News stories from Thursday December 15, 1977

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

Republicans denounced as "the biggest peacetime tax increase in history" the Social Security financing bill that Congress passed and sent to President Carter, who is expected to sign it. Congress then adjourned until Jan. 19. The Senate passed the bill, 56 to 21, and the House, 189 to 163. The bill authorizes a series of Social Security payroll taxes starting in 1979, affecting more than 100 million employers, employees and self-employed people. The Republicans are expected to make it a political issue. [New York Times] To help support the declining United States dollar against the buoyant mark, West Germany cut interest rates and placed new restrictions on incoming foreign money. The Bank of England's public warning about the danger of what it said was the Carter administration's apparent disregard for the dollar's value was believed to have influenced the West German Bundesbank council. [New York Times] Stock prices declined in erratic trading, with no sign of Wednesday's rally. The Dow Jones industrial average dropped 4.85 points to 817.83. It had gained 7½ points on Wednesday. [New York Times] New York state was criticized by Senator William Proxmire, the chairman of the Senate Banking Committee, for making only "a weak, feeble effort" to help New York City with its financial difficulties. He was also critical of the state for going ahead with plans for a tax cut. On the second day of hearings in Washington on the city's request for an extension of federal loan assistance, the Senator was extremely doubtful of any more loan assistance to the city, saying that the wide range of estimates of the city's budget gap were "disturbing" because they brought into question the reliability of the city's figures. [New York Times] New Jersey's state income tax was made permanent by the state Senate tonight and Governor Byrne jubilantly signed the bill minutes later. The tax was to expire next June. Passage was assured when Senator John Skevin of Oradell left a hospital bed to cast what turned out to be the decisive vote from a stretcher outside the Senate chambers. The 21 to 14 vote eliminated the tax's cutoff date of June 30, 1978. [New York Times] Japanese and American trade negotiators ended four days of talks in Washington, still far apart over actions necessary to reduce an $8.5 billion trade surplus With the United States. But they said two recent cabinet decisions in Tokyo had improved prospects for an agreement. The most important action in Tokyo was the setting of a 7 percent growth target for Japan's economy next year, which if met would be by far the best advance of any industrialized nation. The Japanese also said they would enlarge their budget deficit, borrowing 37 percent of what they will spend, breaking through a traditional debt ceiling of 30 percent. [New York Times] Prime Minister Menachem Begin's proposals affecting the Israeli-occupied territories of the West Bank and the Gaza Strip and Sinai will be presented to President Carter tomorrow in Washington, an Israeli source in Jerusalem said. Mr. Begin, the source said, was expected to propose civil autonomy to Palestinian Arabs in the West Bank-Gaza Strip, while Israel maintains a strategic presence in the occupied territories. Meanwhile, Secretary of State Cyrus Vance returned to Washington from the Middle East and reported to President Carter that Israel was "rethinking" its once strongly held insistence on retaining complete control over the West Bank territories. [New York Times] The right to speak for Palestinian Arabs at any Middle East peace talks has been forfeited by the Palestine Liberation Organization, President Carter said. A solution to the Palestinian problem nevertheless is still vital to achieve enduring peace in the region, the President observed at a news conference, saying that the P.L.O.'s hostility to Israel had removed it from "serious consideration" for a role in any peace talks. [New York Times] Kidnappers held the 21-year old son of President Spyros Kyprianou and threatened to kill him unless all prisoners in Cyprus were freed. Two gunmen, believed to be Greek Cypriot extremists, seized Achilleas Kyprianou, a second lieutenant in the Cypriot National Guard at a military camp. The kidnappers, the government said, were seeking amnesty for "convicts, persons in custody and wanted persons." [New York Times]

Stock Market Report

Dow Jones Industrial Average: 817.83 (-4.85, -0.59%)
S&P Composite: 93.55 (-0.48, -0.51%)
Arms Index: 1.69

	Issues	Volume*
Advances	661	6.24
Declines	755	12.01
Unchanged	496	3.36
Total Volume		21.61

* 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 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
December 7, 1977	807.43	92.78	21.05
December 6, 1977	806.91	92.83	23.77
December 5, 1977	821.03	94.27	19.16
December 2, 1977	823.98	94.67	21.16
December 1, 1977	825.71	94.69	24.22