News stories from Friday December 18, 1981

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

Federal budget deficits will increase over the next five years, according to estimates prepared by Senate Republican leaders in an effort to overcome President Reagan's resistance to tax increases and cuts in military spending and benefit programs. However, House Republican leaders met with Mr. Reagan and urged him to continue to oppose additional taxes, arguing that the income tax reductions enacted earlier this year, if left intact, will pull the economy out of its recession. The Senate deficit projections were presented at the White House by Howard Baker, the majority leader, and Paul Lazalt of Nevada. [New York Times] Revitalized U.S. Intelligence agencies are needed to offset a ''dramatic" increase in Soviet spying in the United States and a growing threat from international terrorists, according to Attorney General William French Smith. In an address in Los Angeles, in which he backed the Reagan administration's efforts to strengthen the intelligence agencies, Mr. Smith said that the administration was increasing the intelligence community's resources and rebuilding personnel levels to counter the "threat to our government and its citizens from hostile intelligence services and international terrorist groups." [New York Times] The 97th Congress ended its first session amid general agreement that it had turned conservative under the impetus of the Reagan administration and had reversed 50 years of growth in social programs. The President's popularity, political skills and firmness were cited as enabling him to persuade Congress giat his election was a mandate for a fundamental change in the direction of the federal government. The consequence was that Congress either repealed or curtailed hundreds of domestic programs. [New York Times] Criminal charges will not follow the investigation of the ballot security program sponsored by the Republican Party during the gubernatorial election in New Jersey in November, the Essex County Prosecutor, George Schneider, said. But he said that the security program "was a covert operation that was at the very least intentionally misleading and resulted in techincal violations of our election laws." [New York Times] The New York Daily News is for sale, its owner, the Tribune Company of Chicago, announced. The News, established in 1919, has the largest circulation of any general-interest newspaper in the nation. It has lost at least $11 million this year, reflecting continuing declines in circulation and advertising revenues despite efforts during the last several years to restore its profitability. The 3,800 News employees had expected management to seek contract concessions to bring labor costs in line with the paper's $342 million in annual revenues. [New York Times] The U.S. suspended an agreement with Israel on military cooperation that was intended to counter Soviet threats to the Middle East. The action was in response to Israel's annexation of the Golan Heights. The State Department said President Reagan ordered the suspension because Israel did not notify the United States of its plans to annex the Syrian area and because it did not take American concerns into account. The Israeli and Syrian governments were notified of the suspension Thursday night, an Israeli diplomat said. [New York Times] Poles are hoarding food, especially bread, according to the Warsaw radio. Broadcasts monitored outside Poland said members of the Communist Party and unarmed civilian volunteers are helping soldiers and police officers in patrolling Warsaw. Resistance to martial law continued in Gdansk and the Silesian coal region, according to reports received in Washington. [New York Times] The U.S. again expressed concern br the Polish people and publicly called on Poland's military government to free its political prisoners and to let Lech Walesa, leader of the Solidarity movement, "speak to his countrymen and to the world."Moscow reacted with a sharp denial of President Reagan's assertion that martial law in Poland was declared by the authorities with Soviet support. The official press agency Tass described Mr. Reagan's remarks concerning Poland at his news conference Thursday as "provocative" and "gross interference." [New York Times] No trace of Gen. James Dozier was found in a countrywide search in Italy. The American general, a NATO official, was kidnapped Thursday from his apartment in Verona. The Red Brigades have taken responsibility for the kidnapping. [New York Times]

Stock Market Report

Dow Jones Industrial Average: 875.76 (+5.23, +0.60%)
S&P Composite: 124.00 (+0.88, +0.71%)
Arms Index: 0.59

	Issues	Volume*
Advances	957	32.42
Declines	571	11.32
Unchanged	440	7.20
Total Volume		50.94

* 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*
December 17, 1981	870.53	123.12	47.22
December 16, 1981	868.72	122.42	42.37
December 15, 1981	875.95	122.99	44.13
December 14, 1981	871.48	122.78	44.81
December 11, 1981	886.51	124.93	45.84
December 10, 1981	892.03	125.71	47.02
December 9, 1981	888.22	125.48	44.80
December 8, 1981	881.75	124.82	45.14
December 7, 1981	886.99	125.19	45.72
December 4, 1981	892.69	126.26	55.04