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Show @ Financial Markets D6 @ Mutua! Funds 07-D8 ® Locai Business D8 Wednesday,22,1996 A dae ee AaFed Fed eaianaiare hold rates stone a 21, lo ee a& & DOW (industrials) 3 By JOHN D. McCLAIN Associated Pross Writer NYSEDiary Advances: Declines: 1,162 New highs 1211 | Unchanged: 860 wo| 1995 avg. comp. vol.: 422,909,640 National WASHINGTON (AP) The government posted a record monthly budget surplus of $72.4 billion in April, putting it on track toward a fourth straight decline in the annual deficit A larger-than-expectedsurge in income tax collections led the bipartisan Congressional Budget Office to lower its fiscal 1996 deficit estimate by $15 billion to $130 billion, compared with the actual deficit of $163.9 billion in fiscal 1995. Tax receipts in April were about $25 billion more than expected, the agency said Tuesday CHICAGO (AP) A federal judge gavepreliminary approval to a S45 million settlement of a civil lawsuit accusing Archer Daniels Midland Co, and competitors of fixing prices for an animal feed supplementthat speeds muscle growth U.S. District Judge MiltonShadur said Tuesday the proposed settlement gppeared fair and adequate The Decatur. Ill-based food processing giant has offered $25 million asits shareinsettling com: plaints that it manipulated the market for lysine, an aminoacid. Two other companies would pay $10.2 million each, bringing the total to morethan $45 million NEW YORK (AP) A top Securities and Exchange Commission examiner acknowled: in court that there were wide discrepancies in Kidder Peabody records the SEC is using to help prove its fraud case against: ex trader Joseph Jett The trades detailed in records supplied by Kidder are central to Briefly WASHINGTON (AP) Delta Air Lines and three European car riers today won preliminary approval to coordinate services as though they werea single airline Transportation Secretary Fed erigo Penatentatively approved an antitrust exemption permitting the deal involving Delta, Austrian Air lines, the Belgian carrier Sabena and Swissair. The final decision is dueafter May 28 following public comment A similar deal between United Airlines and Lufthansa German Airlines, approved earlier, was also made final today. The deals allow the airlines to coope in scheduling service and organizing their systems to work together as thoughthey were a singleairline The agreement does include con ditions designedto protect competition in three markets where the airlines now compete: Atlanta Brussels, Atlanta-Zurich and Cipcinnati-Zurich The Delta and United agreements are likely to increase travel directly between the United States and the Participating European counties SEC allegations that the once-star Kidder trader manufactured $350 million in bogus profits over more than two years to mask nearly $100 million in losses. Michelle Rebhandl, a prosecution witness who is the SEC's Northeast regional chief of compli ance and inspection examinations, said under cross-examination Tuesday that she could not tell from the records whether Jett faked profits. NEW YORK (AP) — Viacom Inc. has taken Spelling Entertainment Groupoff the auction block after the producer of “Melrose Place” and “Beverly Hills 902107 failed toattract an adequateoffer. Sumner Redstone, Viacom's chairman and chief executive, announced Tuesday that the owner of MTV, VH-1, Paramount Pictures and Blockbuster Entertainment had dednot to sell. Viacom owns 75 P 2, a producer of films as well as television programs. PHILADELPHIA (AP) — Discount carner Nations Air, stung by plummeting reservations in the wake of the Valwet crash, dropped service betweenthree majorcities. Tuesday's pullout came. after only 16 monthsof service between Pittsburgh, Philadelphia and Boston, and was expected to drive up fares sharply, leaving only one to two other airlines handling flights betweenthe cities. Nations Air president Mark McDonald said he “desperately searched” for ways to keepthe fledgling airline in service along its most heavily traveled route, but could not withstand the sudden drop in revenue World UE Gass) Performanceof key stock markets Percent Mm change W Previous close Amsterdam A 55418) Milan 9.2% 10698 Brussels & 1781 Paris Be 212059 i wv 12% IEE 0.4%: SESE Frankfurt Be BHM Sydney (9.4% 22512 Hong Kong Be 1088759 Tokyo 21979.00 1 im Vv 0.9% GERTE 0.5% EUR London a Zurich 2 S80 | MARKETS Amstoraay CBS.new shares genera! Mann MIB na oot available ana. Hobday Dollars/Metals Market LONDON(AP) — The U.S. cur- $390.89, up from $389. SOlate Tuesday. Earlier in Hong Kong, gold fell 40 cents toclose at $390.95. Silver taded in London at $5.29 a toy ounce, up from$5.26 late Tuesday rency was trading at 106.91 Japanese yen, down from 106.98 late Tuesday. Earlier in Tokyo,the dollar was quoted at 106.99 yen. up 0.27 yen fromlate Tuesday in Tokyobut below its overnight New York level of 107.18 yen. Other dollar rates in Europe