News stories from Friday January 6, 1978

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

The Federal Reserve Board approved an increase in the discount rate, to 6½ percent from 6 percent. The board said it had raised the key interest rate -- charged on loans to member commercial banks -- because of the recent disorder in world foreign exchange markets that has put the dollar under intense pressure. [New York Times] Citibank responded to rising short-term rates in the money market by raising the lowest rate it charges on corporate loans a quarter-point to 8 percent, the highest prime rate since October 1975. The Marine Midland Bank, the Bank of New York and the Fidelity Bank in Philadelphia then did the same, but the Bank of America, the country's largest bank, said it had "no plans at this time to change the rate." [New York Times] Stock prices dropped sharply and the Dow Jones industrial average, losing nearly 12 points, closed at 793.49, its lowest level in 27 months. The average has lost a total of 37 points in the new year's first trading week. The stock market, which has been disturbed by the dollar's weakness in foreign exchange dealings, was further distracted by rising short-term interest rates at home. [New York Times] The Federal Trade Commission said the administration's reference price plan that was devised to cut back imports of foreign steel was a "pernicious" form of trade restriction that will cost American consumers more than $1 billion a year. The aid program for the domestic steel industry was harshly criticized by the F.T.C.'s bureau of economics in a study of the American and foreign steel industry. The report says that a minimum price for steel imports, as called for under the reference plan, effectively compels foreign producers to act as if they were a "steel export cartel" and that "as with any cartel, its participants will have an incentive to cheat." [New York Times] Japanese scientists in World War II attempted to develop an atomic bomb for use against the United States, contrary to the general belief that they had not tried to make the bomb. They were thwarted, however, by air raids, lack of official coordination and funds, and the backwardness of atomic physics in Japan, according to an article in the current issue of the journal Science. The article was based on Japanese scientific sources. [New York Times] The Wampanoag Indians' bid for legal recognition as a tribe to reinforce their claim to a vast tract of land in the town of Mashpee on Cape Cod was rejected by a federal jury. The jury decided that the Wampanoags had not been a tribe in key years cited in their claim and that no tribe had existed continuously. The claim to 11,000 acres has clouded nearly every land title in Mashpee, causing a severe strain on its economy. But the Indians' suit was not dismissed. A federal district judge in Boston gave their lawyers until Jan. 20 to show why he should not enter a judgment of dismissal. [New York Times] Efforts to save Radio City Music Hall from closing were started at the public and private level. Some government officials said they were confident a way could be found to keep the historic theater in Rockefeller Center open. Lt. Gov. Mary Anne Krupsak said in Albany that she would meet in New York City on Sunday with city and state officials, union leaders and tourism industry representatives. The theater is scheduled to close for economic reasons April 12. [New York Times] John MacArthur, who built one of nation's largest fortunes by selling dollar-a-month insurance policies door to door, died in West Palm Beach, Fla., at the age of 80. He founded the Bankers Life and Casualty Corporation in Chicago. He also had interests in banks, textiles, oil and real estate, and was said to be Florida's largest private landholder. [New York Times] President Carter expressed his concern to the French Socialist leader, Francois Mitterrand, about the possibility that the Socialists' alliance with the Communist Party would be renewed. The White House decision to publicize Mr. Carter's comment, made privately during a meeting with Mr. Mitterrand, represented an unexpected involvement in French politics, only 10 weeks before legislative elections that could bring the Socialists and Communists to power. [New York Times] In Brussels, Mr. Carter promised European allies of the United States that he would involve them increasingly in his efforts to negotiate new agreements limiting American and Soviet nuclear weapons. He made the pledge at the end of a visit to the North Atlantic Treaty Organization's headquarters, winding up a tour of seven countries in eight days. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 793.49 (-11.43, -1.42%)
S&P Composite: 91.62 (-1.12, -1.21%)
Arms Index: 1.29

	Issues	Volume*
Advances	257	3.07
Declines	1,279	19.70
Unchanged	351	3.38
Total Volume		26.15

* 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 5, 1978	804.92	92.74	23.57
January 4, 1978	813.58	93.52	24.09
January 3, 1978	817.74	93.82	17.72
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