News stories from Tuesday April 4, 1978

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

A decision not to produce the neutron bomb is being reviewed by President Carter, the administration indicated, amid mounting controversy over American plans for the project. Several administration officials confirmed privately a report that, before leaving on his visit to Latin America and Africa, Mr. Carter had scrapped an Atlantic alliance plan for proceeding with the bomb. Few government specialists, including those who strongly support achieving a new arms limitation accord with Moscow, believe that a decision to cancel production would result in new concessions by the Russians.Washington's description of neutron weapons changed significantly in discussions with West Germany in the last few weeks, according to political sources in Bonn. The United States no longer referred to them as "the decisive element" in the East-West balance of power. The Bonn government seemed less than completely surprised by the report that President Carter had decided against production of the weapons, but the apparent suddenness of the decision caused concern. [New York Times] The kidnappers of Aldo Moro distributed copies of a letter in the former Prime Minister's handwriting appealing to Italian leaders to exchange him for other "political" prisoners. In another message, the terrorists demanded the release of "all Communist prisoners" in Italian jails and threatened to accelerate their anti-government campaign. Meanwhile, Prime Minister Giulio Andreotti said the government refused to submit to "blackmail" to gain Mr. Moro's release. [New York Times] A slightly higher inflation rate and a slightly lower rate of economic expansion than those predicted by the Carter administration were forecast by G. William Miller, the Federal Reserve Board chairman. In a letter to Capitol Hill, the new Fed chairman said inflation would be between 6.5 and 7 percent and growth between 4 and 4.75 percent. In January, the President had predicted inflation at 6.3 percent and growth at 4.7 percent. [New York Times] Annual tuition will exceed $5,000 next fall for the first time at some of the nation's most prestigious colleges and universities, and total costs, including room and board, will be more than $8,000, a survey showed. The College Entrance Examination Board, which surveyed 2,693 institutions, said that the cost of an education at a four-year college would rise 6 percent in the next academic year. At the colleges surveyed, total costs will average $3,054 at public institutions and $5,110 at private ones. [New York Times] Stock prices rose amid an improved showing by the dollar in foreign currency trading. The Dow Jones industrial average rose 4.33 points to 755.37, and advances on the Big Board outpaced losers by 8 to 5. [New York Times] Increased grain and cotton price supports under a flexible farm subsidy plan that could cost taxpayers at least $2.1 billion this year were approved by a Senate-House conference, despite the threat of a presidential veto. If enough farmers take advantage of the plan, an Agriculture Department official warned, consumer food prices could rise an additional $2 billion to $3 billion, or up to 3 percent by 1979 over the 6 to 8 percent increase already forecast. [New York Times] Lockheed's recovery gained impetus with an announcement that Pan American World Airways had decided to buy a $500 million fleet of 12 of the manufacturer's L-1011 jumbo jet airliners. The decision was the biggest stimulus for the TriStar program since the abrupt 1971 setbacks that nearly plunged Lockheed into bankruptcy. A major rise in plane purchases by airlines around the world is expected by experts to total between $60 billion and $75 billion by 1990. [New York Times] American Jews are uneasy, confused, distressed or even angry about the Middle East policies of the American and Israeli governments. There is a new, unsettled climate of opinion and emotion among United States Jews and, to some extent, their leaders. Contributing factors are the Carter administration's Middle East position, which is markedly different from that of previous administrations; the election of Menachem Begin as Israel's Prime Minister, and the peace initiative by Egypt's President Anwar Sadat. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 755.37 (+4.33, +0.58%)
S&P Composite: 88.86 (+0.40, +0.45%)
Arms Index: 0.71

	Issues	Volume*
Advances	841	11.48
Declines	506	4.89
Unchanged	501	3.76
Total Volume		20.13

* 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*
April 3, 1978	751.04	88.46	20.23
March 31, 1978	757.36	89.21	20.13
March 30, 1978	759.62	89.41	20.46
March 29, 1978	761.78	89.64	25.45
March 28, 1978	758.84	89.50	21.60
March 27, 1978	753.21	88.87	18.87
March 23, 1978	756.50	89.36	21.29
March 22, 1978	757.54	89.47	21.95
March 21, 1978	762.82	89.79	24.41
March 20, 1978	773.82	90.82	28.36