News stories from Thursday February 5, 1981

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

President Reagan exhorted Americans to support sweeping spending and tax cuts to revive the economy. In a televised speech from the White House, Mr. Reagan said that the nation was "in the worst economic mess since the Great Depression" because "over the years, we have let economic forces run out of control." [New York Times] Budget cuts of $40 billion to $50 billion in the 1982 fiscal year are sought by the Reagan administration. The budget office has called for limits or reductions in virtually every major federal endeavor except the military. The cutbacks would affect not only domestic social programs, but also subsidies, loan programs and other forms of direct and indirect aid favored by labor and business groups. [New York Times] The first Reagan victory in Congress was marked as the House voted, 305 to 104, to increase the federal debt limit by $50 billion to $985 billion. Democrats withheld their votes until a majority of Republicans supported the politically sensitive but financially necessary measure. [New York Times] An American in Teheran was tricked by two revolutionary guards into taking part last year in a fictitious plot to free the 52 American hostages, according to an Iranian newspaper account of espionage charges made by a prosecutor. The American, Cynthia Dwyer, a freelance journalist, was said to have denied the charges Wednesday in a Teheran court.A dispute among Iranians intensified as 23 members of Parliament sought an open debate on the "doubts and questions" that have arisen over the accords that led to the release of the American hostages. The request was published in two newspapers that back President Abolhassan Bani-Sadr, who has questioned whether Iran achieved all it sought in the accords. [New York Times] The cost of the influx of refugees from the Caribbean was put at about $532 million by federal officials. Congress appropriated $734.4 million for processing and resettling the refugees through next Sept. 30. The officials said they should be able to keep within that budget if they are not faced with a new wave of arrivals beyond the 125,000 Cubans and 12,400 Haitians who came last year. [New York Times] Detroit's deepening financial problems were outlined by Mayor Coleman Young. In an annual message, he said that the automotive city would have a budget deficit of up to $130 million in the current fiscal year ending June 30 and a likely deficit of $100 million in the following year. Mayor Young acknowledged that tax increases and wage freezes were likely to be announced two months from now. [New York Times] Ella Grasso died of cancer at the age of 61. Mrs. Grasso, the former Governor of Connecticut who fell ill midway through her second term, was the first woman to elected Governor in her own right in the country. She managed the state with frugality and without an income tax. [New York Times] A conviction of collaboration with the enemy was issued against Pfc. Robert Garwood of the Marine Corps by a jury of five officers. It was the only such finding against a prisoner of war in Vietnam and the first in the military since the Korean War. Private Garwood faces a maximum penalty of life imprisonment. [New York Times] Washington assured NATO members that the Reagan administration would make no decision on the possible production of the neutron bomb without "thorough, prior consultations" with the allies, according to administration officials. They said that Secretary of State Alexander Haig had ad-ised the allies in messages to disregard comments about the enhanced radiation bombs made by Defense Secretary Caspar Weinberger because they did not represent an official position. [New York Times] Soviet criticism of President Reagan and his foreign policy continued in Moscow's press. In an unusually sarcastic commentary, the Communist Party newspaper Pravda asserted that Mr. Reagan suffered from "the childhood ailments of power." [New York Times] A 10-day general strike that gripped the southern manufacturing city of Bielsko-Biala, Poland ended when the government agreed to accept the resignations of the provincial Governor and three deputies. The agreement that called off the strike was reached after an hour and 45 minutes of talks that were mediated by the Roman Catholic Church. It was the first time that the church had become involved in bargaining. [New York Times] Soviet-bloc aid to Salvadoran rebels was indicated in secret documents, captured from the Marxist-led guerrillas, that are considered authentic by Washington. The documents suggest that the Soviet Union and Cuba agreed last year to deliver tons of weapons to the guerrillas from stores of United States arms seized in Vietnam and Ethiopia. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 946.76 (+4.78, +0.51%)
S&P Composite: 129.63 (+1.04, +0.81%)
Arms Index: 0.69

	Issues	Volume*
Advances	1,092	31.95
Declines	429	8.70
Unchanged	366	4.67
Total Volume		45.32

* 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*
February 4, 1981	941.98	128.59	45.53
February 3, 1981	941.38	128.46	45.95
February 2, 1981	932.17	126.91	44.08
January 30, 1981	947.27	129.55	41.16
January 29, 1981	948.89	130.24	38.16
January 28, 1981	942.58	130.34	36.69
January 27, 1981	949.49	131.12	42.25
January 26, 1981	938.91	129.84	35.37
January 23, 1981	940.19	130.23	37.22
January 22, 1981	940.44	130.26	39.88