News stories from Monday August 29, 1977

Summaries of the stories the major media outlets considered to be of particular importance on this date:

The Federal Reserve Board, as it was expected to, increased its discount rate charged on loans to commercial banks to 5¾ percent from 5¼ percent, hoping "to reduce the incentive" of member banks to borrow from the federal bank. The borrowing, the Federal Reserve said, "has increased rapidly in recent weeks." The rate increase applies to five of the 12 Federal Reserve districts. [New York Times] European exchange markets were in turmoil following the announcement of the devaluation of the currencies of Sweden, Norway and Denmark. Denmark and Norway complained that they had been forced to participate against their will. Finland's decision to devalue is expected tomorrow. The value of the Swedish krona was cut by 10 percent, and the government cut the krona's links with the West German mark and other currencies locked together in the so-called European currency "snake." [New York Times] A rally in blue-chip issues led a broad advance in the stock market, giving strength to the Dow Jones industrial average, which closed up 8.67 points to 864.09. Analysts, taking a clinical view, said the rally was technical, following sharp recent declines, and noted that many investors stayed away, awaiting the Commerce Department's July report on the composite index of leading economic indicators; that index declined in the preceding two months. [New York Times] Taking steps to cut down mounting surpluses, the administration will ask Congress to authorize a 20 percent reduction in his country's wheat acreage. The Agriculture Department gave a briefing at the White House of the administration's proposed farm policy, which has major domestic and foreign policy implications. [New York Times] Major black leaders met in New York City to discuss what they believe is a worsening racial situation in this country. They agreed "to launch a counterattack on the callous neglect of blacks, the poor and America's cities." [New York Times] Leading New York advertising agencies have expressed concern about the effectiveness of pressure groups in preventing companies from advertising on television programs. This pressure has been responsible for the loss of advertising support for ABC-TV's controversial new comedy "Soap," which is said to rely heavily on sexual themes. The program, scheduled to have its premiere on Sept. 13, has not yet been seen by most of the groups protesting its showing. [New York Times] The Chinese are quite unhappy, according to Li Hsein-nien, a member of the standing committee of the Politburo, at President Carter's reluctance to give up "his friend" Taiwan. In a Peking interview, Mr. Li suggested that he thought the American people did not support this view of the Taiwan question. [New York Times] Ethnic violence has eased in Sri Lanka after 10 days that have seen 100 people killed, mostly members of the Tamil minority, and thousands driven from their homes vowing never to return. The government has been evacuating Tamils, to escape attacks by marauding members of the country's Sinhalese majority, to the northern coast where there are more Tamils but fewer jobs. Many see the evacuation as a move toward polarization. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 864.09 (+8.67, +1.01%)
S&P Composite: 96.92 (+0.83, +0.86%)
Arms Index: 0.65

	Issues	Volume*
Advances	1,011	10.43
Declines	389	2.62
Unchanged	467	2.23
Total Volume		15.28

* in millions of shares

Arms Index is the ratio of volume per declining issue to volume per advancing issue; a figure below 1.0 is bullish.

Market Index Trends
Date	DJIA	S&P	Volume*
August 26, 1977	855.42	96.09	18.48
August 25, 1977	854.12	96.15	19.40
August 24, 1977	862.87	97.23	18.17
August 23, 1977	865.56	97.62	20.29
August 22, 1977	867.29	97.79	17.87
August 19, 1977	863.48	97.51	20.80
August 18, 1977	864.26	97.68	21.04
August 17, 1977	864.59	97.74	20.92
August 16, 1977	869.28	97.73	19.34
August 15, 1977	874.13	98.18	15.75