this one. [22231007] |Not only Californians but all Americans would pay if this thing passed. [22231008] |The initiative bars the sale of any crops in California that don't meet the initiative's standards. [22231009] |Kansas wheat farmers and Florida fruit growers would have to adjust or give up the California market. [22231010] |In other words, California is presuming to take control of the nation's farm policy. [22231011] |As usual the green lobby's proposal is disconnected from scientific reality. [22231012] |Consider the greenhouse-effect provision. [22231013] |The proposed initiative would mandate a reduction of carbon dioxide of 40%. [22231014] |Even if one buys into the whole greenhouse theory, it is inconceivable that reductions in a single state could have any impact on what is billed as a global problem. [22231015] |But if rational science and economics have nothing to do with the new environment initiative, what is going on? [22231016] |The first place to look under these circumstances is at the ways in which the sponsors themselves will benefit. [22231017] |The key here is the ambition of state Attorney General John Van de Kamp. [22231018] |He's running for governor. [22231019] |Mr. Van de Kamp is the one who collected the plans from the various radical environmental groups and cobbled them into a single unwieldy initiative to be placed on the ballot for election on Nov. 6, 1990. [22231020] |That's also the day of the gubernatorial election. [22231021] |The initiative seems to have been crafted to include all the hot issues that set off the wealthy Hollywood weepers who donate money. [22231022] |And it allows Mr. Van de Kamp to get around campaign spending limits. [22231023] |He can spend the legal maximum for his campaign; all the spending for the Van de Kamp initiative (on which there are no limits) is gravy. [22231024] |This initiative is being labeled The Big Green, but maybe it should be called The Big Greenback. [22231025] |(The Republican candidate, Sen. Pete Wilson, is playing the initiative fundraising game too, sponsoring his own crime initiative.) [22231026] |While it is possible that the Big Green initiative will be ruled unconstitutional, it is of course conceivable that in modern California it could slide through. [22231027] |This is the state that recently passed the Prop. 65 anti-toxic initiative. [22231028] |If this new proposal ever does become law, the green lobby will benefit directly. [22231029] |The initiative creates a free floating state environmental officer to sue companies or government agencies that do things he doesn't like. [22231030] |That means the NRDC and such groups no longer would have to spend as much money on litigation; taxpayers would bear the cost. [22231031] |Mr. Van de Kamp and his allies may be hoping that the environment is such a mom and apple-pie issue among certain segments of California's population now that almost any collection of anti-scientific, anti-pocketbook nonsense can pass under its rubric. [22231032] |Of course the state's liberals are not yet a nation unto themselves. [22231033] |George Bush, for example, may decide that he doesn't want to be the President who lost control of interstate commerce to an attorney general from California. [22231034] |And some other segments of California's political and media culture may yet start to point out that the initiative would impose significant costs on the state's less affluent citizens in the form of higher food prices and lost jobs. [22231035] |This grandiose initiative will help California define itself for the futureeither as a state still tethered to economic and scientific reality, or as one being led to wherever its la-la activists want to take it. [22232001] |First, there was a death watch. [22232002] |Then exhilaration. [22232003] |Spurred by waves of large-scale buying in blue-chip stocks, the Dow Jones Industrial Average rallied yesterday and erased about a half of Friday's 190.58-point plunge, gaining 88.12 to 2657.38. [22232004] |It was the fourth-biggest advance for the average of 30 blue chips, on frenetic New York Stock Exchange volume of 416,290,000 shares -- the highest since the days after the 1987 crash. [22232005] |While the advance cheered investors who feared a 1987-style crash would occur yesterday, it was strictly a big-stock rally fed by huge buying by bargain-hunting institutions and program traders. [22232006] |A troubling sign: Declining stocks on the Big Board outnumbered advancers, 975 to 749, and the over-the-counter market that includes many smaller stocks suffered aftershocks of Friday's late Big Board plunge. [22232007] |The Nasdaq OTC index closed down 6.31 to 460.98. [22232008] |Meanwhile, in a divergence in two of the market's most important indicators, the Dow industrials' sister average, the 20-stock Dow Jones Transportation Average, tumbled 102.06 to 1304.23 -- its second-worst decline next to the 164.78-point fall during the 1987 crash. [22232009] |Transports plunged on takeover disappointments in two airline stocks, UAL and AMR, which each fell more than 20% when they reopened for trading yesterday after being suspended Friday afternoon. [22232010] |UAL, the takeover stock at the center of Friday's 190.58-point market plunge, fell 56 7/8 to 222 7/8 on nearly 2.3 million shares. [22232011] |Overall, "this is a pleasant rally but it's very selective," said Arthur Cashin Jr., a veteran PaineWebber Inc. trader at the Big Board. [22232012] |"Everyone was a little concerned about the general narrowness of the rally and failure of the OTC market to get into plus territory. [22232013] |It's just a strange feeling. [22232014] |I don't think anyone left the place whistling Dixie." [22232015] |The rally gave credence, at least for now, to the pre-trading declaration of Big Board Chairman John J. Phelan Jr. that Friday's market debacle was "an abnormal condition, and not a disaster." [22232016] |But to traders, it looked like disaster on the 9:30 a.m. opening bell. [22232017] |The Dow Jones Industrial Average opened down 1.64 shortly after 9:30. [22232018] |But most of the 30 blue-chip stocks in the average, including Eastman Kodak and General Motors, couldn't trade because of the heavy backlog of sell orders left over from Friday's late-afternoon rout. [22232019] |At 9:45, Procter & Gamble -- one of the most important Dow bellwethers of late -- opened down 2 3/4 to 117. [22232020] |The Dow dropped to a quick 27-point loss, and to many traders it looked as if stocks were headed for yet another big tumble. [22232021] |More stocks opened over the ensuing half hour, as the 49 Big Board specialist firms in charge of keeping the market orderly groped to find buy orders from major brokerage firms to match the selling flood. [22232022] |Then, to make matters worse, computerized sell programs kicked in, hammering stocks into steeper losses. [22232023] |There was heavy stock-index arbitrage, as traders sold big baskets of stock and bought stock-index futures to profit from the price discrepancies between the two markets. [22232024] |This was a hangover from Friday, when Standard & Poor's 500-stock index futures had closed at a sharp discount to stocks. [22232025] |The onslaught of the program selling dashed any hopes that some of the big program trading firms would hold off until the market stabilized. [22232026] |They didn't. [22232027] |The Dow accelerated its slide, losing 63.52 in the first 40 minutes of trading. [22232028] |With program traders seemingly in charge, buyers backed away from the market and watched stocks fall. [22232029] |Then at 10:15 the Dow suddenly started to rebound, and when it shot upward it did so even faster than the early-morning fall. [22232030] |And this time, it wasn't just the program traders who were responsible. [22232031] |All the selling had pushed stocks to such cheap values that big investment banks and major money management firms started buying stocks heavily. [22232032] |The program traders were in there, too, of course. [22232033] |But according to one trader, the programmers "didn't look as dominant on the upside as on the downside because there was {also} a lot of bargain-hunting" by institutions. [22232034] |Roland M. Machold, director of the New Jersey Division of Investment, which oversees $29 billion in investments, said the "first thing we did was to double our orders" yesterday morning. [22232035] |"With the market down like this, we'll probably take another $50 million and put it in" the market. [22232036] |Trading in Walt Disney Co. particularly caught traders' eyes. [22232037] |According to Big Board officials, Disney had one of the biggest sell-order imbalances on Friday; it was one of the seven stocks that couldn't finish trading that day. [22232038] |The stock opened late at 114 1/2, down 8 1/2. [22232039] |But then it shot upward 7 1/2 as Goldman, Sachs & Co. stepped in and bought, traders said. [22232040] |However, Disney specialist Robert Fagenson said: "I would be surprised if Goldman represented 4% of the opening volume." [22232041] |Around Wall Street, trading desks were relieved that they could at least play the market yesterday, in contrast to Friday's gridlock. [22232042] |At Donaldson, Lufkin & Jenrette Inc., head equity trader Dudley Eppel said: "I think the opening was constructive. [22232043] |It was orderly. [22232044] |We put some orders together. [22232045] |There wasn't a lot of panic selling, either domestically or internationally. . . . [22232046] |Not like Friday where they just took {the market} apart." [22232047] |Still, the market hadn't yet crossed into positive territory, and traders were glum. [22232048] |But in another dramatic burst, the Dow tacked on 42 points in five minutes, and at 10:25 the index showed a gain of 5.74. [22232049] |On the Big Board floor and on trading desks, traders yelped their approval. [22232050] |Grinned Griffith Peck, a trader in Shearson Lehman Hutton Inc.'s OTC department: "I tell you, this market acts healthy." [22232051] |Around him, scores of traders seemed to get a burst of energy; their boss broke out bottles of Perrier water to cool them off. [22232052] |Among Big Board specialists, the cry was "Pull your offers" -- meaning that specialists soon expected to get higher prices for their shares. [22232053] |"It was bedlam on the upside," said one Big Board specialist. [22232054] |But not everybody was making money. [22232055] |The carnage on the Chicago Board Options Exchange, the nation's major options market, was heavy after the trading in S&P 100 stock-index options was halted Friday. [22232056] |Many market makers in the S&P 100 index options contract had bullish positions Friday, and when the shutdown came they were frozen with huge losses. [22232057] |Over the weekend, clearing firms told the Chicago market makers to get out of their positions at any cost Monday morning. [22232058] |"They were absolutely killed, slaughtered," said one Chicago-based options trader. [22232059] |Some traders said that the closely watched Major Market Index, whose 20 stocks mimic the Dow industrials, didn't lead yesterday's big rally. [22232060] |James Gallagher, a partner at specialist Fowler & Rosenau, said, "The difference between today and two years ago" -- "Terrible Tuesday," Oct. 20, 1987 -- "is that then we needed a savior to go into the Major Market Index, spend $2 million and get the program rally started. [22232061] |This time {institutions} saw the programs coming and backed away and backed away. [22232062] |Then when the market was at a technical level to buy, they came in with a vengeance." [22232063] |However, according to one analyst, the timing of Major Market Index futures buying just before the turnaround was similar to that of Terrible Tuesday. [22232064] |"Futures were pulling the stock market higher," said Donald Selkin, head of stock-index futures research at Prudential-Bache Securities Inc. [22232065] |Although the Big Board's specialist firms struggled through another highly volatile trading session, their performance yesterday was better than during Friday's late-afternoon chaos, according to traders and brokers who work with them. [22232066] |Specialists were criticized for their inability to maintain orderly markets during the Friday plunge. [22232067] |But yesterday, even with halts in such major blue-chip stocks as Merck, "we expected (the halts) and it wasn't too bad," said Donaldson's Mr. Eppel, who had been critical of the specialists' performance on Friday. [22232068] |According to a Big Board official, while many stocks opened late, there were subsequent trading halts in only three issues -- AMR, Merck and Valero Energy. [22232069] |Merck is one of the most important stocks in the Major Market Index. [22232070] |No sector of the market has been spared during the past two days' gyrations. [22232071] |Yet from the Dow industrials' high on Oct. 9 through Friday's plunge, relatively good performances have been turned in by real-estate, utilities, precious metals and life insurance stocks. [22232072] |And yesterday, the top performing industry group was oil field equipment issues. [22232073] |For example, Halliburton jumped 3 1/4 to 38, Schlumberger rose 2 1/2 to 43 1/4 and Baker Hughes rose 1 1/8 to 22. [22232074] |Because of the UAL and AMR tumbles, airlines were the weakest sector of the market yesterday. [22232075] |Philip Morris was the Big Board's most active issue, rising 2 1/4 to 43 1/4 on nearly eight million shares. [22232076] |Among other major issues, Coca-Cola Co. closed up 2 at 66 3/4 on 1.7 million shares and American Telephone & Telegraph rose 3 1/4 to 43 on nearly 7.8 million shares. [22232077] |Shares of International Business Machines, which reported earnings yesterday, finished at 103, up 1, after slipping below 100 during Friday's session for the first time in five years. [22232078] |Shares of three brokerage firms rose after they reported earnings. [22232079] |Merrill Lynch added 1 3/4 to 28, PaineWebber rose 3/4 to 18 1/2 and Bear Stearns rose 3/8 to 14 1/4. [22232080] |Federal National Mortgage Association, a recently hot stock, climbed 4 to 124 on nearly 1.6 million shares. [22232081] |At a news conference after the close of trading yesterday, the Big Board's Mr. Phelan and other exchange officials praised the performance of their computers and personnel. [22232082] |Mr. Phelan said that program trading strategies weren't responsible for triggering Friday's decline despite a jump in the use of the computer-driven strategies in recent months. [22232083] |Some 24 million of the more than 100 million shares traded in the final 90 minutes of Friday's session, when the plunge in stock prices was concentrated, were program-related, he said. [22232084] |Program trades make up 10% of the exchange's volume on an average day, but despite the increase Friday, it was "certainly not something you would say precipitated the market decline," Mr. Phelan said. [22232085] |Mr. Phelan expressed relief that the market rebounded yesterday. [22232086] |"Obviously, every time we get this kind of reaction, it's going to make everybody nervous, including me," he said. [22232087] |He said that exchange officials had conversations with Wall Street firms throughout the weekend and that "all the participants behaved very, very responsibly today." [22232088] |Meanwhile, Peter DaPuzzo, Shearson's head of retail equity trading, praised institutional investors in the OTC market, who were heavy buyers of the Nasdaq's biggest technology issues yesterday amid a flood of selling by other investors. [22232089] |"The institutions can't be criticized for their behavior," Mr. DaPuzzo said in an interview. [22232090] |"It was the opposite of what happened on Oct. 19. [22232091] |They used their judgment. [22232092] |They didn't panic during the first round of selling this morning. [22232093] |Instead, they bought on weakness and sold into the strength, which kept the market orderly. [22232094] |Maybe