News stories from Thursday May 11, 1978

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

The Federal Reserve raised the discount rate on its loans to the nation's banks to 7 percent from 6½ percent, and then moved quickly to minimize any alarm the increase might cause among the forces opposing high rates -- White House aides, labor leaders and the housing industry. G. William Miller, chairman of the Federal Reserve Board, said the increase was "merely an interest rate alignment" that had "no market significance," but the stock market nevertheless rose sharply in New York when the rise was announced. [New York Times] A Brooklyn rabbi pleaded guilty to a charge of bribing Representative Daniel Flood with "at least" $5,000 in return for the Congressman's intervention with federal agencies on behalf of the rabbi's B'nai Torah Institute. Rabbi Leib Pinter's plea was the strongest public indication to date of the progress of a federal investigation into charges by the Representative's former administrative assistant and others that Mr. Flood took bribes to influence federal appropriations. [New York Times] Organized labor's rejection of voluntary wage-price guidelines has deeply disappointed President Carter, his top inflation adviser said. Another aide said that description of Mr. Carter's reaction was "mild." George Meany, president of the A.F.L.-C.I.O., turned down the guidelines proposal at a White House meeting on Wednesday, saying that anti-inflation efforts should be aimed at prices rather than wages, putting another strain on his relationship with the President. [New York Times] A reduction in Social Security payroll tax increases that could save some workers as much as $123 next year was voted by the House Ways and Means Committee. The biggest savings would go to higher paid employees, but the change, if it became law, would result in some savings for all employees and their employers. [New York Times] Aldo Moro's burial place in a town north of Rome was crowded with visitors, and many wept. The coffin of the former Prime Minister of Italy was placed temporarily in a private chapel lent to the Moro family, which recently bought a plot of land in the cemetery in Torrita Tiberina, where the Moros had a country retreat. [New York Times] Stock prices surged following the Federal Reserve's increase in its discount rate to 7 percent from 6½ percent. Their momentum was sustained during the afternoon and closed at the best readings of the day. The Dow Jones industrial average gained 12.04 points, closing at 834.20. [New York Times] Henry Ford II attempted to reassure stockholders at the Ford Company's annual meeting in Detroit that he and company directors were innocent of the alleged wrongdoings they have been accused of in a stockholder's lawsuit. It was apparent, though, that many people in an audience of about 1,500 were frustrated when Mr. Ford and other company officers refused to answer questions from the floor about certain allegations made in the suit, and a Justice Department inquiry into an alleged illegal payment. [New York Times] Egypt and Israel survived in a 8 to 8 tie vote in the Senate Foreign Relations Committee, meaning in effect that the move to kill the plan had failed. Then, in an unusual step, the measure was sent to the floor without any recommendation for or against. A vote is expected Monday or Tuesday. The committee agreed unanimously to turn the measure over to the full Senate. [New York Times] The arms embargo against Turkey was upheld by the Senate Foreign Relations Committee, 8 to 4. Supporters of the administration, which wants to lift the ban, can theoretically reverse the committee, but the possibility seemed slight. The House International Relations Committee last week voted 18 to 17 in favor of lifting the embargo, which to be effective must be approved by both houses of Congress. Senator Paul Sarbanes, a leader of Congress's so-called "Greek lobby," was believed to have helped influence the committee's vote. [New York Times] China charged that Soviet forces had crossed its border on Tuesday and had shot at and wounded a number of Chinese. The Russians were said to have come by helicopter and on military boats to the Chinese side of the Ussuri River. China strongly protested the attack in a note to the Soviet ambassador, saying that the incident did not develop into an armed conflict. Chinese and Soviet forces fought bitterly on another stretch of the river in 1969. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 834.20 (+12.04, +1.46%)
S&P Composite: 97.20 (+1.28, +1.33%)
Arms Index: 0.43

	Issues	Volume*
Advances	1,010	26.63
Declines	514	5.82
Unchanged	390	4.18
Total Volume		36.63

* 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 10, 1978	822.16	95.92	33.33
May 9, 1978	822.07	95.90	30.86
May 8, 1978	824.58	96.19	34.68
May 5, 1978	829.09	96.53	42.68
May 4, 1978	824.41	95.93	37.52
May 3, 1978	828.83	96.26	37.60
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