News stories from Friday August 12, 1977

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

President Carter and his chief treaty negotiators stressed that there were no restrictions on the right of the United States to intervene in the defense of the Panama Canal under the proposed treaties giving Panama jurisdiction over the canal by 2000. Ellsworth Bunker and Sol Linowitz, in statements that seemed to be directed at overcoming conservative opposition to the treaties, said that it "enhanced" rather than weakened American security interests. President Carter made a brief statement on behalf of the treaties, saying that they permitted this country to act in defense of the canal "as we may determine necessary." [New York Times] The first flight test of the space shuttle Enterprise was successful. After being released by it Boeing 747 carrier, the shuttle made a five-and-a-half-minute flight ending in a smooth glide landing on a dry lake bed in the Mojave Desert in California. The shuttle is the first of a fleet of re-usable vehicles planned by the National Aeronautics and Space Administration for space travel. [New York Times] The investigation of Bert Lance's financial affairs by the Comptroller of the Currency has been widened to include loans that may indirectly have benefited the budget director, sources familiar with the investigation said. Bank records are being searched for loans that may have been extended to about 20 persons, including Mrs. Lance, other members of the family and business associates. Mr. Lance's relationship with Jake Butcher, a Tennessee banker, is also a new facet of the investigation. [New York Times] David Berkowitz, the man accused of being the .44-caliber killer, began to undergo psychiatric examinations in Kings County Hospital in Brooklyn, where the latest victim of the "Son of Sam" died Aug. 1 and where her seriously injured companion is still being treated. The tests will determine whether he is mentally fit to stand trial. Meanwhile, a special grand jury convened to hear evidence that is expected to lead to Mr. Berkowitz's indictment. [New York Times] Reacting to rising short-term rates and fears of a slowing economy, the Dow Jones industrial average dipped to its lowest level since 1976. The average lost 6.33 points and closed at 871.10, bringing its loss for the last two sessions to nearly 16 points. It also plunged through what some technical analysts had regarded as a "support" zone between 875 and 880. The average was at its lowest reading since Jan. 2, 1976 when it closed at 858.71, but at that time stock prices were rising. Today's setback was accompanied by declining stocks that outnumbered rising ones by nearly 2 to 1. [New York Times] As part of a plan that it hopes will extricate it from bankruptcy proceedings this year, Penn Central has offered to compromise on $372 million owed in back-tax payments in 15 states and the District of Columbia. The company has paid about $16 million of the maximum of $175 million that it is prepared to pay under the compromise plan approved by a reorganization court last spring. The company's tax creditors have until Oct. 22 to accept or reject the compromise offer, and despite there being no response from some communities the payments are being mailed anyway. [New York Times] The crippled and destitute widow of Pvt. Eddie Slovik, the only American soldier executed for desertion in World War II, was offered "sympathy" by an Army civilian panel, which, however, rejected her request to reverse his conviction so she could collect $68,000 in government life insurance benefits. The panel said that it could find nothing improper in the execution. [New York Times] An unexpected takeover bid for the Babcock & Wilcox Company was made by J. Ray McDermott & Company. with a tentative offer of $55 a share for an additional 35 percent of the Babcock stock. McDermott already owns 9.9 percent of the company's shares. The offer would make McDermott a strong competitor with the United Technologies Corporation, whose tender offer for all Babcock shares was recently raised to $48 from $42 a share, but a Babcock spokesman said the company "was determined not to recommend" the McDermott offer to its shareholders. [New York Times] A spectacular helicopter rescue on the slopes of the Soviet Union's highest mountain, the 24,590-foot Communism Peak, failed to save the life of one of the country's leading scientists and educators, Rem Khokhlov, 51 years old, who was rector of Moscow University. He died Monday in a Moscow hospital of complications from an illness he contracted on the mountain. He was a physicist and was also vice president of the Soviet Academy of Sciences. His obituary in the official Soviet press was signed by Leonid Brezhnev and other Soviet leaders. [New York Times] Chile's powerful secret police agency, the National Intelligence Directorate, or DINA, has been disbanded by President Augusto Pinochet. The announcement that the agency had been terminated by a decree dated Aug. 6 coincided with official visit in Santiago of Terence Todman, the United States Assistant Secretary of State for Inter-American Affairs. The agency had been charged with killing and torturing opponents of the military government. Its end was regarded as a move toward improvement of relations with the United States. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 871.10 (-6.33, -0.72%)
S&P Composite: 97.88 (-0.28, -0.29%)
Arms Index: 0.99

	Issues	Volume*
Advances	469	4.57
Declines	893	8.61
Unchanged	480	3.69
Total Volume		16.87

* 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*
August 11, 1977	877.43	98.16	21.74
August 10, 1977	887.04	98.92	18.28
August 9, 1977	879.42	98.05	19.90
August 8, 1977	879.42	97.99	15.87
August 5, 1977	888.69	98.76	19.94
August 4, 1977	888.17	98.74	18.87
August 3, 1977	886.00	98.37	21.17
August 2, 1977	887.39	98.50	17.91
August 1, 1977	891.81	99.12	17.92
July 29, 1977	890.07	98.85	20.35