News stories from Wednesday July 27, 1977

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

Changes in the welfare revision plan to make it politically more palatable have been recommended to President Carter by his Secretary of Health, Education and Welfare, Joseph Califano, even though they would exceed the present welfare cost level that the President would preserve. As clamor over welfare mounts, the Secretary is submitting revisions, including the one demanded by Mayor Beame of New York and other mayors for some fiscal relief to local government. [New York Times] The House voted 317-102 to eliminate from the food stamp program the requirement that recipients purchase a portion of their stamps. The Senate had already approved the change, which the Carter administration supports. A new urban-rural coalition that earlier helped farmers win higher price supports worked smoothly to produce major revisions. [New York Times] A record foreign trade deficit of $2.82 billion in June, marked by soaring oil imports, again weakened the dollar and added to Wall Street gloom. Economists said it reflected strong economic activity increasing the appetite for imports, while weaker growth of America's trading partners limited export demand. The British government ended its policy of holding the pound close to a fixed dollar exchange level and it rose nearly 1¾ cents. [New York Times] Stock prices suffered their biggest single-day drop in more than two years, with Bethlehem Steel's surprise halving of its quarterly dividend the straw that broke the back of the market. The Dow Jones industrial average plunged in the selling wave by 19.75 points to close at 888.43. [New York Times] General Motors earnings set an all-time record for the company for any quarter of $1.09 billion, 19.9 percent above last year's second-quarter profit. Sales were another record, 14.8 billion, an 18.4 percent increase over the corresponding quarter. [New York Times] An explosive brush fire in Santa Barbara devastated large portions of one of the nation's most scenic residential communities, destroying a total of 185 expensive homes. After threatening the downtown section of the California city for several hours, the wind shifted, diverting the flames when they were less than half a mile away. [New York Times] Sudan has been told that the United States is ready to contribute to its legitimate defense needs. This follows the decision to sell military supplies to Somalia and the request to Congress to approve sales to Egypt. A State Department official said similar requests from Chad would get sympathetic consideration. The Carter administration, an official explained, has decided to challenge Soviet inroads in a strategically important area and also to demonstrate strong support for President Anwar Sadat of Egypt, who along with Saudi Arabia's Crown Prince Fahd has repeatedly urged such involvement. [New York Times] Israel's Prime Minister rejected the American contention that Israeli settlement in occupied Arab areas violated international law. Speaking in Parliament in Jerusalem, Menachem Begin also attacked America's decision to sell 41 Hercules transport planes to Egypt, contending that any supply of arms to the Arab countries was an obstacle to peace. Parliament backed him, 59 to 36 with 31 abstentions. [New York Times] Japan was assured by Defense Secretary Harold Brown, stopping off in Tokyo after his mission to Korea, that the Carter administration intends to maintain strong military forces in Asia and play an active role in the area. Diplomatic sources said that Prime Minister Takeo Fukuda had grave doubts about the gradual pullout from Korea as potentially upsetting the military balance in northeastern Asia, where the size of the Soviet fleet is causing concern. [New York Times] Prince Saud al-Faisal lost his bid to buy an 18-room cooperative apartment in a luxury building at 640 Park Avenue in Manhattan. The rebuff to Saudi Arabia's Foreign Minister, a possible heir to the throne, was voted at a shareholders' meeting by a clear majority, one tenant reported, despite some heated arguing in his favor. The tenant said some feared the possibility of large, noisy parties and political violence if the Prince moved in. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 888.43 (-19.75, -2.17%)
S&P Composite: 98.64 (-1.63, -1.63%)
Arms Index: 2.10

	Issues	Volume*
Advances	262	2.07
Declines	1,327	22.03
Unchanged	320	2.34
Total Volume		26.44

* 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*
July 26, 1977	908.18	100.27	21.39
July 25, 1977	914.24	100.85	20.43
July 22, 1977	923.42	101.59	23.11
July 21, 1977	921.78	101.59	26.88
July 20, 1977	920.48	101.73	29.38
July 19, 1977	919.27	101.79	31.94
July 18, 1977	910.60	100.95	26.89
July 15, 1977	905.95	100.18	29.12
July 13, 1977	902.99	99.59	23.16
July 12, 1977	903.41	99.45	22.47