News stories from Friday May 27, 1977

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

A reduction of $2.7 billion in President Carter's proposed defense budget was recommended by the House Defense Appropriations subcommittee. The amount represents a long series of small reductions. The recommendation made no provision for the elimination of a major weapons system that the President had proposed. The subcommittee also proposed eliminating the practice of "double-dipping" in which military retirees draw pensions while holding another government job. [New York Times] Gen. John Singlaub, removed from his post in South Korea for challenging President Carter's proposal to withdraw troops there, was appointed chief of staff of the Army's largest command, which is at Fort McPherson in Atlanta. He will have a job "of equivalent responsibility and stature," according to an Army spokesman who said, "this is a lateral move." [New York Times] The country may be "overrun by hordes of lawyers hungry as locusts," Chief Justice Warren Burger said, unless new ways are found to settle disputes. "People with problems, like people with pains, want relief and they want it as quickly and as inexpensively as possible," the Chief Justice said. The remarks were made at a conference at the Columbia Law School in New York on the resolution of minor disputes. [New York Times] Citibank's prime rate was raised a quarter of a point to 6¾ percent, the second such increase this month. By early evening most of the country's other big banks did the same. Citibank's increase had been expected because its base rate is linked to interest rates in the commercial paper market, a competitive source for corporate loans, and those rates have been moving up. [New York Times] Wall Street remained calm as the Dow Jones industrial average dipped below 900, considered a psychological barrier by many investors. The average declined 9.24 points to 898.83, its lowest level since January 1976. Analysts noted that the Dow, established in 1896, is at present a misleading barometer of the stock market as a whole. "To tell you the truth," a broker said, "my customers are sort of bored by the stock market and many of them expected the Dow to fall below 900 sooner or later." [New York Times] The economy may continue to grow strongly, but at a somewhat slower pace than in the first quarter, the government indicated. The Commerce Department's composite index of leading indicators rose by only 0.5 percent in April compared with 1.5 percent in March. Economists differed in their interpretations of the latest figures. [New York Times] General Motors has decided in principle to discontinue allowing its five automobile divisions to put their names on automobile engines, knowledgeable persons within the company said. G.M. thus hopes to put an end to charges of engine switching which have incurred law suits by buyers who found a Chevrolet engine in their Oldsmobile. The plan, if adopted, would start with G.M.'s 1978 models, it was said. [New York Times] "There is no finer ship in the world," President Carter said after he took a trip in the nuclear submarine Los Angeles off Cape Canaveral, Fla. The President was accompanied by his wife and Adm. Hyman Rickover, who was his commanding officer in the Navy. The submarine descended 100 fathoms into the sea. The President briefly took the helm during the three-hour maneuvers. [New York Times] An alleged monopoly in the sale of eyeglasses that may be costing consumers as much as $400 million in excessive prices is being investigated by a Senate committee, the Federal Trade Commission and the Justice Department. Hearings held by the Senate Select Committee on Small Business found that the prices federal agencies pay for glasses are only a fraction of what ordinary customers pay. [New York Times] Psychiatrists continued to negotiate with South Moluccan extremists in the Netherlands who freed 105 schoolchildren and a teacher they had been holding captive with other hostages in the Assen area. The extremists were still holding four teachers in addition to 56 people on a train they stopped Monday in Zuidlaren, 15 miles north of Assen. More than 500 Dutch troops have surrounded the train. [New York Times] Prime Minister Pierre Trudeau of Canada and his wife, Margaret, jointly announced that they had separated and that Mr. Trudeau would have custody of their three sons. They have been married six years. The statement said that Mrs. Trudeau "wishes to leave the marriage and pursue an independent career." [New York Times]

Stock Market Report

Dow Jones Industrial Average: 898.83 (-9.24, -1.02%)
S&P Composite: 96.27 (-0.74, -0.76%)
Arms Index: 1.44

	Issues	Volume*
Advances	503	3.81
Declines	862	9.37
Unchanged	509	2.55
Total Volume		15.73

* 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*
May 26, 1977	908.07	97.01	18.62
May 25, 1977	903.24	96.77	20.71
May 24, 1977	912.40	97.67	20.05
May 23, 1977	917.06	98.15	18.29
May 20, 1977	930.46	99.45	18.95
May 19, 1977	936.48	99.88	21.28
May 18, 1977	941.91	100.30	27.80
May 17, 1977	936.48	99.77	22.29
May 16, 1977	932.50	99.47	21.17
May 13, 1977	928.34	99.03	19.78