News stories from Monday January 19, 1976

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

In his State of the Union message, President Ford asked Congress to reduce federal taxes and curb government spending, to increase the earnings base of Social Security, to spur private industry in providing new jobs, and to give states and localities more leeway in the use of federal funds for education, health and social services. Mr. Ford also asked Congress to give him more flexibility in the conduct of diplomacy, rather than less, and to resist the temptation to legislate "crippling" and dangerous shackles on the intelligence community. [New York Times] The only one of a number of major tax recommendations made by President Ford in his State of the Union message that had not been leaked earlier would be a new kind of tax benefit that, it is hoped, would encourage more people to invest in common stocks. The tax incentive -- the deferment of taxes under certain circumstances for some of the money invested -- for stock ownership would not be available to the wealthy. The Treasury Department reportedly has proposed that no one with an income of more than $40,000 would be eligible. [New York Times] Mayor Frank Rizzo of Philadelphia, who had been a policeman there, apparently has become the city's most powerful Democratic politician. He has rejected the local Democratic organization, which gave him his start in politics, and has established his own political group, called the Loyal Democratic Campaign Committee. His break with the local machine followed a bitter fight with Peter Camiel, chairman of the Democratic City Committee, in which Mr. Camiel seems to have been vanquished, at least locally. The Rizzo group plans to endorse a presidential candidate in the Pennsylvania primary on April 27. [New York Times] An increase in the American Telephone and Telegraph Company's long-distance rates by $225 million a year has been approved by the Federal Communications Commission. The amount was sufficient to raise A.T.&T.'s rate of return on investment to 9.5 percent from 8.74 percent. [New York Times] Further use of Red No. 2, a petroleum derivative, as a dye in food, drugs and cosmetics has been banned by the Food and Drug Administration because of new concern that it is a cancer-causing agent. The ban will not require the recall of products already on the market. [New York Times] Prime Minister Rashid Karami of Lebanon, whose latest attempt at a cease-fire in the factional fighting between Moslems and Christians collapsed today, announced his resignation last night, and the country's crisis intensified. Mr. Karami, who is a Moslem, submitted his resignation to President Suleiman Franjieh, a Christian and an old political opponent of the Prime Minister, but there was no word whether the President would accept it. The resignation would weaken Lebanon's sectarian political arrangement, leaving the Moslem community without the representation of a strong, respected leader. It would also make possible an all-out civil war. [New York Times] President Suleiman Franjieh of Lebanon reportedly appealed to Rashid Karami to reconsider his resignation as Prime Minister, which has brought about a constitutional crisis. Mr. Karami appeared to be insisting that there be a cease-fire first between the Christian and Moslem factions. A new cease-fire, the 22nd in three and a half months, was declared tonight and, according to some accounts, Mr. Karami agreed to reconsider his resignation if this truce held. But there were reports of continued fighting. [New York Times] According to evidence obtained by the House Select Committee on Intelligence, the Central Intelligence Agency has systematically undervalued, in some cases by half, the military equipment provided to warring factions in Angola. The effect of the undervaluation has substantially diminished the face value of the American supplies. For example, under the C.I.A.'s accounting procedures .45 caliber automatic pistols were valued as low as $5 each, and semi-automatic .30 caliber carbines at $7.55. [New York Times] When one of the biggest strike movements in Spain in 40 years began to disrupt train service, the government drafted about 70,000 railroad workers. The government had previously put 55,000 postal workers under military rule and subject to court martial for refusing to work. The draft also threatens 4,000 subway workers in Madrid after negotiations with a private subway company broke down. Labor unrest has spread through Madrid's factories, banks, insurance companies and the building trades and has affected provincial centers, notably Barcelona. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 943.72 (+14.09, +1.52%)
S&P Composite: 98.32 (+1.32, +1.36%)
Arms Index: 0.74

	Issues	Volume*
Advances	1,174	21.60
Declines	379	5.15
Unchanged	348	2.70
Total Volume		29.45

* 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*
January 16, 1976	929.63	97.00	25.94
January 15, 1976	924.51	96.61	38.45
January 14, 1976	929.63	97.13	30.34
January 13, 1976	912.94	95.57	34.53
January 12, 1976	922.39	96.33	30.44
January 9, 1976	911.13	94.95	26.51
January 8, 1976	907.98	94.58	29.03
January 7, 1976	898.69	93.95	33.17
January 6, 1976	890.82	93.53	31.27
January 5, 1976	877.83	92.58	21.96