News stories from Thursday December 22, 1977

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

A $126 billion defense budget was approved by President Carter for the fiscal year 1979. The figure is about $4 billion lower than Defense Secretary Harold Brown had sought, and the military is distressed about it. The Office of Management and Budget set the lower figure. Administration and Pentagon officials said that the budget would mean cutbacks in various Army, Navy and Air Force programs. [New York Times] An explosion shattered a grain elevator complex of 73 silos near New Orleans, killing at least 10 persons. More than 17 were missing. Most of the people who died were in a one-story control building and lunchroom when a weighing station above the tops of the silos fell 250 feet to the roof below. The Continental Grain Company owns the plant. [New York Times] Mysterious blasts along the Eastern Seaboard are puzzling scientists who seem to agree that the blasts are strong and atmospheric, originating tens of miles off shore. The latest blasts were heard this morning off the Carolinas and Wednesday night off the New Jersey coast. Military and federal aviation officials do not support the sonic boom theory. [New York Times] Banks have more influence in Congress and the government than any other regulated industry in the nation, according to many members of the House and Senate, congressional staff members and Washington lobbyists. "The bank lobby can almost certainly stop anything it does not want in Congress," said a lobbyist for one of the country's largest banks. This might be why banking can to an unusual degree set the terms of its own regulation and remain clear of effective independent review, and why Congress has failed to pass a single bill aimed at improving the overall regulation of the banking industry. [New York Times] United States Steel raised the prices of most of its products by 5.5 percent, in line with the increase announced by other major producers this week. Shortly after the company made the announcement, the National Steel Corporation said it was also increasing prices by 5.5 percent. The 5.5 percent "is not at all disturbing if it represents the major increases for the year [1978]," said the director of the Council on Wage and Price Stability. [New York Times] The stock market rallied with the news of a sharp improvement in the American dollar's value in foreign exchange markets. The Dow Jones industrial average rose 7.88 points to 821.81. Its gain totaled 15½ points in the last two sessions. The total trading volume on the New York Stock Exchange amounted to 28.1 million shares, the biggest turnover since Nov. 23, when 29.15 million shares of stock were traded. [New York Times] Egyptian officials said they were assured that Prime Minister Menachem Begin of Israel would take a substantially more forthcoming position on the crucial Palestine issue at his meeting on Christmas with President Anwar Sadat than he did publicly in Washington and New York. The officials said the assurances came from the Carter administration and Israel's Minister of Defense Ezer Weizman, who has been meeting with President Sadat in Ismailia. The Egyptians were said to desperately want to believe that Israel was ready to make a basic concession regarding self-determination for the Palestinians. [New York Times] The Israeli cabinet, meanwhile, unanimously endorsed the peace plan that Prime Minister Begin will take to Ismailia for his meeting with President Sadat, Mr. Begin made the endorsement known after a seven-and-a-half-hour meeting with his cabinet, the longest they have had since he became Prime Minister. The length of the meeting and criticism among some Israelis over Mr. Begin's secrecy about his peace proposals set off rumors of dissension in the government, but the Prime Minister brushed them aside, saying that the meeting "was one of the best and on the highest level I have ever participated in." [New York Times] The Sudan's long-standing request for planes will be met by the United States in a move that has important policy implications. Administration officials said the Sudan was informed that the United States was now willing to sell it a squadron of 12 F-5 fighter planes. This will be the first time that Sudan has been provided with American combat aircraft. Sudan, an ally of Egypt and Saudi Arabia, is involved In both the Middle East and black Africa. It expelled all its Soviet military advisers last May. [New York Times] Withdrawal of all Palestinians from Lebanon was demanded by Dory Chamoun, the head of the right-wing National Liberal Party, saying that it was essential if the country was to reach a national reconciliation. "I believe that as long as there is one Palestinian in Lebanon he will be used as an instrument to intervene in our internal affairs,'' Mr. Chamoun said. He is the son of former President Camille Chamoun, leader of a rightist coalition that fought Palestinian-Moslem forces in the civil war. The son is generally said to speak for his father. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 821.81 (+7.88, +0.97%)
S&P Composite: 93.80 (+0.75, +0.81%)
Arms Index: 0.47

	Issues	Volume*
Advances	939	18.39
Declines	577	5.28
Unchanged	441	4.43
Total Volume		28.10

* 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*
December 21, 1977	813.93	93.05	24.51
December 20, 1977	806.22	92.50	23.25
December 19, 1977	807.95	92.69	21.15
December 16, 1977	815.32	93.40	20.27
December 15, 1977	817.83	93.55	21.61
December 14, 1977	822.68	94.03	22.11
December 13, 1977	815.23	93.56	19.19
December 12, 1977	815.75	93.63	18.16
December 9, 1977	815.23	93.65	19.21
December 8, 1977	806.91	92.96	20.40