they learned from experience." [22232095] |Mr. Phelan said the performance of specialists during Friday's plunge was admirable, because out of 1,640 Big Board common stocks traded during the day only seven were closed and weren't reopened before the close. [22232096] |"They did an excellent job," Mr. Phelan said of the specialists. [22232097] |Wall Street traders on Friday had complained about the trading suspensions. [22232098] |James A. White and Sonja Steptoe contributed to this article. [22233001] |West Germany's Green Party joined its ideological soulmates Jeremy Rifkin and the Christic Institute in the legal battle to ground the Atlantis shuttle and its plutonium-powered Galileo probe to Jupiter. [22233002] |The anti-defense Greens wanted a Washington federal appeals court to block today's scheduled liftoff long enough for them to ask the World Court to "order" a permanent cancellation of the $1.5 billion flight. [22233003] |A three-judge appeals panel yesterday refused to comply, though liberal Judge Pat Wald went out of her way to deny that this was a "frivolous" case. [22233004] |Of course it was. [22233005] |NASA should now sue for fines against all three politico-plaintiffs, foreign and domestic, for bringing this mischievous case. [22234001] |A House-Senate conference approved a permanent smoking ban on all domestic airline routes within the continental U.S. and on all flights of six hours or less to Alaska and Hawaii. [22234002] |The restrictions would cover all but a small percentage of domestic air traffic, and represent a major expansion of the current smoking ban on flights of two hours or less. [22234003] |The exemption allowed on longer flights to Alaska and Hawaii appears to be largely a face-saving concession for the traditionally powerful tobacco industry, which has found itself increasingly isolated in the face of public pressure in recent years. [22234004] |By a 6-4 margin, House negotiators initially rejected last night a Senate provision covering all domestic flights. [22234005] |But the six-hour compromise was soon agreed to in subsequent discussions. [22234006] |As a practical matter, flights from the West Coast to Hawaii would be covered as they are under the time limit, but the language would exempt longer routes beginning, for example, in Chicago or on the East Coast. [22234007] |Within the Senate, the ban has had aggressive support from Sen. Frank Lautenberg (D., N.J.), who has used his position as a Senate Appropriations subcommittee chairman to garner votes for the initiative. [22234008] |The measure is attached to the more than $26 billion fiscal 1990 transportation bill within Mr. Lautenberg's jurisdiction, and the final compromise is laced with more than $205 million in road projects earmarked by members as well as funds sought by major airports, including Denver. [22234009] |From the outset, the tobacco industry has been uncertain as to what strategy to follow. [22234010] |But the industry retains support in the House leadership through the influence of grower states, such as North Carolina. [22234011] |Majority Whip William Gray owes a political debt to Southern agriculture lawmakers for his rise in the House, and the Philadelphia Democrat used his position in the conference to salvage the exemption from a total ban. [22234012] |Although the smoking provision has attracted the most public interest, the underlying bill was the subject of behind-the-scenes lobbying because of its impact on air transportation and the more mundane, but politically important, projects of members. [22234013] |In a stark lesson in the power of the appropriations committees, the House deliberately killed a handful of projects backed by lawmakers in Florida, Illinois and Pennsylvania who had voted against the panel leadership on the House floor. [22234014] |"Anybody can vote as they want," said Rep. William Lehman (D., Fla.), head of the House conferees. [22234015] |"But if you make a request, you should support the committee." [22234016] |Within the Federal Aviation Administration, the final bill promises to increase spending for facilities and equipment by more than 20% from last year, and total operations would rise to $3.84 billion -- a 12% boost. [22234017] |The facilities account includes $40 million for Denver's ambitious new airport, and the competition for these funds created shifting alliances between urban lawmakers representing established airports in Philadelphia and Michigan and the major carriers to Denver, United and Continental. [22234018] |Leery of the costs -- and, critics say, competition -- the airlines have sought to gain leverage over the city of Denver. [22234019] |Texas Air Corp., which owns Continental, and the Air Transport Association were prominent in the lobbying. [22234020] |The industry sought to impose conditions that would have delayed funds for the project until Denver and the airlines had agreed to leases for 50% of the gates. [22234021] |But this was rejected in favor of much looser language directing the Transportation Department to review the costs of the first phase, expected to cost about $2 billion. [22234022] |Though smaller in total dollars, the conference agreed to preserve an estimated $30.6 million in controversial subsidies to carriers serving rural or isolated airports. [22234023] |The sum is more than double what the House had approved for the program, but the list of qualified airports would be cut by 22 under new distance requirements and limits on the level of subsidy. [22234024] |Congress previously cut six airports this year. [22234025] |The impact of the changes is to eliminate many of the most excessive cases where the government has been paying more than $200 for each passenger in subsidies. [22234026] |Among rail and highway accounts, the agreement provides $615 million for Amtrak, including $85 million for capital improvements. [22234027] |And federal-formula grants for mass transit would be effectively frozen at $1.625 billion, or $20 million more than last fiscal year. [22235001] |Enjoying several blockbuster movie hits including "Batman," Los Angeles-based Guber-Peters Entertainment Co. reported earnings for the first quarter ended Aug. 31 of $5.8 million, or 50 cents a share, compared with a year-earlier loss. [22235002] |Sony Corp., which has offered to acquire the movie-production company, is seeking to free its top executives, Peter Guber and Jon Peters, from an exclusive agreement with Time Warner Inc.'s Warner Communications Inc. so they can run Columbia Pictures Entertainment Inc. [22235003] |Sony two weeks ago agreed to acquire Columbia for $3.4 billion, or $27 a share. [22235004] |Warner sued Sony and Guber-Peters late last week; Sony and Guber-Peters have countersued, charging Warner with attempting to interfere in Sony's acquisition of the two companies. [22235005] |Guber-Peters's net income in the latest quarter compared with a net loss of $6.9 million, or 62 cents a share, in the year-earlier period. [22235006] |The company said revenue rose 138%, to $10.9 million from $4.6 million, reflecting the success of its movies "Gorillas in the Mist" and "Rainman," as well as the box-office smash "Batman. [22236001] |A group including Jon M. Huntsman of Salt Lake City, said it boosted its stake in Aristech Chemical Corp. to 8.36% of the the common shares outstanding. [22236002] |As previously reported, Huntsman Holdings Corp., owned by Jon M. Huntsman and other members of his family, proposed that Banstar Corp., an affiliate of Huntsman Holdings, acquire Aristech in a friendly transaction for $25-a-share in cash, or $817.5 million. [22236003] |In a filing with the Securities and Exchange Commission, the Huntsman group said it controls 2,720,675 Aristech common shares, including 306,000 shares bought from Aug. 21 to Oct. 13 for $20 to $20.875 per share. [22236004] |Officials at Aristech, based in Pittsburgh, declined comment. [22237001] |Congress has been critical of the Bush administration for not sending enough aid to Poland, so it is getting ready to send its own version of a CARE package. [22237002] |Last month, the Senate voted to send a delegation of congressional staffers to Poland to assist its legislature, the Sejm, in democratic procedures. [22237003] |Senator Pete Domenici calls this effort "the first gift of democracy." [22237004] |The Poles might do better to view it as a Trojan Horse. [22237005] |It is the vast shadow government of 15,000 congressional staffers that helps create such legislative atrocities as the 1,376 page, 13-pound reconciliation bill that claimed to be the budget of the United States. [22237006] |Maybe after the staffers explain their work to the Poles, they'd be willing to come back and do the same for the American people. [22238001] |Waterford Wedgwood PLC, a financially troubled Irish maker of fine crystal and Wedgwood china, reported that its pretax loss for the first six months widened to 10.6 million Irish punts ($14.9 million) from 5.8 million Irish punts a year earlier. [22238002] |The results for the half were worse than market expectations, which suggested an interim loss of around 10 million Irish punts. [22238003] |In a sharply weaker London market yesterday, Waterford shares were down 15 pence at 50 pence (79 cents). [22238004] |The company reported a loss after taxation and minority interests of 14 million Irish punts, compared with a loss of 9.3 million Irish punts for the year-earlier period. [22238005] |There weren't any extraordinary items. [22238006] |Sales for the total group rose 27% to 168.1 million Irish punts compared with 132.6 million Irish punts a year ago. [22238007] |Waterford has decided against paying an interim dividend. [22238008] |Waterford said the appointment of a new management team and the signing of a comprehensive labor agreement are expected to enhance the company's long-term prospects. [22239001] |The sudden "flight to quality" that triggered Friday's explosive bond-market rally was reversed yesterday in a "flight from quality" rout. [22239002] |The setback, in which Treasury bond prices plummeted, reflected a rebound in the stock market and profit-taking. [22239003] |"It was a pretty wild day. [22239004] |Our markets were closely tied to the stock market," said Joel Kazis, manager of trading at Smith Barney, Harris Upham & Co. [22239005] |"Friday's flight to quality was no longer needed once the stock market found its legs," he said. [22239006] |Some fixed-income investors had expected a further drop in stock prices after the nearly 200-point drop in the Dow Jones Industrial Average on Friday. [22239007] |That caused investors to flee stocks and buy high-quality Treasury bonds, which are safer than other types of securities. [22239008] |But when stocks began to climb instead, prices of Treasury bonds declined. [22239009] |Contributing to the selling pressure were dispatches by several investment firms advising clients to boost their stock holdings and reduce the size of their cash or bond portfolios. [22239010] |Among the firms were Merrill Lynch & Co. and Dean Witter Reynolds Inc. [22239011] |The bond market seemed to ignore evidence that the Federal Reserve eased credit conditions slightly by allowing the federal funds rate to drift as low as 8 1/2%. [22239012] |The closely watched rate on federal funds, or overnight loans between banks, slid to about 8 3/4% last week, down from its perceived target level of about 9%. [22239013] |The rate is considered an early signal of changes in Fed policy. [22239014] |Traders said yesterday's modest easing didn't stir much enthusiasm because it had been widely expected. [22239015] |In fact, some economists contend that the latest easing started last week. [22239016] |Others note that some investors were disappointed because they had expected a more aggressive easing. [22239017] |The Treasury's benchmark 30-year bond, ended about 1 3/4 points lower, or down about $17.50 for each $1,000 face amount. [22239018] |The reversal was even more evident among shorter-term Treasury securities. [22239019] |After Treasury bill rates plummeted as much as 0.70 percentage point on Friday, they gave back three-fourths of that amount yesterday. [22239020] |The bond-equivalent yield on three-month Treasury bills, for example, was quoted late yesterday at 7.72%, compared with 7.16% Friday. [22239021] |Investment-grade corporate bonds, mortgage-backed securities and municipal bonds also fell. [22239022] |But prices of junk bonds, which were battered Friday in near standstill trading, rebounded to post small gains after a volatile trading session. [22239023] |Junk bonds opened as much as four points lower but staged a modest comeback as stock prices firmed. [22239024] |Some traders said the high-yield market was helped by active institutional buying. [22239025] |In particular, they said, firms such as First Boston Corp. and Drexel Burnham Lambert Inc. began making a market in junk issues early in the session when prices hit severely depressed levels. [22239026] |"I think the willingness of securities companies to make markets for high-yield issues improved the sentiment for junk bonds," said John Lonski, an economist at Moody's Investors Service Inc. [22239027] |U.S. Treasury bonds were higher in overnight trading in Japan, which opened at about 7:30 p.m. EDT. [22239028] |The benchmark 30-year bond, for example rose one point in early Japanese trading in reaction to a quick 600-point drop in the Tokyo stock market. [22239029] |But as Japanese stocks rebounded, Treasurys retreated and ended just modestly higher. [22239030] |Many U.S. trading operations, wanting to keep a watchful eye on Japanese trading as an indication of where U.S. trading would begin, were fully staffed during the Tokyo trading session. [22239031] |"Most of the action was during the night session," said Michael Moore, trading manager at Continental Bank. [22239032] |Jay Goldinger, who often trades overnight for Capital Insight Inc., Beverly Hills, Calif., said trading in Tokyo was "very active" but highly volatile. [22239033] |"We went down 3/4 point in 10 minutes right before lunch, then after lunch we went up 3/4 point in 12 minutes," he said. [22239034] |In Tokyo, trading is halted during lunchtime. [22239035] |Tokyo's market turned out to be a bad bellwether for U.S. trading. [22239036] |When the market opened here, bonds prices fell as the stock market regained strength. [22239037] |The bond market's focus on stock activity was so strong yesterday that it overshadowed today's slate of economic data, which includes the government's report on August U.S. merchandise trade and September industrial production. [22239038] |Industrial production is expected to have declined 0.2%, according to a consensus of economists surveyed by Dow Jones Capital Markets Report. [22239039] |The August trade deficit is expected to have widened to $9.1 billion from $7.58 billion in July. [22239040] |A widening of that magnitude, said one New York trader, is "not a favorable number. . . . [22239041] |It could do damage to us." [22239042] |Meanwhile, agency supply is expected to weigh heavily on the market today when the Federal Home Loan Bank prices a $2.3 billion offering of one-year, three-year, five-year and 10-year maturities. [22239043] |Tomorrow, the Resolution Funding Corp. will provide details of its first bond issue, which is expected to total between $4 billion and $6 billion and carry a maturity greater than 20 years. [22239044] |Resolution Funding is a division of Resolution Trust Corp., the new federal agency created to bail out the nation's troubled thrifts. [22239045] |And this week the Tennessee Valley Authority plans to price a $3 billion offering, its first public debt borrowing in 15 years. [22239046] |"There's lots of supply," the New York trader said. [22239047] |"We have a couple or three tough weeks coming." [22239048] |Treasury Securities [22239049] |Prices of Treasury bonds tumbled in