News stories from Wednesday October 26, 1977

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

The House killed a provision in the Social Security financing bill that would have made coverage mandatory in 1982 for all federal civilian employees and employees who do not take part voluntarily. The change improved prospects for passage of the bill. [New York Times] Arthur Burns implicitly rebuked the Carter administration when he defended the Federal Reserve policy of encouraging higher interest rates to check "what would otherwise have been an explosion of the money supply." Speaking in Spokane, the Fed chairman replied for the first time to the White House warning last week that tight money was a danger to the country's economic growth. [New York Times] South Korea's refusal to aid the House of Representatives' investigations of alleged Korean influence buying has effectively killed President Carter's request to transfer weapons worth $800 million to that country, the chairman of the House International Relations Committee said. Clement Zablocki, Democrat of Wisconsin, said the House would not even consider the request in these circumstances. [New York Times] Alleged Massachusetts kickbacks on federal education grants have brought state indictments of officials and educators and a federal investigation indicating a scheme with national ramifications. The Department of Health, Education and Welfare is sifting a wide range of contracts given to educators from outside the state. [New York Times] Bethlehem Steel lost $477 million in the third quarter, the largest loss ever recorded in a single quarter by any American company. Its chairman said by far the largest part of the net loss came from the closing of plants and layoff of workers in Johnstown, Pa., and Lackawanna, N.Y., leaving the company "stronger and leaner." [New York Times] Stock prices staged a strong, broad-based rally. The Dow Jones Industrial average, which had closed Tuesday at a two-year low and then sank at noon to 798 points, boomed ahead in the afternoon to a final 813.41 -- a gain for the day of 11.87 points. Analysts pointed to the triggering of some stock-buying programs when the average touched 800, as well as the automatic rebound effect known as a technical rally following sustained losses. [New York Times] Success in vaccinating children to resist the pneumococci bacteria, a major cause of pneumonia, meningitis and ear infections that can lead to permanent hearing loss, was reported by medical scientists at the University of California at San Francisco. Most of the 77 children vaccinated in the test were sufferers of sickle cell anemia, a blood disorder that means a higher risk of pneumococcal infection. [New York Times] South Africa's arms industry can surmount an international embargo and put up a fight that will astonish anyone seeking to end white rule, Defense Minister P. W. Botha said in a defiant interview. With bitter references to President Carter, he said the American decision to support a mandatory arms embargo in the United Nations Security Council would not weaken the overall fighting capacity of South African forces. [New York Times] American Jewish leaders, invited to hear Secretary of State Cyrus Vance explain the Carter administration's Middle East policy, vented their anger at what they perceived as an anti-Israel drift. Rabbi Alexander Schindler, their spokesman, said after the off-the-record meeting that Mr. Vance had asked for and received frank and open statements. Rabbi Schindler said the group expressed the concern, frustration and anger of the grass roots as well as of the leaders of major Jewish organizations. [New York Times] New Soviet leaders will emerge in the course of an imminent "wholesale generational turnover," and the United States should encourage them to enter into constructive relations, according to the Carter administration's leading Soviet specialist. Marshall Shulman gave a comprehensive review of policy toward the Soviet Union before a House subcommittee. He recommended "prompt and measured steps" to improve economic relations, to indicate that this option was open in case they should tend to move toward Western-style modernization. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 813.41 (+11.87, +1.48%)
S&P Composite: 92.10 (+1.10, +1.21%)
Arms Index: 0.71

	Issues	Volume*
Advances	1,006	16.24
Declines	454	5.20
Unchanged	419	3.42
Total Volume		24.86

* 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*
October 25, 1977	801.54	91.00	23.59
October 24, 1977	802.32	91.63	19.21
October 21, 1977	808.30	92.32	20.23
October 20, 1977	814.80	92.67	20.52
October 19, 1977	812.20	92.38	22.03
October 18, 1977	820.51	93.46	20.13
October 17, 1977	820.34	93.47	17.34
October 14, 1977	821.64	93.56	20.41
October 13, 1977	818.17	93.46	23.87
October 12, 1977	823.98	94.04	22.44