News stories from Wednesday April 5, 1978

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

The neutron bomb continued to generate controversy. The Carter administration was under growing pressure from Congress and West European allies, particularly West Germany, to reverse its decision to halt production of the weapon. But Washington officials said that only two options were being considered -- to stick with Mr. Carter's decision to cancel the project, or to leave open the possibility of proceeding with it at a later date.The apparent decision to forgo production of neutron weapons by President Carter is being reconsidered because of shocked reactions from his security advisers and Washington's closest European allies, a West German source said. The source had access to the minutes of a Bonn cabinet meeting at which the neutron production issue was discussed. [New York Times] A Social Security tax cut won the overwhelming support of House Democrats despite President Carter's emphatic call for no such legislation this year. Meeting in caucus, the Democrats voted 150 to 57 to press for a rollback of Social Security payroll taxes coupled with a transfer of some general Treasury revenues into the Social Security System. [New York Times] A plan to aid the dollar by selling relatively small amounts of gold at regular intervals from the 277 million ounce stockpile at Fort Knox is under consideration by the Carter administration, Treasury officials said. At present prices of about $180 an ounce, the yield would be between $54 and $72 million. The sales would be in response to appeals, mainly from foreign bankers, who view the weakness of the dollar as a threat to economic confidence and political stability. [New York Times] Sales of new foreign cars in the United States rose 2.5 percent last month over year-ago levels, according to reports by distributors, who said they had sold 192,000 imports to American buyers. Combined with the 882,850 American cars sold in this country last month, 1.4 percent fewer than in March 1977, the increase in import sales helped hold the overall decline in new car sales for last month to only five-tenths of 1 percent below the year-ago level. [New York Times] Stock prices bounded ahead in a brisk rally during a sharp increase in trading volume. The Dow Jones industrial average gained 7.71 points to close at 763.08. Buyers gained confidence from steadiness of the dollar in world currency markets, and more than 1,000 issues rose on the Big Board. [New York Times] General Motors won a victory when a federal court of appeals in Cincinnati ordered that a grand jury inquiry into charges of criminal tax fraud by the corporation be called off. The appellate court, in a divided decision, overruled a federal district court by upholding G.M.'s efforts to halt a Justice Department inquiry into the charges. The majority opinion said that a decision to appoint a lawyer of the Internal Revenue Service to the grand jury inquiry was unethical. [New York Times] Illegality by a federal judge was charged by the Justice Department in a case in which he imposed sentences of only one year on three Houston police officers convicted of a civil rights violation that caused the death of a Mexican-American in their custody. In a formal motion asking a review, the department said that the sentences given by District Judge Ross Sterling were "entirely inappropriate considering the offenses." [New York Times] About 5,500 policemen attended the funeral of Christie Masone, one of two New York City police officers slain in a shootout Sunday in Brooklyn. Some officers came from as far away as Detroit. Outside the church, Mayor Koch repeatedly called for Governor Carey to sign legislation passed by the state Legislature to restore the death penalty. Mr. Carey has pledged repeatedly to veto the legislation. [New York Times] Israel may have violated its accord with the United States in its use of American military equipment in southern Lebanon, but no action is planned to deprive Israel of further arms supplies, Secretary of State Cyrus Vance told Congress. The notice was sent in compliance with a new rule requiring the President to report promptly to Congress any possible violation of American arms exporting regulations. The letter added possible new strains on relations with Israel, but there seemed to be no inclination to carry the matter further. [New York Times] Apartheid is being eased in South Africa. The white government seems to have evolved a policy toward the black majority that will significantly modify some of the most hated aspects of racial separation without weakening overall white power. The ruling party has announced reforms that will progressively reduce discrimination and give blacks more authority over their lives. New legislation will lessen the inequalities between the racially separate school systems. Black townships will gain broad self-governing powers, and blacks will be given legal ownership of their homes. [New York Times] Latin America's Roman Catholic Church is embroiled in a bitter dispute between liberals and conservatives over the political strategy that bishops should pursue in the coming decade. The region's Catholic Church has moved sharply to the left in the last 10 years, with bishops and priests backing increasingly the struggle for social and economic changes and opposing military dictatorships. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 763.08 (+7.71, +1.02%)
S&P Composite: 89.64 (+0.78, +0.88%)
Arms Index: 0.60

	Issues	Volume*
Advances	1,027	18.86
Declines	428	4.74
Unchanged	425	3.66
Total Volume		27.26

* 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*
April 4, 1978	755.37	88.86	20.13
April 3, 1978	751.04	88.46	20.23
March 31, 1978	757.36	89.21	20.13
March 30, 1978	759.62	89.41	20.46
March 29, 1978	761.78	89.64	25.45
March 28, 1978	758.84	89.50	21.60
March 27, 1978	753.21	88.87	18.87
March 23, 1978	756.50	89.36	21.29
March 22, 1978	757.54	89.47	21.95
March 21, 1978	762.82	89.79	24.41