moderate to active trading. [22239050] |The benchmark 30-year Treasury bond was quoted late at a price of 101 19/32, compared with a closing price of 103 12/32 Friday. [22239051] |The yield on the benchmark issue rose to 7.97% from 7.82%. [22239052] |The latest 10-year notes were quoted late at 100 3/32 for a yield of 7.97%, compared with 101 9/32 to yield 7.84%. [22239053] |Short-term interest rates fell yesterday at the government's weekly Treasury bill auction. [22239054] |The average discount rate on new three-month Treasury bills was 7.37%, the lowest since the average of 7.36% at the auction on Oct. 17, 1988. [22239055] |The average discount rate was 7.42% on new six-month bills, the lowest since the average of 7.35% at the auction on July 31, 1989. [22239056] |Here are auction details: [22239057] |Rates are determined by the difference between the purchase price and face value. [22239058] |Thus, higher bidding narrows the investor's return while lower bidding widens it. [22239059] |The percentage rates are calculated on a 360-day year, while the coupon-equivalent yield is based on a 365-day year. [22239060] |Both issues are dated Oct. 19. [22239061] |The 13-week bills mature Jan. 18, 1990, and the 26-week bills mature April 19, 1990. [22239062] |Corporate Issues [22239063] |Investment-grade corporate bonds ended one to 1 1/2 point lower. [22239064] |There were no new issues. [22239065] |Foreign Bonds [22239066] |Foreign bonds surged as the dollar weakened against most major currencies. [22239067] |Among benchmark issues: -- Japan's No. 111 4.6% bond due 1998 ended on brokers screens at 96.15, up 1.17 point. [22239068] |The yield was 5.245%. [22239069] |-- West Germany's 6 3/4% issue due June 1999 ended at 98.30, up 0.91 point to yield 6.99%. [22239070] |-- Britain's 11 3/4% bond due 2003/2007 ended 1 1/8 higher at 111 19/32 to yield 10.12%, while the 11 3/4% notes due 1991 rose 21/32 to 98 26/32 to yield 12.74%. [22239071] |Mortgage-Backed Securities [22239072] |Mortgage securities gave up most of Friday's gains as active issues ended 24/32 to 30/32 point lower. [22239073] |Dealers said morning activity was hectic as prices dropped in response to gains in the stock market and losses in Treasury securities, but trading slowed to moderate levels in the afternoon. [22239074] |Government National Mortgage Association 9% securities for November delivery were quoted late yesterday at 98 4/32, down 30/32 from Friday; 9 1/2% securities were down 27/32 at 100 5/32; and 10% securities were at 102 2/32, off 24/32. [22239075] |Federal Home Loan Mortgage Corp. 9% securities were at 97 1/4, down 3/4. [22239076] |On Friday, mortgage issues gained as much as 1 5/32. [22239077] |Late yesterday Ginnie Mae 9% securities were yielding 9.39% to a 12-year average life assumption, as the spread above the Treasury 10-year note narrowed 0.01 percentage point to 1.42. [22239078] |Traders said there were some busy dealings in Freddie Mac and Federal National Mortgage Association securities because underwriters from last week's heavy slate of real estate mortgage investment conduit issues moved to gather collateral for new deals. [22239079] |Offsetting the Remic-related purchases were continued heavy sales by mortgage originators, which are producing increased amounts of fixed-rate mortgage-backed issues with lower rates. [22239080] |There was no new-issue activity in the derivative market. [22239081] |Municipals [22239082] |Rebounding stocks and weaker Treasury prices drove municipal bonds 1/4 to 3/4 point lower in late dealings. [22239083] |The session losses left municipal dollar bonds close to where they were before the 190.58-point drop in the Dow Jones Industrial Average Friday prompted a capital markets rally. [22239084] |Trading was hectic during the morning, with players trying to gauge whether equities would continue Friday's free fall or stabilize after a brief spot of weakness. [22239085] |Tax-exempts started the session flat to a touch higher on anticipation of further stock market erosion, but bond prices rapidly turned south as it became more clear that a repeat of the October 1987 crash wasn't at hand. [22239086] |Professionals dominated municipal trading throughout the session. [22239087] |Traders said retail investors seemed to be hugging the sidelines until a measure of volatility is wrung out of the market. [22239088] |New Jersey Turnpike Authority's 7.20% issue of 2018 was off 3/4 at 98 1/2 bid, yielding 7.32%, up 0.07 percentage point from late Friday. [22239089] |Florida Board of Education's 7 1/4% issue of 2023 was 5/8 point weaker at 99 1/2 bid. [22239090] |The 7 1/8% issue of Triborough Bridge and Tunnel Authority of New York, due 2019, was off 5/8 at 98 1/8 bid. [22239091] |And Fairfax County, Va., Water Authority's 7 1/4% issue of 2027 was down 3/4 at 99 7/8 bid. [22239092] |Serial bond yields were up about 0.05 percentage point. [22240001] |BMA Corp., Kansas City, Mo., said it's weighing "strategic alternatives," for its Business Men's Assurance Co. unit, and is contacting possible buyers of the life and health insurance operation. [22240002] |A BMA spokesman said "runaway medical costs" have made health insurance "a significant challenge," and margins also have been pinched by changes in the mix of life-insurance products consumers now demand. [22240003] |The Business Men's Assurance unit represented about $288 million of the company's $488 million in 1988 revenue, and the unit's operating income was about $10 million, said the spokesman. [22240004] |BMA's investment banker, Alex. Brown & Sons Inc., has been authorized to contact possible buyers for the unit. [22241001] |Laidlaw Transportation Ltd. said it raised its stake in ADT Ltd. of Bermuda to 29.4% from 28%. [22241002] |A spokesman for Laidlaw declined to disclose the price the Toronto transportation and waste services concern paid for the additional shares, which he said were acquired "over the last couple of weeks." [22241003] |The spokesman said Laidlaw wouldn't increase its stake in ADT beyond 30% "without a great deal of thought" because of British takeover regulations that require a company acquiring more than 30% to extend an offer to the rest of the company's shareholders. [22241004] |ADT, a security services and auctions company, trades on London's Stock Exchange. [22241005] |Laidlaw is 47%-controlled by Canadian Pacific Ltd., a Montreal transportation, resources and industrial holding concern. [22242001] |Nintendo Co., a Japanese maker of video games, electronic information systems and playing cards, posted a 23% unconsolidated surge in pretax profit to 61.41 billion yen ($429 million) from 50 billion yen ($349.9 million) for the fiscal year ended Aug. 31. [22242002] |Sales surged 40% to 250.17 billion yen from 178.61 billion. [22242003] |Net income rose 11% to 29.62 billion yen from 26.68 billion. [22242004] |Pershare net fell to 423.3 yen from 457.7 yen because of expenses and capital adjustments. [22242005] |Without detailing specific product breakdowns, Nintendo credited its bullish upsurge in sales -- including advanced computer games and television entertainment systems -- to surging "leisure-oriented" sales in foreign markets. [22242006] |Export sales for leisure items alone, for instance, totaled 184.74 billion yen in the 12 months, up from 106.06 billion in the previous fiscal year. [22242007] |Domestic leisure sales, however, were lower. [22243001] |Hertz Corp. of Park Ridge, N.J., said it retained Merrill Lynch Capital Markets to sell its Hertz Equipment Rental Corp. unit. [22243002] |"There is no pressing need to sell the unit, but we are doing it so we can concentrate on our core business, renting automobiles in the U.S. and abroad," said William Slider, Hertz's executive vice president. [22243003] |"We are only going to sell at the right price." [22243004] |Hertz Equipment had operating profit before depreciation of $90 million on revenue of $150 million in 1988. [22243005] |The closely held Hertz Corp. had annual revenue of close to $2 billion in 1988, of which $1.7 billion was contributed by its Hertz Rent A Car operations world-wide. [22243006] |Hertz Equipment is a major supplier of rental equipment in the U.S., France, Spain and the U.K. [22243007] |It supplies commercial and industrial equipment including earth-moving, aerial, compaction and electrical equipment, compressors, cranes, forklifts and trucks. [22244001] |Interspec Inc. reported a net loss of $2.4 million for the fiscal third quarter ended Aug. 31. [22244002] |It said the loss resulted from startup and introduction costs related to a new medical ultrasound equipment system. [22244003] |In the year-earlier quarter, the company reported net income of $955,000, or 15 cents a share. [22244004] |The manufacturer of ultrasound diagnostic systems, based in Ambler, Pa., reported a nine-month net loss of $2.43 million compared with net income of $2.71 million, or 44 cents a share, for the nine-month period a year earlier. [22244005] |In over-the-counter trading, Interspec fell 37.5 cents to $4.25. [22245001] |Allegheny Ludlum Corp. expects to report third-quarter net of about $34 million, or $1.50 a share, down from $38.4 million, or $1.70 a share, a year earlier, Richard P. Simmons, chairman and chief executive officer, told institutional investors in New York. [22245002] |Sales for the Pittsburgh-based producer of specialty steels and other materials fell to about $265 million in the third quarter from $320.5 million a year earlier, he said. [22245003] |He said the third-quarter estimate indicates profit for the nine months of $4.65 a share, "almost equal to the full-year 1988 earnings" of $108.6 million, or $4.81 a share. [22245004] |In the first nine months of 1988, net was $85 million, or $3.76 a share. [22245005] |Mr. Simmons said the third-quarter results reflect continued improvements in productivity and operating margins. [22245006] |He said capital spending next year will rise to about $45 million from about $35 million this year. [22246001] |U.S. Banknote Co. said it again extended the expiration date of its $7-a-share tender offer for International Banknote Co. to Nov. 15. [22246002] |U.S. Banknote said it is in negotiations to sell "certain facilities," which it didn't name, to a third party, and it needs the extension to try to reach a definitive agreement on the sale. [22246003] |U.S. Banknote said it believes the sale, if completed, apparently would satisfy antitrust issues raised by the U.S. Justice Department about U.S. Banknote's offer to buy International Banknote. [22246004] |Both of the New York-based companies print stock certificates and currency. [22246005] |U.S. Banknote said "there can be no assurance" a sale agreement would be concluded. [22246006] |It also said the tender offer would probably have to be extended further to complete financing arrangements. [22246007] |U.S. Banknote said Citibank extended the expiration date of its commitment for senior secured financing to Nov. 15. [22246008] |The offer, made June 1, has been extended several times. [22246009] |Closely held U.S. Banknote offered the $7 a share, or $126 million, for as many as 14.9 million shares, or 78.6%, of International Banknote's shares outstanding. [22246010] |U.S. Banknote said that as of Oct. 13, 16.1 million shares, or about 84.3% of the fully diluted shares outstanding, had been tendered. [22247001] |Gitano Group Inc. said it agreed to buy 50% of Regatta Sport Ltd., a closely held apparel maker, with the assumption of $3 million of contingent debt. [22247002] |Under the terms of the contract, New York-based Gitano has the option to acquire the remaining 50% of Regatta, a maker of men's and women's clothes sold primarily in department stores, under certain conditions. [22247003] |That 50% is now held by Clifford Parker, Regatta's president and chief executive officer, who will continue to manage Regatta's operations under Gitano. [22247004] |In 1989, Regatta will have sales "in excess of $10 million" and will show a profit, Mr. Parker said. [22247005] |Gitano, which makes budget-priced apparel sold mainly through mass merchandisers like K mart and Wal-Mart, said the Regatta acquisition will enhance its strategy to expand into department stores. [22247006] |This fall, Gitano began manufacturing moderately priced clothes aimed at department stores under the Gloria Vanderbilt trademark, which Gitano recently acquired. [22248001] |Enron Corp., Houston, said the sale of preference units of its newly formed Enron NGL Partners L.P. master limited partnership subsidiary will result in an undetermined gain in the fourth quarter. [22248002] |In the year-ago quarter, the natural gas concern had net income of $25.2 million, or 34 cents a share, on revenue of about $1.46 billion. [22248003] |Those results included a $2.7 million charge related to the retirement of debt. [22248004] |In a related move, Enron said it increased the number of the partnership's units it will offer to 6,930,000 from 5,500,000. [22248005] |The old and revised numbers both include over-allotment provisions. [22248006] |Enron said each unit will be priced in the $19-to-$21 range and will represent about 80% of the partnership equity. [22248007] |Net proceeds from the offering are expected to be close to $200 million. [22248008] |Goldman, Sachs & Co., and Drexel Burnham Lambert Inc. are lead underwriters. [22249001] |Arthur M. Goldberg said he extended his unsolicited tender offer of $32 a share tender offer, or $154.3 million, for Di Giorgio Corp. to Nov. 1. [22249002] |DIG Acquisition Corp., the New Jersey investor's acquisition vehicle, said that as of the close of business yesterday, 560,839 shares had been tendered. [22249003] |Including the stake DIG already held, DIG holds a total of about 25% of Di Giorgio's shares on a fully diluted basis. [22249004] |The offer, which also includes common and preferred stock purchase rights, was to expire last night at midnight. [22249005] |The new expiration date is the date on which DIG's financing commitments, which total about $240 million, are to expire. [22249006] |DIG is a unit of DIG Holding Corp., a unit of Rose Partners L.P. [22249007] |Mr. Goldberg is the sole general partner in Rose Partners. [22249008] |In August, Di Giorgio, a San Francisco food products and building materials marketing and distribution company, rejected Mr. Goldberg's offer as inadequate. [22249009] |In New York Stock Exchange composite trading yesterday, Di Giorgio closed at $31.50 a share, down $1.75. [22250001] |What doesn't belong here? [22250002] |A. manual typewriters, B. black-and-white snapshots, C. radio adventure shows. [22250003] |If you guessed black-and-white snapshots, you're right. [22250004] |After years of fading into the background, two-tone photography is coming back. [22250005] |Trendy magazine advertisements feature stark black-and-white photos of Hollywood celebrities pitching jeans, shoes and liquor. [22250006] |Portrait studios accustomed to shooting only in color report a rush to black-and-white portrait orders. [22250007] |And black-and-white photography classes are crowded with students. [22250008] |What's happening in photography mirrors the popularity of black and white in fashion, home furnishings and cinematography. [22250009] |On Seventh Avenue, designers have been advancing the monochrome look with clothing collections done entirely in black and white. [22250010] |And classic black-and-white movies are enjoying a comeback on videocassette tapes, spurred, in part, by the backlash against colorization of old films. [22250011] |"The pendulum is swinging back to black and white," says Richard DeMoulin, the general manager of Eastman Kodak Co.'s professional photography division. [22250012] |Until two years ago, sales of black-and-white film had been declining steadily since the 1960s. [22250013] |But last year, buoyed by increased use in advertising and other commercial