News stories from Wednesday May 3, 1978

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

A move to cut capital gains taxes has led House Democrats to consider offering a compromise proposal that would liberalize the treatment of capital losses while keeping capital gains taxes at present levels. The sponsor of the Republican tax-cut proposal, meanwhile, contends that he has the support of a majority on the House Ways and Means Committee. [New York Times] The F.B.I. has 2,891 informers, according to the bureau's new director, who released the number for the first time in defending their continued use as "the most effective tool in law enforcement." The official, William Webster, who took over the Federal Bureau of Investigation three months ago, said that 1,789 undercover informers were being used in general criminal investigations, 1,060 on organized crime and 42 for domestic intelligence and terrorism. [New York Times] New car sales rose at the end of April to a level 7.6 percent above the final 10-day selling period in April, 1977, according to reports from the nation's four major auto makers. This plus a good showing in March, prompted industry officials to predict a good year for 1978, though not quite as good as some had previously forecast. [New York Times] Watergate "badly damaged" detente, according to Richard Nixon, writing in his presidential memoirs. Reviewing three summit meetings with Leonid Brezhnev, Chairman of the Soviet Communist Party, Mr. Nixon, who makes no major revelations, cites the success of the first meeting in 1972 and concludes that, by the time of the last meeting, less than two months before his resignation in August 1974, Watergate had limited his ability to overcome anti-detente forces in the United States. [New York Times] Sun Day on a Wednesday drew solar enthusiasts to a variety of celebrations across the country. Patterned on the 1970 Earth Day observances, Sun Day activities were designed to educate the public and encourage federal commitment to solar energy. Most of the day's events took place under appropriately sunny skies, but in New Orleans street fairs were canceled as a storm dropped more than four inches of rain on the city. [New York Times] Higher cable television sales were predicted at an industry convention in New Orleans. Citing growth from 2.1 million subscribers to more than 10 million today, some industry observers predicted twice that many by 1981. That would put cable in a third of the nation's television homes and make the industry an important competitor for advertising. [New York Times] Stock prices dropped sharply on the New York Stock Exchange as the Dow Jones industrial average declined by 11.35 points, its biggest loss since the beginning of a huge rally three weeks ago. Some analysts said the selloff represented an expected consolidation to set the stage for further gains. Others cautioned that recent buying was merely a rally in a continuing bear market. [New York Times] American-Japanese economic talks between President Carter and Premier Takeo Fukuda produced a plan to strengthen consultations on monetary policy. This was less than the commitment to foreign exchange market intervention sought by Japan. The United States, for its part, was not fully satisfied by a Japanese pledge to accelerate purchases from the United States. [New York Times] In a strategic arms compromise, the United States has decided to accept a Soviet proposal for an overall arsenal of 2,250 bombers and missiles on each side. A formal agreement, expected shortly, would in turn incorporate a separate ceiling of 1,200 favored by the United States on missiles equipped with multiple warheads. [New York Times] Arms for Turkey won support from the House International Relations Committee. By a vote of 18 to 17 it endorsed lifting the three-year-old ban on American military sales to Turkey without first insisting on Turkish concessions on Cyprus. Despite the outcome, the closeness of the committee vote signals a floor fight in the House. [New York Times] Tensions in southern Lebanon following military clashes led the French command of the United Nations peacekeeping force to cancel patrols in an effort to prevent a recurrence of violence. Amid concern that further fighting might delay the final withdrawal of Israeli troops, the Security Council Moved to add 2,000 soldiers to the 4,000-man United Nations force. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 828.83 (-11.35, -1.35%)
S&P Composite: 96.26 (-0.99, -1.02%)
Arms Index: 0.90

	Issues	Volume*
Advances	577	13.61
Declines	898	19.15
Unchanged	444	4.80
Total Volume		37.56

* 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*
May 2, 1978	840.18	97.25	41.40
May 1, 1978	844.33	97.67	37.02
April 28, 1978	837.32	96.83	32.85
April 27, 1978	826.92	95.86	35.47
April 26, 1978	836.97	96.82	44.45
April 25, 1978	833.59	96.64	55.80
April 24, 1978	826.06	95.77	34.52
April 21, 1978	812.80	94.34	31.54
April 20, 1978	814.54	94.54	43.23
April 19, 1978	808.04	93.86	35.06