News stories from Tuesday January 3, 1978

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

President Carter will propose that Congress establish two agencies, one of them independent of the White House, to replace the Civil Service Commission. Officials said that the purpose was to end the abuses of the civil service system that the Carter administration believes took place under President Nixon. Allegations that the Nixon administration ordered hirings and promotions solely for political reasons and the destruction of some commission records in that period are under grand jury investigation. [New York Times] Most minimum steel prices devised by the Treasury Department to give the government an early warning of the illegal "dumping" of foreign steel at unfairly low prices were put into effect. The average "reference" price for various products was $330 a ton, or $20 a ton below the average price of comparable American steel products. The president of the United States Steel Corporation had recommended a $360 average, but it was not immediately clear whether the two composite figures were precisely comparable. [New York Times] U.S. Steel facilities that provided 5,000 jobs in Youngstown, Ohio, already reduced to half the former capacity, will have to be closed down eventually because of "very serious competitive disadvantages," the corporation's chairman said. The timetable, he said, would depend on how fast customers relocated from that declining steel-making area, and on pressure from the competition of imports. [New York Times] The dollar reached new lows against European currencies, with the British pound soaring 4.65 cents against it to more than $1.96. European currency traders are waiting in vain for signs of action by Washington to back up its concern over the dollar's slide. They say it has gone further than warranted by the economic facts and that the situation calls for some official stabilizing move. [New York Times] Stock prices fell sharply in the first trading session of 1978, with losers outscoring winners across the board by a ratio of more than 2 to 1, and glamour and blue-chip issues hardest hit. The Dow Jones industrial average sank 13.43 points to close at 817.74. [New York Times] A recommendation against more loans to New York City after the current seasonal loan program expires June 30 has gone to President Carter from the chairman and senior minority member of the Senate Banking Committee. The Senators, William Proxmire, Democrat of Wisconsin, and Edward Brooke, Republican of Massachusetts, wrote Mr. Carter late last month that a strict financial plan along with increased state, pension fund and bank loans would enable the city to meet all its needs for the next three years. [New York Times] Lockheed production workers returned to plants in Southern California after members of an International Association of Machinists local voted to end their 12-week strike. The bitterness of a split within the union ranks is expected to continue, however. [New York Times] President Carter flew to Riyadh from New Delhi for talks with King Khalid of Saudi Arabia and Crown Prince Fahd, the operating head of the government. A White House spokesman said the atmosphere was one of warm and mutual understanding as Mr. Carter outlined opportunities he saw for continued movement toward a comprehensive Middle East settlement. [New York Times] President Sadat will take a "moderate and flexible approach" on the problem of a Palestinian state when he meets in Aswan tomorrow with President Carter, according to informed Egyptian sources. They said the Egyptian position was inflexible on the right of Palestinians to determine the future status of the West Bank and Gaza, including independence or federation with Jordan. [New York Times] A conflict between Vietnam and Cambodia has reached a temporary stalemate, according to United States officials in Washington, with Vietnamese forces occupying as much as 400 square miles of Cambodian territory following an offensive last month. They said there has been sporadic fighting since 1975 between regular army units and full-scale battles last fall with thousands killed or wounded. [New York Times] The sale to China of military-related technology finds the Pentagon, State Department, White House and Central Intelligence Agency at odds. Also involved is the impact on relations with the Soviet Union. The dispute over which agency will control such transfers compounds the debate. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 817.74 (-13.43, -1.62%)
S&P Composite: 93.82 (-1.28, -1.35%)
Arms Index: 2.43

	Issues	Volume*
Advances	426	2.24
Declines	1,055	13.49
Unchanged	392	1.99
Total Volume		17.72

* 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 30, 1977	831.17	95.10	23.56
December 29, 1977	830.39	94.94	23.61
December 28, 1977	829.70	94.75	19.63
December 27, 1977	829.70	94.69	16.75
December 23, 1977	829.87	94.69	20.08
December 22, 1977	821.81	93.80	28.10
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