applications, sales increased 5%, and they are expected to jump at least that much again this year. [22250014] |Photographic companies are scrambling to tap the resurging market, reviving some black-and-white product lines and developing new ones. [22250015] |At Kodak, which largely ignored the market for years, black-and-white film sales now account for nearly 15% of the company's $3 billion in film and paper sales annually, up from 10% three years ago. [22250016] |The Rochester, N.Y., photographic giant recently began marketing T-Max 3200, one of the fastest and most sensitive monochrome films. [22250017] |Aimed at commercial photographers, the film can be used in very low light without sacrificing quality, says Donald Franz of Photofinishing Newsletter. [22250018] |Also trying to snare a portion of the $2 billion-a-year industry is Agfa Corp., a unit of Bayer AG. [22250019] |Agfa recently signed Olympic gold medalist Florence Griffith-Joyner to endorse a new line of black-and-white paper that's geared to consumers and will compete directly with Kodak's papers. [22250020] |Slated for market by the end of the year, the paper "could have been introduced a long time ago but the market wasn't there then," says an Agfa spokesman. [22250021] |The biggest beneficiary of the black-and-white revival is likely to be International Paper Co.'s Ilford division, known in the industry for its premium products. [22250022] |Sales of Ilford's four varieties of black-and-white film this year are outpacing growth in the overall market, although the company won't say by exactly how much. [22250023] |"We hope the trend lasts," says Laurie DiCara, Ilford's marketing communications director. [22250024] |Why all the interest? [22250025] |For baby boomers who grew up being photographed in color, black and white seems eye-catching and exotic. [22250026] |"It has an archival, almost nostalgic quality to it," says Owen B. Butler, the chairman of the applied photography department at Rochester Institute of Technology. [22250027] |"You can shift out of reality with black and white," he adds. [22250028] |Such features have been especially attractive to professional photographers and marketing executives, who have been steadily increasing their use of black and white in advertising. [22250029] |Processing of black-and-white commercial film jumped 24% last year to 18.7 million rolls. [22250030] |Consider Gap Inc., whose latest ad campaign features black-and-white shots of Hollywood stars, artists and other well-known personalities modeling the retailer's jeans and T-shirts. [22250031] |Richard Crisman, the account manager for the campaign, says Gap didn't intentionally choose black and white to distinguish its ads from the color spreads of competitors. [22250032] |"We wanted to highlight the individual, not the environment," he says, "and black and white allows you to do that better than color." [22250033] |The campaign won a Cleo award as this year's best ad by a specialty retailer. [22250034] |Even food products and automobiles, which have long depended on color, are making the switch. [22250035] |Companies "feel black and white will convey a stronger statement," says Marc L. Hauser, a Chicago photographer who is working on a black-and-white print ad for Stouffer Food Corp.'s Lean Cuisine. [22250036] |Other companies that are currently using two-tone ads include American Express Co. and Epson America Inc. [22250037] |Portrait studios have also latched onto the trend. [22250038] |Using black and white, "we can make housewives look like stars," says John Perrin. [22250039] |His On-Broadway Photography studio in Portland, Ore., doubled its business last year and, he says, is booked solid for the next five. [22250040] |One customer, Dayna Brunsdon, says she spurned a color portrait for black and white because "it's more dramatic. [22250041] |I show it to my friends, and they all say 'wow.' [22250042] |It isn't ordinary like color." [22250043] |Still, most consumers aren't plunking black-and-white film into their cameras to take family snapshots. [22250044] |One big obstacle is that few drugstores develop the film anymore. [22250045] |Typically, it must be mailed to a handful of processors and may take a week or more to be processed and returned. [22250046] |Black-and-white film costs consumers a little less than color film, and processing costs the same. [22250047] |But for photofinishers, developing costs for black-and-white film are higher. [22250048] |Some companies are starting to tackle that problem. [22250049] |Ilford, for example, recently introduced a black-and-white film that can be processed quickly by color labs. [22250050] |Intent on wooing customers, the company is also increasing its sponsorship of black-and-white photography classes. [22250051] |Similarly, Agfa is sponsoring scores of photography contests at high schools and colleges, offering free black-and-white film and paper as prizes. [22250052] |And Kodak is distributing an instructional video to processors on how to develop its monochrome film more efficiently. [22250053] |Other companies are introducing related products. [22250054] |Charles Beseler Co., a leading maker of photographic enlargers, introduced last month a complete darkroom starter kit targeted at teen-agers who want to process their own black-and-white photographs. [22250055] |The kit, which has a suggested retail price of $250 and has already become a bestseller, was introduced after retailers noticed numerous requests from parents for children's photography equipment. [22250056] |"It seems computers as hobbies have waned," says Ian Brightman, Beseler's chairman and chief executive officer. [22250057] |But some industry observers believe the resurgence of black and white is only a fad. [22250058] |They cite the emergence of still electronic photography, more newspapers turning to color on their pages and measurable improvements in the quality of color prints. [22250059] |"Black and white hasn't made the same quantum leaps in technological development as color," says Mr. Butler of the Rochester Institute. [22250060] |"The color print today is far superior to prints of 10 years ago. [22250061] |You can't say the same with black and white." [22250062] |But when Popular Photography, a leading magazine for photographers, selected 15 of the greatest photos ever made for its latest issue celebrating photography's 150th anniversary, all were black and white. [22250063] |"It's got a classic spirit and carries over emotionally," says Alfred DeBat of Professional Photographers of America. [22250064] |"That's the appeal. [22251001] |McClatchy Newspapers Inc. said improvements in advertising and subscription revenue led to a 21% gain in third-quarter profit to $8.8 million, or 31 cents a share, from $7.2 million, or 25 cents a share. [22251002] |Sales rose more than 7% to $94.9 million from $88.3 million. [22251003] |The Sacramento, Calif., company also attributed improved performance to a lower effective tax rate and higher interest income. [22251004] |For the nine months, the newspaper chain had almost a 23% increase in profit to $23.6 million, or 83 cents a share, from $19.2 million, or 68 cents a share. [22251005] |Sales grew almost 7% to $279.1 million from $261.3 million. [22251006] |McClatchy publishes the Sacramento (Calif.) Bee and Tacoma (Wash.) News Tribune, and other papers in Western states. [22251007] |In composite trading on the New York Stock Exchange, the company closed at $25.25 a share, down 25 cents. [22252001] |Agip S.p.A. and Societe National Elf Aquitaine, the state oil companies of Italy and France, respectively, submitted an offer to buy Gatoil Suisse S.A. [22252002] |The price wasn't disclosed. [22252003] |A spokesman for Gatoil said that the Swiss oil concern was examining the offer, submitted last Friday, along with two other offers, also submitted last week. [22252004] |Those two offers were private and the spokesman refused to identify the bidding companies. [22252005] |The spokesman further said that at least two more offers are expected from other companies within two weeks. [22252006] |Gatoil Suisse owns an oil refinery in Switzerland with a capacity of 70,000 barrels a day, along with a network of gasoline retailing outlets. [22253001] |While Friday's plunging stock market prompted new fears about the economy's prospects, a little-known indicator that has faithfully foreshadowed the economy's ups and downs by exceptionally long lead times points to a sustained rise in overall business activity. [22253002] |The barometer, developed by analysts at Columbia University's Center for International Business Cycle Research here, reached a record high of 223.0 in August, the latest month available, and the Columbia researchers estimate that it has moved even higher since then. [22253003] |The latest reading of 223.0 was up from 222.3 in July and 215.3 as recently as March. [22253004] |The August rise marked the fifth straight monthly gain for the indicator, which uses the 1967 average as a base of 100. [22253005] |In contrast, the Commerce Department's widely followed index of leading indicators, while up in August, has fallen repeatedly since reaching a high early this year. [22253006] |Its ragged behavior through much of 1989 has prompted some forecasters to anticipate the start of a new recession perhaps before year's end. [22253007] |But the far stronger showing of the Columbia index "makes a recession any time soon highly unlikely," says Geoffrey H. Moore, the director of the Columbia facility. [22253008] |A leading authority on the business cycle, Mr. Moore also is a member of the Business Cycle Dating Group, the panel of private economists that decides for the government when expansions and recessions begin and end. [22253009] |The group normally convenes only when a change in the economy's general course seems likely. [22253010] |"No meeting is scheduled because the expansion shows no sign of going off the tracks," Mr. Moore reports. [22253011] |Based largely on the recent strength in their index, called the long leading indicator, the Columbia analysts foresee uninterrupted economic growth through the rest of this year and next year as well. [22253012] |They expect a 2.6% rise in 1990 in the gross national product, after adjustment for inflation. [22253013] |Underlying this optimism is the index's longstanding ability to signal recessions or recoveries, as the case may be, by substantially greater periods than the Commerce Department's index of leading indicators. [22253014] |Over the full post-World War II era, the Columbia index, on the average, has entered sustained declines 14 months before the onset of recessions and turned up eight months before recoveries. [22253015] |The comparable lead times for the Commerce index, whose components include the stock market, are far shorter -- 10 months before recessions and only three months before recoveries. [22253016] |The Columbia economists also have reconstructed how the long leading index would have behaved, had it existed, in 1929, before the stock market crash in October that ushered in the Great Depression. [22253017] |The indicator reached a peak in January 1929 and then fell steadily up to and through the crash. [22253018] |"It was an entirely different pattern from what we're seeing now," Mr. Moore says. [22253019] |A major source of the recent strength in the long leading indicator has been the performance of the Dow Jones corporate bond-price index, which is not a part of the Commerce index. [22253020] |In August, the bond measure was at its highest monthly average since early 1987. [22253021] |It also rose last Friday, while the stock market sagged. [22253022] |Other components of the long leading indicator include a ratio of prices to unit labor costs in manufacturing industries, the M2 version of the money supply, adjusted for inflation, and the volume of new home-building permits. [22253023] |Notably absent from the Columbia index is the stock market, which Mr. Moore says "is simply no longer such a good indicator of the economy's long-range prospects, though it still is useful for anticipating some short-run twists and turns." [22253024] |As recently as 1975, the stock market -- as reflected in the Standard & Poor's index of 500 common stocks -- was rated by the National Bureau of Economic Research as the best of the 12 leading indicators that then made up the Commerce index. [22253025] |It was assigned a mark of 80 out of a possible 100, compared with scores ranging as low as 69 for the other components. [22253026] |The stock market has lost some precursory power, analysts at the Columbia center claim, because of the growing impact of international developments. [22253027] |"Stocks have become more sensitive to factors not directly tied to the domestic economy," Mr. Moore says, citing the exchange rate for the dollar on currency markets, the foreign-trade balance and inflows of foreign capital. [22253028] |He also feels that the rise of such computer-based practices as program trading has diminished the stock market's relevancy to the economic outlook. [22254001] |BSN S.A., a leading French food group, said it agreed to acquire Birkel G.m.b.H., a West German pasta maker. [22254002] |The value of the acquisition wasn't disclosed. [22254003] |The move is in line with BSN's strategy of gradually building its share of the European pasta market through external growth. [22254004] |BSN will initially acquire a 15% interest in Birkel, a closely held concern. [22254005] |The French group has an agreement giving it the right to buy all the shares outstanding, and this could be completed within a few months, a BSN spokeswoman said. [22254006] |The takeover was submitted for approval by the West German cartel office, BSN said. [22254007] |Birkel is West Germany's second-biggest producer of pasta, with sales of 250 million marks ($133.4 million) in 1988. [22254008] |It has 750 workers at three production units in southwest Germany, and is that nation's leading producer of pasta sauces. [22254009] |The acquisition strengthens BSN's position in the European pasta market. [22254010] |The French group currently ranks second after Barilla Group of Italy, whose sales are chiefly in the Italian market. [22255001] |Moody's Investors Service Inc. said it reduced its rating on $281 million of senior and subordinated debt of this thrift holding company, to C from Ca, saying it believes bondholders will recover only "negligible principal." [22255002] |The agency said it confirmed American Continental's preferred stock rating at C. [22255003] |American Continental's thrift unit, Los Angeles-based Lincoln Savings & Loan Association, is in receivership and the parent company has filed for protection from creditor lawsuits under Chapter 11 of the federal Bankruptcy Code. [22255004] |CENTRUST SAVINGS BANK (Miami) -- [22255005] |Moody's Investors Service Inc. downgraded its ratings on the subordinated debt of CenTrust to Caa from B-3. [22255006] |The rating agency also reduced the ratings for long-term deposits to B-3 from Ba-3 and for preferred stock to Ca from Caa. [22255007] |The rating agency said about $85 million in securities was affected. [22255008] |The downgrades were prompted, Moody's said, by the continuing turmoil in the junk bond market and the suspension of dividends on CenTrust's preferred stock. [22255009] |Moody's also said it believed the proposed sale of 63 CenTrust branches to Great Western Bank could, if completed, endanger the thrift's funding and market position. [22256001] |THE STOCK MARKET AVOIDED a repeat of Black Monday as prices recovered from an early slide, spurred by bargain-hunting institutions and program traders. [22256002] |The Dow Jones industrials closed up 88.12 points, at 2657.38, the fourth-biggest gain ever, after being down as much as 63.52 points in the morning. [22256003] |The rally erased about half of Friday's 190.58-point plunge, but analysts are cautious about the market's outlook. [22256004] |The dollar also rebounded, while bond prices plummeted and Treasury bill rates soared. [22256005] |Junk bonds also recovered somewhat, though trading remained stalled. [22256006] |Gold also rose. [22256007] |Tokyo stock prices bounced back in early trading Tuesday following a 1.8% plunge on Monday. [22256008] |The dollar also moved higher in Tokyo. [22256009] |Donald Trump withdrew his $7.54 billion offer for American Air, citing the "recent change in market conditions." [22256010] |AMR slid $22.125, to $76.50. [22256011] |Also, a UAL group tried to get financing for a lower bid, possibly $250 a share. [22256012] |UAL fell $56.875, to $222.875. [22256013] |Leveraged buy-outs of airlines would be subject to approval by the transportation secretary under a bill passed by a House subcommittee. [22256014] |IBM's earnings tumbled 30% in the third quarter, slightly more than expected. [22256015] |The computer giant partly cited a stronger dollar and a delay in shipping a new high-end disk drive. [22256016] |Analysts are downbeat about IBM's outlook for the next few quarters. [22256017] |U.S. auto makers plan to decrease car production 10.4% in the fourth quarter, with virtually all the decline coming from the Big Three. [22256018] |Output at Japanese-owned and managed plants in the U.S. is due to rise 42%. [22256019] |Budget director Darman said he won't give federal agencies much leeway in coping with Gramm-Rudman spending cuts, which took effect yesterday. [22256020] |Darman hopes to prod Congress to finish a deficit plan. [22256021] |The S&L bailout agency would be restricted by a new bill in how it raises capital. [22256022] |The Ways and Means plan would create another possible obstacle to selling sick thrifts. [22256023] |A natural gas rule was struck down by a federal appeals court. [22256024] |The regulation had prevented pipeline firms from passing part of $1 billion in costs along to customers. [22256025] |The Supreme Court agreed to decide whether a federal court may dismantle a merger that has won regulatory approval but been ruled anticompetitive in a private suit. [22256026] |Merrill Lynch's profit slid 37% in the third quarter. [22256027] |Bear Stearns posted a 7.5% gain, while PaineWebber had a decline due to a year-ago gain. [22256028] |Blue Arrow of Britain plans to return to the name Manpower and take a big write-off. [22256029] |The moves may help the firm solidify its dominance of the U.S. temporary-help market. [22256030] |J.P. Morgan posted a $1.82 billion loss for the third quarter, reflecting a big addition to loan-loss reserves. [22256031] |NCNB's profit more than doubled. [22256032] |K mart agreed to acquire Pace Membership Warehouse for $322 million, expanding its presence in the growing wholesale-store business. [22256033] |Markets -- [22256034] |Stocks: Volume 416,290,000 shares. [22256035] |Dow Jones industrials 2657.38, up 88.12; transportation 1304.23, off 102.06; utilities 214.73, up 2.77. [22256036] |Bonds: Shearson Lehman Hutton Treasury index 3393.51, off [22256037] |Commodities: Dow Jones futures index 129.72, off 0.15; spot index 130.16, up 0.91. [22256038] |Dollar: 141.85 yen, off 0.25; 1.8685 marks, off 0.0055. [22257001] |Monday, October 16, 1989 [22257002] |The key U.S. and foreign annual interest rates below are a guide to general levels but don't always represent actual transactions. [22257003] |PRIME RATE: 10 1/2%. [22257004] |The base rate on corporate loans at large U.S. money center commercial banks. [22257005] |FEDERAL FUNDS: 8 3/4% high, 8 1/2% low, 8 5/8% near closing bid, 8 3/4% offered. [22257006] |Reserves traded among commercial banks for overnight use in amounts of $1 million or more. [22257007] |Source: Fulton Prebon (U.S.A.) Inc. [22257008] |DISCOUNT RATE: 7%. [22257009] |The charge on loans to depository institutions by the New York Federal Reserve Bank. [22257010] |CALL MONEY: 9 3/4% to 10%. [22257011] |The charge on loans to brokers on stock exchange collateral. [22257012] |COMMERCIAL PAPER placed directly by General Motors Acceptance Corp.:8.30% 5 to 44 days; 8.20% 45 to 59 days; 8% 60 to 89 days; 7.875% 90 to 119 days; 7.75% 120 to 149 days; 7.625% 150 to 179 days; 7.375% 180 to 270 days. [22257013] |COMMERCIAL PAPER: High-grade unsecured notes sold through dealers by major corporations in multiples of $1,000:8.40% 30 days; 8.33% 60 days; 8.26% 90 days. [22257014] |CERTIFICATES OF DEPOSIT: 8.05% one month; 8.02% two months; 8% three months; 7.98% six months; 7.95% one year. [22257015] |Average of top rates paid by major New York banks on primary new issues of negotiable C.D.s, usually on amounts of $1 million and more. [22257016] |The minimum unit is $100,000. [22257017] |Typical rates in the secondary market:8.40% one month; 8.40% three months; 8.40% six months. [22257018] |BANKERS ACCEPTANCES: 8.40% 30 days; 8.35% 60 days; 8.27% 90 days; 8.20% 120 days; 8.15% 150 days; 8.02% 180 days. [22257019] |Negotiable, bank-backed business credit instruments typically financing an import order. [22257020] |LONDON LATE EURODOLLARS: 8 5/8% to 8 1/2% one month; 8 5/8% to 8 1/2% two months; 8 9/16% to 8 7/16% three months; 8 1/2% to 8 3/8% four months; 8 1/2% to 8 3/8% five months; 8 1/2% to 8 3/8% six months. [22257021] |LONDON INTERBANK OFFERED RATES (LIBOR): 8 1/2% one month; 8 1/2% three months; 8 7/16% six months; 8 3/8% one year. [22257022] |The average of interbank offered rates for dollar deposits in the London market based on quotations at five major banks. [22257023] |FOREIGN PRIME RATES: Canada 13.50%; Germany 8.50%; Japan 4.875%; Switzerland 8.50%; Britain 15%. [22257024] |These rate indications aren't directly comparable; lending practices vary widely by location. [22257025] |TREASURY BILLS: Results of the Monday, October 16, 1989, auction of short-term U.S. government bills, sold at a discount from face value in units of $10,000 to $1 million: 7.37%, 13 weeks; 7.42%, 26 weeks. [22257026] |FEDERAL HOME LOAN MORTGAGE CORP. (Freddie Mac): Posted yields on 30-year mortgage commitments for delivery within 30 days. [22257027] |9.83%, standard conventional fixedrate mortgages; 7.875%, 2% rate capped one-year adjustable rate mortgages. [22257028] |Source: Telerate Systems Inc. [22257029] |FEDERAL NATIONAL MORTGAGE ASSOCIATION (Fannie Mae): Posted yields on 30 year mortgage commitments for delivery within 30 days (priced at par).9.82%, standard conventional fixed rate-mortgages; 8.70%, 6/2 rate capped one-year adjustable rate mortgages. [22257030] |Source: Telerate Systems Inc. [22257031] |MERRILL LYNCH READY ASSETS TRUST: 8.49%. [22257032] |Annualized average rate of return after expenses for the past 30 days; not a forecast of future returns. [22258001] |Intel Corp. said it reached an agreement with Alliant Computer Systems Corp. to develop software standards for Intel's i860 microprocessor. [22258002] |The i860, introduced earlier this year, is Intel's entry in the crowded market for reduced instruction set computing, or RISC, computers. [22258003] |Intel, based in Santa Clara, Calif., is the market leader for traditional microprocessors with its 8086 family that forms the heart of IBM-compatible personal computers. [22258004] |Under the agreement, Intel will invest $3 million to acquire a 4% stake in Alliant, a maker of minisupercomputers for scientists and engineers. [22258005] |Alliant, based in Littleton, Mass., will license its parallel-computing technologies to Intel, providing users a way to let many i860 microprocessors in a single computer work on a problem simultaneously. [22258006] |Alliant said it plans to use the microprocessor in future products. [22258007] |It declined to discuss its plans for upgrading its current product line. [22259001] |Omnicare Inc., which intends to expand its position in the medical and dental markets, said it acquired a cotton and gauze products division from closely held Sterile Products Corp. for $8.2 million. [22259002] |Omnicare said it expects the division to add "substantial sales volume and to make a positive contribution to our earnings in 1990 and beyond." [22259003] |In 1988 the Cincinnati company earned $3.1 million, or 32 cents a share, on revenue of $148.5 million. [22259004] |Omnicare said the division operates under the trade name ACCO and supplies the medical and dental markets. [22259005] |The business, based in St. Louis, had sales of more than $14 million in the fiscal year ended March 31, Omnicare said. [22260001] |Burmah Oil PLC, a British independent oil and specialty chemicals marketing concern, said SHV Holdings N.V. of the Netherlands has built up a 6.7% stake in the company. [22260002] |James Alexander, a Burmah spokesman, said SHV had previously owned "a little under 5%" of Burmah for about two years. [22260003] |The Dutch company hadn't notified Burmah of its reason for increasing the stake, he said. [22260004] |SHV, which last year merged its North Sea oil and gas operations with those of Calor Group PLC, has been pegged by speculators as a possible suitor for Burmah Oil in recent weeks. [22260005] |SHV also owns 40% of Calor. [22260006] |Burmah, which owns the Castrol brand of lubricant oils, reported a 17% rise in net income to #43.5 million ($68.3 million) in the first half. [22261001] |J.P. Industries Inc. said it signed a definitive agreement to sell its Builders' Hardware Group to closely held Nalcor Inc. of Beverly Hills, Calif. [22261002] |Terms weren't disclosed, but a J.P. Industries spokesman said the amount J.P. Industries will get for the group is "a little better than expected by the marketplace, and the marketplace had been expecting $25 million to $30 million." [22261003] |The group consists of Weslock Corp. and JPI Modern Inc. [22261004] |J.P. Industries, which is based in Ann Arbor, Mich., said the sale completes a previously announced program to divest itself of its hardware and plumbing supplies operations. [22261005] |The company's remaining business is the manufacture and sale of engine and transmissions products for industrial and transportation applications. [22262001] |Citing a $3.1 million provision for doubtful accounts, Dallas-based National Heritage Inc. posted a loss for its fourth quarter ended June 30. [22262002] |A unit of troubled Southmark Corp., the operator of nursing homes and retirement centers said it sustained a net loss of $1.6 million, or nine cents a share, compared with net income of $1.3 million, or eight cents a share, a year earlier. [22262003] |Operating revenue rose 13% to $22.2 million from $19.7 million in the year-earlier quarter. [22262004] |The company said the $3.1 million reserve was created to reflect doubt about the collectability of receivables owed to National Heritage by some of the real estate partnerships it manages. [22262005] |The company also said expenses incurred by the previous board and management in the recent contest for control were recognized primarily in the first quarter ended Sept. 30. [22262006] |National Heritage stock fell 12.5 cents yesterday to close at $1.375 a share in New York Stock Exchange composite trading. [22263001] |United Biscuits (Holdings) PLC, a British food producer, announced the creation of a European group to bring together its trading interests in the region. [22263002] |The new group will comprise all of United Biscuit's manufacturing and marketing operations in the food sector apart from those based in the U.S. [22263003] |United Biscuits said the combined group, which will include businesses such as McVities biscuits and Terry's confectionery, will have annual sales of more than #1.5 billion ($2.35 billion) and trading profit of more than #160 million ($251 million). [22263004] |"The new structure will enable United Biscuits to focus clearly upon opportunities for planned growth during the 1990s," said Bob Clarke, deputy chairman and group chief executive. [22263005] |Last month, United Biscuits agreed to sell its entire restaurant operations to Grand Metropolitan PLC for #180 million. [22264001] |An American journalist now is standing trial in Namibia. [22264002] |This is the place that world opinion has been celebrating over in the expectation that it's going to hold an election. [22264003] |The most likely winner will be the Marxist-dominated SWAPO rebels. [22264004] |The U.S. journalist's "crime" was writing that the head of the commission charged with overseeing the election's fairness, Bryan O'Linn, was openly sympathetic to SWAPO. [22264005] |Shortly after that, Mr. O'Linn had Scott Stanley arrested and his passport confiscated. [22264006] |Mr. Stanley is on trial over charges that he violated a proclamation, issued by the South African administrator general earlier this year, which made it a crime punishable by two years in prison for any person to "insult, disparate or belittle" the election commission. [22264007] |The Stanley affair doesn't bode well for the future of democracy or freedom of anything in Namibia when SWAPO starts running the government. [22264008] |To the extent Mr. Stanley has done anything wrong, it may be that he is out of step with the consensus of world intellectuals that the Namibian guerrillas were above all else the victims of suppression by neighboring South Africa. [22264009] |SWAPO has enjoyed favorable Western media treatment ever since the U.N. General Assembly declared it the "sole, authentic representative" of Namibia's people in [22264010] |Last year, the U.S. brokered a peace settlement to remove Cuba's "Afrika Korps" from Angola and hold "free and fair" elections that would end South Africa's control of Namibia. [22264011] |The elections are set for Nov. 7. [22264012] |In July, Mr. Stanley, editor of American Press International, a Washington D.C.-based conservative wire service, visited Namibia to report on the U.N.-monitored election campaign. [22264013] |He interviewed Mr. O'Linn, head of a commission charged with investigating electoral intimidation, and reported that Mr. O'Linn was openly sympathetic to SWAPO and indeed had defended its leaders in court. [22264014] |After Mr. Stanley's article was published in two Namibian newspapers, Mr. O'Linn had criminal charges brought against their editors, publisher and lawyer. [22264015] |Mr. Stanley was arrested and charged along with the others when he returned to Namibia this month. [22264016] |Both the State Department and the Lawyers Committee for Freedom of the Press have protested Mr. Stanley's detention. [22264017] |Mr. Stanley's arrest is the latest in a series of incidents that threaten to derail Namibia's elections. [22264018] |Both South African and SWAPO extremists are intimidating voters. [22264019] |The U.S. is in the habit of arranging peace settlements and then washing its hands over the tragic results. [22264020] |It now has the chance to redress that record in Namibia. [22264021] |State and the human-rights community should insist that Mr. Stanley and his fellow defendants be released and that the United Nation's monitors make certain that Mr. O'Linn's commission investigates election complaints from all sides. [22265001] |Commodity futures prices generally reflected the stability of the stock market following its plunge Friday. [22265002] |Yesterday, the stock market's influence at first created nervousness. [22265003] |Later, however, it became more of an undercurrent than a dominating force as individual markets reacted more to their own factors. [22265004] |Gold, the traditional haven in times of financial crisis, continued its inverse lockstep with the dollar, rising early in the day as the currency fell, and then giving up some of its gains as the dollar recovered. [22265005] |Copper and crude oil reacted sharply to the concern that a crash yesterday could have a potentially devastating effect on the economy. [22265006] |Copper fell and showed little rebound through the day as one of the major supply problems that had been supporting prices appeared to be solved. [22265007] |Crude oil declined early, but as the stock market retained early gains, it, too, became stronger, ending with a small net loss. [22265008] |Trading in cotton and sugar was nervous and showed small declines. [22265009] |In Chicago, grain and soybean prices rose slightly. [22265010] |Livestock and meat prices, however, dropped on concern that a financial crisis would cut consumption of beef and pork. [22265011] |In commodity markets yesterday: PRECIOUS METALS: Futures prices were moderately higher as gold gave up some of its early gains and platinum behaved independently, first falling and then later rising. [22265012] |Silver performed quietly. [22265013] |The spot October gold price rose $4 to $367.30 an ounce. [22265014] |The more active December delivery gold settled with a gain of $3.90 an ounce at $371.20, after trading as high as $374. [22265015] |December silver was up 2.3 cents an ounce at $5.163. [22265016] |Platinum behaved more like an industrial metal, easing early on concern over a possible weaker economy, but recovering later, as the stock market strengthened. [22265017] |Gold was nowhere the spectacular performer it was two years ago on Black Monday. [22265018] |For one thing, last Friday, precious metals markets closed before the stock market went into its late-in-the-day nose dive, so it couldn't react to it. [22265019] |Back on Friday, Oct. 16, l987, the stock market declined during the day, and gold prices surged as the stock market fell. [22265020] |The October 1987 contract that day rose as much as $8.70 to as high as $471.60, and the more deferred positions, due to mature as late as March 1989, rose as much as $9.60. [22265021] |On Black Monday, Oct. 19, 1987, the October contract tacked on further gains, rising to as high as $491.50 for a gain of almost $20 on top of the Friday advances, before giving up almost $10 of that at the close. [22265022] |Yesterday's October gain of $4 was miniscule compared with that. [22265023] |One analyst, Peter Cardillo of Josephthal & Co., New York, said the gold market already had some good price-supporting technical factors that would have caused prices to rise, with or without the stock market. [22265024] |"What the stock market did was cause the rise to take place earlier than it would have happened," said Mr. Cardillo. [22265025] |There's a good chance that gold will retain its gains and rise further, he said. [22265026] |He expects a drop in interest rates, which would help gold by keeping the dollar from rising. [22265027] |Finally, according to Mr. Cardillo, the impact of the strong dollar should be reflected in reduced exports in the August merchandise trade deficit, when the figures are released today. [22265028] |This would be damaging to the dollar and supportive for gold, he said. [22265029] |ENERGY: [22265030] |Worried that Friday's 190-point stock market plunge might be a harbinger of things to come for the economy, petroleum futures traders called a halt to the recent string of increases in crude oil futures prices. [22265031] |The U.S. benchmark crude, West Texas Intermediate, closed at $20.59 a barrel for November delivery, down 30 cents. [22265032] |Some analysts said crude was due for a correction anyhow, following several days of significant gains. [22265033] |But most market observers agreed that Friday's stock market drop is what dampened spirits in the petroleum pits yesterday. [22265034] |Until yesterday, futures prices had been headed up on expectations that world oil demand will continue to be strong. [22265035] |The Organization of Petroleum Exporting Countries increased its production ceiling for the fourth quarter based on projections of robust demand. [22265036] |So any bearish indicator, such as Friday's precipitous drop in the stock market, sends shivers through the oil markets as well. [22265037] |Indeed, after reacting early in the trading day to Friday's plummet, futures prices firmed up again as traders took note of the stock market's partial recovery yesterday. [22265038] |COPPER: [22265039] |Futures prices fell and showed little rebound as one major labor problem that had been underpinning prices appeared to be solved. [22265040] |The December contract declined 3.05 cents a pound to $1.2745. [22265041] |Prices were down from the outset of trading on concern that a drop in the stock market might create a weakened economy and a consequent reduction in copper use. [22265042] |But the recovery in the stock market provided little help for copper as word spread that a three-month strike at the Highland Valley mine in British Columbia was about over, according to an analyst. [22265043] |Highland Valley is a large Canadian producer and principal supplier to Japan, which recently began seeking copper elsewhere as its inventories shrank. [22265044] |Last week it was reported that company and union negotiations had overcome the major hurdle, the contracting out of work by the company. [22265045] |Now, the analyst said, only minor points remain to be cleaned up. [22265046] |"For all intents and purposes, an agreement appears to have been achieved," he said. [22265047] |Copper inventories in New York's Commodity Exchange warehouses rose yesterday by 516 tons, to 10,004 tons. [22265048] |London Metal Exchange copper inventories last week declined 13,575 tons, to 89,300 tons. [22265049] |The LME stocks decline was about as expected, but the Comex gain wasn't. [22265050] |However, this was brushed aside by concern over the stock market, the analyst said. [22265051] |At one point in futures trading, as the stock market firmed, the December contract rose to as high as $1.2965, but it wasn't able to sustain the gain. [22265052] |"It was simply overbought," he said, and selling by funds that are computer guided helped depress prices. [22265053] |COTTON: [22265054] |Futures prices eased, more in reaction to Hurricane Jerry than to any influence of the stock market. [22265055] |The December contract ended with a loss of 0.22 cent a pound, at 74.48 cents. [22265056] |Technical considerations following the hurricane, which was a factor in the market Friday, caused prices to decline yesterday, said Ernest Simon, cotton specialist for Prudential-Bache Securities, New York. [22265057] |Prices rose sharply Friday as the storm approached Texas and Louisiana, which is part of the Mississippi Delta cotton-growing area. [22265058] |However, after absorbing the potential effect of the hurricane, prices began to slip late Friday, Mr. Simon said. [22265059] |That selling continued yesterday and kept prices under pressure, he said. [22265060] |Colder weather is being predicted for the high plains of Texas and the northern states of the Delta during the coming weekend, Mr. Simon said. [22265061] |That hasn't yet captured traders' attention, he added. [22265062] |SUGAR: [22265063] |Futures prices declined. [22265064] |The March contract was off 0.32 cent a pound at 13.97 cents. [22265065] |At one point in early trading the March price rose to as high as 14.22 cents when the stock market recovered, but the price then fell back. [22265066] |A price-depressing factor, one analyst said, was that India, which had been expected to buy around 200,000 tons of sugar in the world market, didn't make any purchases. [22265067] |India recently bought 200,000 tons and was expected to buy more, the analyst said. [22265068] |Another analyst thought that India may have pulled back because of the concern over the stock market. [22265069] |"India may have felt that if there was a severe drop in the stock market and it affected sugar, it could buy at lower prices," said Judith Ganes, analyst for Shearson Lehman Hutton, New York. [22265070] |At any rate, she added, "India needs the sugar, so it will be in sooner or later to buy it." [22265071] |FARM PRODUCTS: [22265072] |The prices of cattle and hog futures contracts dropped sharply because traders speculated that the stock market plunge Friday will linger in the minds of U.S. consumers long enough to prompt them to rein in their spending at the supermarket, which would hurt demand for beef and pork. [22265073] |The price of the hog contract for October delivery dropped its maximum permissible daily limit of 1.5 cents a pound. [22265074] |The prices of most grain futures contracts rose slightly yesterday out of relief that the stock market was showing signs of recovering. [22265075] |Earlier in the session, the prices of several soybean contracts set new lows. [22265076] |A broad rally began when several major processors began buying futures contracts, apparently to take advantage of the price dip. [22266001] |Knight-Ridder Inc. said it would report increased earnings per share for the third quarter, contrary to reported analysts' comments that the publishing company's earnings would be down. [22266002] |A company spokesman said he believed the confusion was caused when James Batten, Knight-Ridder's chairman and chief executive, told New York analysts two weeks ago that Knight-Ridder's earnings per share for the first nine months of 1989 would "be behind a little bit" from like period of [22266003] |The Knight-Ridder spokesman said the third-quarter earnings that the company plans to report Oct. 24 are expected to be up. [22266004] |The spokesman said he was "comfortable" with revised analysts' projections that the company would report earnings of between 62 cents and 64 cents a share, compared with the 53 cents a share it reported for the 1988 third quarter. [22266005] |Knight-Ridder said it agreed with estimates that net income for all of 1989 would be around $2.86 a share, compared with $2.59 a share a year earlier. [22266006] |In New York Stock Exchange composite trading yesterday, Knight-Ridder closed at $51.75, down 37.5 cents. [22267001] |DD Acquisition Corp. said it extended its $45-a-share offer for Dunkin' Donuts Inc. to Nov. 1 from yesterday. [22267002] |The offer has an indicated value of $268 million. [22267003] |DD Acquisition is a partnership of Unicorp Canada Corp.'s Kingsbridge Capital Group unit and Cara Operations Ltd. [22267004] |As previously reported, under the terms of a confidentiality agreement with Dunkin' Donuts, the partners agreed to keep their offer open until Nov. 1, and not to acquire any additional shares except through a tender offer expiring on that date. [22267005] |DD Acquisition said that it already owns 15% of the common shares of the doughnut shop chain and that as of the close of business Friday an additional 11% had been tendered to its offer. [22267006] |Dunkin' Donuts is based in Randolph, Mass. [22267007] |Cara Operations, a food services concern, and Unicorp, a holding company with interests in oil and natural gas and financial services, are based in Toronto. [22268001] |Golden West Financial Corp., riding above the turbulence that has troubled most of the thrift industry, posted a 16% increase of third-quarter earnings to $41.8 millon, or 66 cents a share. [22268002] |The company earned $36 million, or 57 cents a share, in the year-ago quarter. [22268003] |Herbert M. Sandler, chairman and chief executive officer of the Oakland, Calif., savings-and-loan holding company, credited the high number of loans added to the company's portfolio over the last 12 months for broadening its earning asset base and improving profit performance. [22268004] |However, the executive noted that slackening demand for new mortgages depressed new loan originations to $1 billion, 30% below the same period last year. [22268005] |In savings activity, Mr. Sandler said consumer deposits have enjoyed a steady increase throughout 1989, and topped $11 billion at quarter's end for the first time in the company's history. [22268006] |Deposit growth amounted to $393 million, more than double the year-ago figure. [22269001] |Whirlpool Corp., Benton Harbor, Mich., said it has developed a process to recover environmentally harmful chlorofluorocarbons, or CFCs, that previously entered the atmosphere during in-home repair of refrigerators and freezers. [22269002] |The maker of home appliances said the process, which involves the use of a multilayer plastic bag during repairs to capture the gaseous substance and transport it to a recycling center, is already in use at a number of its service centers, and will be available to all authorized repair centers by spring. [22269003] |Earlier repairs vented the CFCs out of the home through a hose directly into the atmosphere. [22269004] |CFCs are widely used as solvents, coolants and fire suppressants. [22269005] |But their use has been linked to a potentially dangerous depletion of the Earth's ozone layer, and a number of companies are seeking to curtail use, or at least emission, of the substance. [22269006] |Whirpool said, "We see this process as a small but important step toward eventual elimination of CFC use in appliance manufacture. [22270001] |Maxus Energy Corp., Dallas, said it discovered a new oil field northeast of its previously discovered Intan Field in the southeast Sumatra area of Indonesia. [22270002] |Maxus said it didn't run a production test on the three discovery wells it drilled in the field, which is about 1.6 miles from the Intan Field, because the wells are similar to others drilled at its Intan and Widuri fields. [22270003] |However, Maxus said it believes the reserves in the field are about 10 million barrels of oil. [22270004] |The Intan Field has estimated reserves of 50 million barrels and the Widuri Field has estimated reserves of 225 million barrels. [22270005] |Maxus, an independent oil and gas concern, is the operator and owns a 56% interest in the new field, called Northeast Intan. [22270006] |Other interests are owned by BP Petroleum Development (SES) Ltd., C. Itoh Energy Co. Ltd., Deminex Sumatra OEL G.m.b.H., Hispanoil (Sumatra) Production Ltd., Hudbay Oil (Indonesia) Ltd., Inpex Sumatra Co. Ltd., Lasmo Sumatra Ltd., Sunda Shell, TCR Sumat A.G. and Warrior Oil Co. [22270007] |The production-sharing contract area is held with Pertamina, the Indonesian state oil company. [22271001] |Environmental Systems Co. said it is restating its results to reduce its reported net income for the first nine months of its fiscal year after discovering it took tax credits that already had been taken last year. [22271002] |The Little Rock, Ark., hazardous-waste services company said the restatement will reduce its net for the nine months ended July 31 to $2.5 million, or 17 cents a share, from $3.7 million, or 26 cents a share. [22271003] |Net for the third quarter, restated, is $1.6 million, or 10 cents a share. [22271004] |The company previously reported net of $2.3 million, or 15 cents a share. [22271005] |The company said that for financial reporting purposes last year it took tax credits that will be recognized for tax purposes this year. [22271006] |But because of confusion, it took those credits again in reporting its results through the first nine months. [22271007] |Jack W. Forrest, Environmental Systems president and chief executive officer, said the change increases the company's effective tax rate to about 35% from 20%. [22272001] |Memotec Data Inc. said it signed a definitive merger agreement with ISI Systems Inc. under which Memotec will acquire ISI for $20 (U.S.) a share, or about $130 million, in cash and securities. [22272002] |In American Stock Exchange composite trading, ISI closed up $3.125 at $18.625. [22272003] |In Montreal Exchange trading, Memotec closed unchanged at 10.625 Canadian dollars (US$9.05). [22272004] |Memotec said under the agreement, ISI, a Braintree, Mass., provider of computer software and services to the insurance industry, will merge with a U.S. unit of Memotec created for that purpose. [22272005] |Memotec is a Montreal-based maker of telecommunications products and provider of telecommunications and computer services. [22272006] |Memotec said the agreement calls for it to make a $20-a-share cash tender offer for all shares outstanding of ISI. [22272007] |But it said Charles Johnston, ISI chairman and president, agreed to sell his 60% stake in ISI to Memotec upon completion of the tender offer for a combination of cash, Memotec stock and debentures. [22272008] |Memotec said the tender offer is conditioned on, among other things, holders tendering at least 15% of the shares outstanding, other than the shares held by Mr. Johnston. [22272009] |ISI said its board has instructed management to accept inquiries from any others interested in making a bid. [22272010] |ISI said it can withdraw from the merger agreement with Memotec if a better bid surfaces. [22273001] |CMS Energy Corp., Jackson, Mich., said it has resumed the purchase of its common stock under a program approved by its directors in 1987. [22273002] |At the time of the original announcement, CMS said its board authorized the purchase of as many as five million of its shares. [22273003] |A spokesman said 2.6 million shares have been purchased since then. [22273004] |The company said it will buy additional shares "from time to time in the open market or in private transactions at prevailing market prices." [22273005] |In composite trading on the New York Stock Exchange, CMS Energy closed at $34.375 a share, down 62.5 cents, from the closing price of $37.375 a share on Thursday, before Friday's plunge. [22273006] |The utility company currently has about 82.1 million shares outstanding. [22273007] |Morgan Stanley & Co. will act as the exclusive broker for the repurchase. [22274001] |Hughes Aircraft Co., a unit of General Motors Corp., said it agreed to purchase the Electro-Optics Technology division of Perkin-Elmer Corp. [22274002] |Terms of the agreement weren't disclosed. [22274003] |But for the fiscal year ended July 31, 1988, the most recent period for which results were broken out, the Perkin-Elmer unit accounted for more than half the $145 million in sales recorded by the company's government systems sector. [22274004] |Perkin-Elmer, which is based in Norwalk, Conn., said the sale of the Danbury, Conn., unit is consistent with its restructuring strategy announced in April. [22274005] |In addition to making electro-optical systems, the unit also makes laser warning receivers. [22274006] |These are used aboard military helicopters to warn pilots that a laser weapon has been focused on them. [22274007] |Hughes of Los Angeles said the PerkinElmer unit's work complements efforts by its Electro-Optical and Data Systems group, which makes infrared sensors, military lasers and night vision equipment. [22274008] |Hughes said it expects the sale to close by year end. [22275001] |The Communications Workers of America ratified a new regional contract and all but one of the local agreements with Bell Atlantic Corp. [22275002] |CWA's New Jersey Commercial local, which represents about 2,500 service representatives and marketing employees, rejected the tentative agreement. [22275003] |Both the union and the regional telephone company said they were working together to resolve differences. [22275004] |The new three-year contracts, which replace ones that expired Aug. 5, cover 41,000 Bell Atlantic employees. [22275005] |The ratification follows a 23-day strike against the Philadelphia-based company. [22275006] |Meanwhile, CWA and International Brotherhood of Electrical Workers members remain on strike against Nynex Corp., the New York-based regional phone company. [22275007] |The unions and the company last week agreed to mediation. [22275008] |The CWA represents 40,000 Nynex workers and the IBEW represents 20,000 workers. [22276001] |For the moment, at least, euphoria has replaced anxiety on Wall Street. [22276002] |The Dow Jones Industrial Average jumped sharply yesterday to close at 2657.38, panic didn't sweep the world's markets, and investors large and small seemed to accept Friday's dizzying 190-point plunge as a sharp correction, not a calamity. [22276003] |Many went bargain-hunting. [22276004] |Among those sighing with relief was John H. Gutfreund, chairman of Salomon Brothers, who took to the firm's trading floor to monitor yesterday's events. [22276005] |As the rally gained strength at 3:15 p.m., he smiled broadly, brandished his unlit cigar and slapped Stanley Shopkorn, his top stock trader, on the back. [22276006] |At first, it seemed as if history might repeat itself. [22276007] |As trading opened yesterday morning on the Big Board, stocks of many of the nation's biggest companies couldn't open for trading because a wave of sell orders was overwhelming buyers. [22276008] |By 10:10, the Dow Industrials were off 63.52 points, and the stock of UAL Corp., whose troubles had kicked off Friday's plunge, still hadn't opened. [22276009] |But then, as quickly as the Dow had fallen, it began to turn around. [22276010] |It ended with a gain of 88.12 points. [22276011] |By the market's close, volume on the New York exchange totaled more than 416 million, the fourth highest on record. [22276012] |The Big Board handled the huge volume without any obvious strain, in sharp contrast to Black Monday of 1987. [22276013] |But the rally was largely confined to the blue-chip stocks, which had been hard hit during Friday's selling frenzy. [22276014] |Overall, more Big Board stocks lost money than gained. [22276015] |And many arbitragers, already reeling from Friday's collapse of the UAL deal, were further hurt yesterday when a proposed takeover of AMR Corp., the parent of American Airlines, collapsed. [22276016] |Indeed, the Dow Jones Transportation Average plunged 102.06 points, its second-worst drop in history. [22276017] |World-wide, trading was generally manageable. [22276018] |The Frankfurt stock exchange was hardest hit of the major markets, with blue chips there falling 12.8%. [22276019] |In London, a midday rally left the market's major index off 3.2%, and Tokyo's leading stock index fell only 1.8% in surprisingly lackluster trading. [22276020] |Other, more thinly traded Asian markets were hit harder than Tokyo's, but there were no free-fall declines. [22276021] |Investors big and small say they learned valuable lessons since the 1987 crash: In this age of computerized trading, huge corrections or runups in a few hours' time must be expected. [22276022] |What's more, such short-term cataclysms are survivable and are no cause for panic selling. [22276023] |Stephen Boesel, a major money manager for T. Rowe Price in Baltimore, says, "There was less panic than in 1987: We had been through it once." [22276024] |In Somerset, Wis., Adrian Sween, who owns a supplier of nursing-home equipment and isn't active in the stock market, agrees. [22276025] |"I look at it as a ho-hum matter," he says. [22276026] |Many other factors played a part in yesterday's comeback. [22276027] |The Federal Reserve signaled its willingness to provide liquidity; the interest rate on its loans to major banks inched downward early in the day. [22276028] |Foreign stock markets, which kicked off Black Monday with a huge selling spree, began the day off by relatively modest amounts. [22276029] |The dollar, after falling sharply in overnight trading to 139.10 yen, bounced back strongly to 141.8, thus easing fears that foreigners would unload U.S. stocks. [22276030] |And the widely disseminated opinion among most market experts that a crash wasn't in store also helped calm investors. [22276031] |Many major institutions, for example, came into work yesterday ready to buy some of the blue chips they felt had been sharply undervalued on Friday. [22276032] |Still, amid all the backslapping and signs of relief over yesterday's events, some market professionals cautioned that there is nothing present in the current market system to prevent another dizzying drop such as Friday's. [22276033] |"There is too much complacency," says money manager Barry Schrager. [22276034] |Computers have increasingly connected securities markets world-wide, so that a buying or selling wave in one market is often passed around the globe. [22276035] |So investors everywhere nervously eyed yesterday's opening in Tokyo, where the Nikkei average of 225 blue-chip stocks got off to a rocky start. [22276036] |The average plunged some 600 points, or 1.7%, in the first 20 minutes of trading. [22276037] |But the selling wave had no conviction, and the market first surged upward by 200 points, then drifted lower, closing down 647. [22276038] |Unlike two years ago, most of Japan's major investors chose to sit this calamity out. [22276039] |In Merrill Lynch & Co.'s Tokyo trading room, some 40 traders and assistants sat quietly, with few orders to process. [22276040] |Clients "are all staying out" of the market, one Merrill trader says. [22276041] |The relative calm in Tokyo proved little comfort to markets opening up in Europe. [22276042] |Frankfurt's opening was delayed a half hour because of a crush of sell orders. [22276043] |"The beginning was chaotic," says Nigel Longley, a broker for Commerzbank [22276044] |In London, the view from the trading floor of an American securities firm, Jefferies & Co., also was troubling. [22276045] |A computer screen displaying 100 blue-chip stocks colors each one red when its price is falling. [22276046] |The screen was a sea of red. [22276047] |"I see concern, but I don't see panic," says J. Francis Palamara, a New Yorker who runs the 15-trader office. [22276048] |London's blue-chip stock index turned up just before 8 a.m. New York time, sending an encouraging message to Wall Street. [22276049] |When trading opened in New York at 9:30 a.m. EDT, stocks fell sharply -- as expected. [22276050] |Futures markets in Chicago had opened at a level suggesting the Dow would fall by about 60 points. [22276051] |With sell orders piled up from Friday, about half the stocks in the Dow couldn't open on time. [22276052] |By 9:45, the industrial average had dropped 27 points. [22276053] |By 10 a.m., it was down 49. [22276054] |Ten minutes later, the Dow hit bottom-down 63.52 points, another 2.5%. [22276055] |But shortly before then, some of Wall Street's sharpest traders say, they sensed a turn. [22276056] |"The first thing that caught my eye that was encouraging was Treasury bonds were off," says Austin George, head of stock trading at T. Rowe Price. [22276057] |"It meant that people weren't running pell-mell to the safety of bonds." [22276058] |Shortly after 10 a.m., the Major Market Index, a Chicago Board of Trade futures contract of 20 stocks designed to mimic the DJIA, exploded upward. [22276059] |Stock traders were buoyed -- because an upturn in the MMI had also started the recovery in stocks on the Tuesday following Black Monday. [22276060] |"The MMI has gone better," shouted a trader in the London office of Shearson Lehman Hutton. [22276061] |Shearson's London trading room went wild. [22276062] |Traders shouted out as their Reuters, Quotron and Telerate screens posted an ever-narrowing loss on Wall Street. [22276063] |Then, nine minutes later, Wall Street suddenly rebounded to a gain on the day. [22276064] |"Rally, rally, rally," shouted Shearson's Andy Rosen. [22276065] |"This is panic buying." [22276066] |Major blue-chip stocks like Philip Morris, General Motors and Proctor & Gamble led the rally. [22276067] |Japanese were said to be heavy buyers. [22276068] |German and Dutch investors reportedly loaded up on Kellogg Co. [22276069] |Then, traders say, corporations with share buy-back programs kicked into high gear, triggering gains in, among other issues, Alcan Aluminium and McDonald's. [22276070] |Walt Disney Co., which had one of the biggest sell-order imbalances on Friday and was one of seven stocks that halted trading and never reopened that day, opened yesterday late at 114.5, down 8.5. [22276071] |But then it suddenly burst upward 7.5 as Goldman, Sachs & Co. stepped in and bought almost every share offer, traders said. [22276072] |By 10:25, the Dow had turned up for the day, prompting cheers on trading desks and exchange floors. [22276073] |Among Big Board specialists, the cry was "Pull your offers" -- meaning that specialists soon expected to get higher prices for their shares. [22276074] |"It was bedlam on the upside," said one Big Board specialist. [22276075] |"What we had was a real, old-fashioned rally." [22276076] |This technical strength spurred buying from Wall Street's "black boxes," computer programs designed to trigger large stock purchases during bullish periods. [22276077] |Typical, perhaps, was Batterymarch's Dean LeBaron. [22276078] |Mr. LeBaron, who manages $10 billion, says, "We turned the trading system on, and it did whatever it was programmed to do." [22276079] |Asked what stocks the computer bought, the money manager says, "I don't know." [22276080] |Not everybody was making money. [22276081] |The carnage on the Chicago Board Options Exchange, the nation's major options market, was heavy after the trading in S&P 100 stock-index options was halted Friday. [22276082] |Many market makers in the S&P 100 index options contract had bullish positions Friday, and when the shutdown came they were frozen with huge losses. [22276083] |Over the weekend, clearing firms told the Chicago market makers to get out of their positions at any cost Monday morning. [22276084] |"They were absolutely killed, slaughtered," said one Chicago-based options trader. [22276085] |Meanwhile, a test of the stock market's rally came at about 2 p.m., with the Dow at 2600, up 31 points on the day. [22276086] |Charles Clough, a strategist at Merrill Lynch, says bargain hunting had explained the Dow's strength up to that point and that many market professionals were anticipating a drop in the Dow. [22276087] |Moreover, the announcement that real estate magnate and sometime raider Donald Trump was withdrawing his offer for AMR Corp. might have been expected to rattle traders. [22276088] |Instead, the rally only paused for about 25 minutes and then steamed forward as institutions resumed buying. [22276089] |The market closed minutes after reaching its high for the day of [22276090] |Across the country, many people took yesterday's events in stride, while remaining generally uneasy about the stock market in general. [22276091] |Says James Norman, the mayor of Ava, Mo.: "I don't invest in stocks. [22276092] |I much prefer money I can put my hands on." [22276093] |While Mayor Norman found the market's performance Monday reassuring, he says, he remains uneasy. [22276094] |"We have half the experts saying one thing and half the other" about the course of the economy. [22276095] |Ralph Holzfaster, a farmer and farm-supply store operator in Ogallala, Neb., says of the last few days events, "If anything good comes out of this, it might be that it puts some of these LBOs on the skids." [22276096] |Says Gordon Fines, a money manager at IDS Financial Services in Minneapolis, "You're on a roller coaster, and that may last. [22276097] |The public is still cautious. [22277001] |Skipper's Inc., Bellevue, Wash., said it signed a definitive merger agreement for a National Pizza Corp. unit to acquire the 90.6% of Skipper's Inc. it doesn't own for $11.50 a share, or about $28.1 million. [22277002] |NP Acquisition Co., a National Pizza unit, plans to begin a tender offer for Skipper's on Friday, conditioned on at least two-thirds of Skipper's shares being tendered. [22277003] |Pittsburg, Kan.-based National Pizza said the transaction will be financed under its revolving credit agreement. [22277004] |In national over-the-counter trading, Skipper's shares rose 50 cents to $11. [22277005] |Skipper's said the merger will help finance remodeling and future growth. [22277006] |Skipper's previously turned down a $10-a-share proposal from National Pizza and Pizza Hut Inc. questioned whether the purchase would violate National Pizza's franchise agreements. [22277007] |National Pizza said it settled its dispute with Pizza Hut, allowing it to make the purchase. [22277008] |Also, Skipper's results began to turn around, permitting a higher offer, National Pizza said. [22277009] |For the 12 weeks ended Sept. 3, Skipper's had net income of $361,000, or 13 cents a share, compared with a net loss a year earlier. [22277010] |Revenue was $19.9 million. [22278001] |EAST GERMANS RALLIED as officials reportedly sought Honecker's ouster. [22278002] |In what was considered the largest protest in the Communist state's 40-year history, at least 120,000 demonstrators marched through the southern city of Leipzig to press demands for democratic freedoms, opposition activists said. [22278003] |Police didn't intervene. [22278004] |Meanwhile, as the first of more than 1,300 East Germans trying to flee to the West through Poland renounced their citizenship, a West German newspaper reported that regional Communist officials demanded the dismissal of hard-line leader Honecker. [22278005] |Secretary of State Baker, in a foreign policy speech, called for the reunification of Germany, saying it was the "legitimate right" of the German people. [22278006] |Gorbachev blamed the Soviet Union's press for contributing to the nation's mounting problems. [22278007] |At a meeting Friday, the Kremlin leader complained about recent articles that raised the possiblity of civil unrest, and accused the media of fueling panic buying of goods by publishing stories about impending shortages. [22278008] |House-Senate conferees approved a permanent smoking ban on domestic airline routes within the continental U.S. and on flights of less than six hours to Alaska and Hawaii. [22278009] |The curbs would cover all but a small percentage of flights, and represent an expansion of the current ban on flights of less than two hours. [22278010] |E. Robert Wallach was sentenced by a U.S. judge in New York to six years in prison and fined $250,000 for his racketeering conviction in the Wedtech scandal. [22278011] |Wallach, an associate of ex-Attorney General Meese, was found guilty in August of taking $425,000 in illegal payoffs from the now-defunct defense contractor. [22278012] |NASA resumed the countdown for today's launch of the space shuttle Atlantis, and a federal appeals court in Washington dismissed a lawsuit by anti-nuclear groups to delay the flight because the plutonium-powered Galileo space probe was aboard. [22278013] |The space agency said it didn't expect weather or protesters to block the liftoff. [22278014] |The Bush administration is preparing to extend a ban on federal financing of research using fetal tissue, government sources said. [22278015] |A temporary prohibition was imposed in March 1988. [22278016] |While anti-abortion groups are opposed to such research, scientists have said transplanting such tissue could be effective in treating diabetes. [22278017] |Delegates from 91 nations endorsed a ban on world ivory trade in an attempt to rescue the endangered elephant from extinction. [22278018] |Five African nations, however, said they would continue selling the valuable tusks. [22278019] |Mubarak held reconciliation talks with Gadhafi at the Egyptian resort of Mersa Metruh. [22278020] |It was the Libyan leader's first trip to Egypt in 16 years. [22278021] |They announced a reduction in formalities for travel, but didn't show any real signs of resuming full diplomatic ties. [22278022] |The Egyptian president said he would visit Libya today to resume the talks. [22278023] |Seoul and Pyongyang reached a tentative agreement to allow visits between families on the divided Korean peninsula. [22278024] |Such family reunions would be the second since 1945. [22278025] |Differences remained between the North and South Korean governments, however, over conditions for the exchanges. [22278026] |Freed black nationalists resumed political activity in South Africa and vowed to fight against apartheid, raising fears of a possible white backlash. [22278027] |The nation's main white opposition party warned that the government's release Sunday of eight black political prisoners risked bringing chaos and eventual black Marxist rule to the nation. [22278028] |The White House said Bush is "fully satisfied" with CIA Director Webster and the intelligence agency's performance during the Oct. 3 failed coup in Panama. [22278029] |The Washington Post reported that unidentified senior administration officials were frustrated with Webster's low-profile activities during the insurrection and wanted him replaced. [22278030] |Poland's legislature approved limits on automatic wage increases without special provisions for food price rises. [22278031] |The vote was considered a test of the Solidarity-led government's resolve to proceed with a harsh economic-restructuring program. [22278032] |Norway's King Olav V installed a three-party non-Socialist government as Gro Harlem Brundtland's three-year-old Labor regime relinquished power. [22278033] |The 19-member cabinet is led by Prime Minister Jan Syse, who acknowledged a "difficult situation" since the coalition controls only 62 seats in Oslo's 165-member legislature. [22278034] |El Salvador's government opened a new round of talks with the country's leftist rebels in an effort to end a decade-long civil war. [22278035] |A spokesman said the guerrillas would present a cease-fire proposal during the negotiations in Costa Rica that includes constitutional and economic changes. [22278036] |The State Department said there was a "possibility" that some Nicaraguan rebels were selling their U.S.-supplied arms to Salvadoran guerrillas, but insisted it wasn't an organized effort. [22278037] |Separately, Secretary of State Baker complained about a U.N. aide who last week told the Contras to disband as part of a regional peace accord. [22278038] |Died: Cornel Wilde, 74, actor and director, in Los Angeles, of leukemia. . . . [22278039] |Danilo Kis, 54, Yugoslav-born novelist and essayist, Sunday, in Paris, of cancer. [22279001] |British retail sales volume rose a provisional 0.4% in September from August and was up 2.2% from September 1988, the Department of Trade and Industry said. [22279002] |For the three months ended in September, retail sales volume was down 0.5% from the previous three months and up 1.2% from a year earlier. [22280001] |Chicago investor William Farley agreed to sell three divisions of Cluett Peabody & Co. for about $600 million to Bidermann S.A., a closely held clothing maker based in Paris. [22280002] |Shortly after completing the $1.56 billion acquisition of West Point-Pepperell Inc. in April, Mr. Farley's holding company, Farley Inc., said it was considering the sale of Cluett, a leading shirt maker and one of West Point-Pepperell's biggest units. [22280003] |Included in the sale are Cluett units that make men's shirts under the Arrow name, socks under the Gold Toe name and menswear through the Schoeneman division. [22280004] |The companies said the agreement is subject to Bidermann's receipt of financing and to regulatory and other approvals. [22280005] |They said the sale is expected to be concluded by the end of November. [22280006] |Mr. Farley said the sale of three of Cluett's four main divisions plus other "anticipated" West Point-Pepperell asset sales by December, should bring in a total of about $700 million. [22280007] |He didn't elaborate on other asset sales being considered. [22280008] |Mr. Farley followed a similar pattern when he acquired Northwest Industries Inc. and then sold much of its assets. [22280009] |But he kept Fruit of the Loom Inc., the underwear maker that he still controls and serves as chairman and chief executive. [22280010] |Cluett was an independent company until West Point-Pepperell acquired it for $375 million in cash and stock in 1986. [22280011] |In the fiscal year ended Sept. 30, 1988, Cluett had operating profit of $37 million on sales of $757 million. [22280012] |Bidermann sells clothes under various labels, including Yves Saint Laurent and Bill Robinson for men and Ralph Lauren for women. [22280013] |A spokesman said the company had sales of $400 million in 1988. [22280014] |In New York Stock Exchange composite trading, West Point-Pepperell fell 25 cents to $53.875. [22281001] |Britain's Blue Arrow PLC intends to change its name to Manpower PLC and write off a chunk of the nearly $1.2 billion in good will realized in the takeover of U.S.-based Manpower Inc. [22281002] |Blue Arrow Chairman Mitchell Fromstein said in an interview that the two steps may be a prelude to reincorporating the world's biggest employment-services group in the U.S. [22281003] |Mr. Fromstein disclosed the planned steps, expected within a few months, as Blue Arrow posted a 2.5% drop in its third-quarter pretax earnings. [22281004] |The name change and good will write-off could help solidify Blue Arrow's dominance of the U.S. temporary-help market and give it a more American image as U.S. investors turn jittery about foreign stocks after Friday's market plunge. [22281005] |U.S. holders now own more than 60% of Blue Arrow compared with 9% last January. [22281006] |"In the U.S. market, the recognition of the Manpower name is infinitely stronger than Blue Arrow," Mr. Fromstein said. [22281007] |The moves also could erase shareholders' perception of Blue Arrow as a company in turmoil. [22281008] |"It further reinforces the concept that Blue Arrow is a thing of the past," said Doug Arthur, an analyst at Kidder Peabody & Co. in New York. [22281009] |The proposed changes "all make a lot of sense to me," he added. [22281010] |In a widely publicized boardroom coup, Mr. Fromstein ousted Antony Berry as Blue Arrow chief executive in January, a month after Mr. Berry had forced Mr. Fromstein out as the $1 million-a-year chief of Milwaukee-based Manpower. [22281011] |Mr. Fromstein solidified his control in April by taking over from Mr. Berry as chairman. [22281012] |But the Blue Arrow tumult isn't over yet, as the British government is investigating a disputed #25 million ($39.4 million) loan which Mr. Fromstein has said was made under Mr. Berry's direction. [22281013] |Blue Arrow was able to pull off the $1.34 billion takeover of Manpower in 1987 largely because different British and American accounting standards produce higher reported earnings for British companies. [22281014] |Under British rules, Blue Arrow was able to write off at once the $1.15 billion in good will arising from the purchase. [22281015] |As a U.S.-based company, Blue Arrow would have to amortize the good will over as many as 40 years, creating a continuing drag on reported earnings. [22281016] |Good will is the excess of cost of an acquired firm, operating unit or assets over the current or fair market value of those assets. [22281017] |But with so many shares now held in the U.S., Blue Arrow reports its earnings two ways, based on both U.K. and U.S. accounting standards. [22281018] |"Our balance sheets look like they came from Alice's wonderland," Mr. Fromstein said. [22281019] |The British version shows "a handful of pounds of net worth" following the 1987 write-off of good will, while the American version reflects "$1 billion of net worth because almost none of {the good will} has been written off." [22281020] |Mr. Fromstein said he hopes to eradicate some of the good will left on Blue Arrow's U.S. books in one fell swoop, but wouldn't specify how much. [22281021] |People close to Blue Arrow suggested the write-down would represent a sizable chunk, with executives claiming prior management overstated the extent of Manpower's good will. [22281022] |That move, along with the return to the Manpower name, could bolster the company's prospects during possibly difficult times for temporary help. [22281023] |The number of U.S. temporary workers fell about 1% in the 12 months ending Aug. 31, after sliding nearly 3.5% in July, said Kidder Peabody's Mr. Arthur. [22281024] |Blue Arrow blamed the pretax profit drop in the quarter ended July 31 partly on slower earnings growth of non-Manpower units in Britain. [22281025] |Overall, pretax profit slid to #18.49 million in the quarter from #18.98 million a year earlier. [22282001] |Richard G. Sim, the man credited with transforming Applied Power Inc. from an underachiever into a feisty player in the global market for hydraulic tools, hopes to guide a similar turnaround at the company's latest acquisition, Barry Wright Corp. [22282002] |The 45-year-old former General Electric Co. executive figures it will be easier this time. [22282003] |But analysts, while applauding the acquisition, say Applied's chief executive faces a tough challenge in integrating the two companies. [22282004] |Barry Wright, acquired by Applied for $147 million, makes computer-room equipment and vibration-control systems. [22282005] |The Watertown, Mass., company's sales have been dormant and its profits have dropped. [22282006] |Last year's earnings of $1.3 million, including $815,000 from a restructuring gain, were far below the year-earlier $8.4 million. [22282007] |Besides spurring Barry Wright's sales, which were $201.7 million in 1988, Mr. Sim must pare its costs and product line. [22282008] |"The question is how long it's going to take Barry Wright to make a contribution," says F. John Mirek, an analyst at Blunt Ellis Loewi in Milwaukee. [22282009] |The answer will help determine whether Applied continues to reach the ambitious goals set by Mr. Sim. [22282010] |The Butler, Wis., manufacturer went public at $15.75 a share in August 1987, and Mr. Sim's goal then was a $29 per-share price by 1992. [22282011] |Strong earnings growth helped achieve that price far ahead of schedule, in August 1988. [22282012] |The stock has since softened, trading around $25 a share last week and closing yesterday at $23.00 in national over-the-counter trading. [22282013] |But Mr. Sim has set a fresh target of $50 a share by the end of [22282014] |Reaching that goal, says Robert T. Foote, Applied's chief financial officer, will require "efficient reinvestment" of cash by Applied and continuation of its healthy 19% rate of return on operating capital. [22282015] |In Barry Wright, Mr. Sim sees a situation "very similar" to the one he faced when he joined Applied as president and chief operating officer in 1985. [22282016] |Applied, then a closely held company, was stagnating under the management of its controlling family. [22282017] |While profitable, it "wasn't growing and wasn't providing a satisfactory return on invested capital," he says. [22282018] |Mr. Sim is confident that the drive to dominate certain niche markets will work at Barry Wright as it has at Applied. [22282019] |He also professes an "evangelical" fervor to develop a corporate culture that rewards managers who produce and where decision-making is shared. [22282020] |Mr. Sim considers the new unit's operations "fundamentally sound" and adds that Barry Wright has been fairly successful in moving into markets that haven't interested larger competitors. [22282021] |"With a little patience, these businesses will perform very satisfactorily," Mr. Sim says. [22282022] |Within about six months, "things will be moving in the right direction," he predicts. [22282023] |Mr. Sim figures it will be easier to turn Barry Wright around since he's now in the driver's seat. [22282024] |When he came to Applied, "I didn't have the power to execute as I do today," he says. [22282025] |He was named chief executive officer of Applied in 1986 and became chairman last November. [22282026] |At Applied, Mr. Sim set growth as his first objective. [22282027] |He took the company public in an offering that netted Applied about $12.6 million, which helped launch the company's acquisition program. [22282028] |Sales climbed to an estimated $245 million in fiscal 1989, ended Aug. 31, from $99.9 million in fiscal 1985. [22282029] |The company expects that earnings, which have marched steadily upward in recent years, reached about $20.8 million, or $1.58 a share, in the fiscal year just ended, up from $15.2 million in fiscal 1988 and $3.9 million in 1985.