compared with late Tuesday: 1.5418 German marks, down from 1.5473; 1.2694 Swiss fruncs, up from1.2670; 5.2120 French frances, down from §.2180; 1.7254 Dutch guilders, up from 1.7230; 1,558.90 Italian lire, up from 8.50; 1.3720 Canadian dollars, down from 1.3726, The British pound was quoted at $1.5097, down from $1.5120 Handy & Harman (only daily quote Gold - $390.70 Troy oz, NY Mer tatmonth Tue. Silver -$5.260 was at 7.3850, down from 7.4050 Tuesday. London dealers fixed a recommended gold price of $391.00 per ounce at midmoming. up from Jandy & Harman(only dail . Silver - $5.266 per troy ey Mere spot month Tue. Mercury $265.00 per 76 Ib flask, New York Platinum - $401.50-$403.00 troy o2., late Tuesday, The Mexican peso NONFERROUSMETALS NEWYORK(AP) — Aluminum ~ 70.7 cents per Ib, London Metal Exch. Tue. Copper - $1.2500 Cathode full plate, U.S. destinations Copper - $1.1670 per Ib, NY Mere spot Tue. Lead - 52 cents per Ib. Zine - 5067-.S172 per tb, delivered. Tin - Si.2070 Mon. Metals Week compos- ite price per Ib, Gold - $39] ae the closing price of $389.50 bid N.Y. (contract), Platinum - $401.20 Tuesday.In Zurich,the bid price was N.Y. Mere spot per troy oz, Tue. WASHINGTON —— Faced with conflicting economic data, Federal Reserve policy-makers decided Tuesday to leave interest rates unchanged. After meeting privately for more than four hours, the Federal Open Market Committee adjourned with: out making any change. Fed spokesman Joseph R Coyne said that the meeting had adjourned and that there would be no announcement — signal that Fed policymakers had left rates unchanged. Before the meeting private analysts had widely expected rates to remain untouched “The Fed's instinct is to wait and see,” said economist David Jones of Aubrey G. Lanston & Co. a New York governmentsecurities firm. “There no sense of urgency to make any policy shift.” Like most other analysts. Jones ValuJet stock A tounder of ValuJet soid 1.5 million shares of the airline's stock. which has tumbied. had predicted the FOMC would until more definitive ev of the economy's direction silable he FOMC ¢« posed of the Fed governors in W gion and five of the f2 regional bank pres dents After cutting the federal funds rate last July and 3 ber and January nomic decided n Decem mulate ec owth, the in March & ymmittee vid rates steady as dgns of a reboundi conomy eme The f al funds rate tral bank's target for Joans by t percent since grow few signs of inflat Since then, signals have May 12 May 21 been mixed. For tance. there have been Spotty signs of weakness. ATLANTA (AP) A Val founder and board member sc id Ni5 ments. The statement did notsf whether the investments were wet of some other company moveto renewtrade status BEUING — Beijing today welcomed President Clinton's decision to renew its most favored-nation trade status for China, but criticized the United States for subjecting it to an annual review The designation gives China benefits extended to most trade partners of the UnitedStates. Clin ton announced his renewal of the trade measure on Monday, saying the United States did not want to isolate itself from China with its huge market and labor force A Chinese government spokesmansaid the mutual trade benefits enjoyed by both China and the United States serve the fundamental interests of both sides “L believe President Clinton has made a wise decision, and we welcome it.” said Foreign Ministry spokesman! Cui Tiankai However, he added, “the annual review of MEN status by the United States is not con ducive to the establishment of a long-term, stable and normal economicand trade relationship We hope the U.S, willFeverse this erroneous practice’ which haslong been antiquated.” Vice Premier Li Langing warned arguments about extending the trade benefits for kets exist. th: ¢ last sever ¢ mists noted we feel conditions * entrev The unemploym April was just 3.4 percent jowest in morethan a year Many analy sts bel Associates the economists said restrictive policy be H a St. Louis said in their monthly probably would delay any action it sees several more months 1 untainted by the unusual of the first quarter The Fed might move to raise 4 ightenmng Jones of Aubre Lanston agreed. 1 ¢ the FOM¢ yrobably would until the August or etings at the soonest not until after the Nov | election k the bedaswery com fortable with where things are nght now Jones said They are watching sely irt but so f In energy prices those micreases wher sectors of st Maniyn S¢haja of Lufkin efit Secu it tral batik likey will shift its cor in the second half of the ye c rowth which she se ng s ValuJet co-‘founder sells $17 million in stock China in favor of Clinton’s By RENEE SCHOOF Associated Press Writer notably pressures where tight labor mar r & to pay loans used to make ir May3 ecently, Price MCTeases W Tl million shares of the airline's stock which has fallen sharply since one of its pk es crashedin the Flonda s earlier this month Evergl. ValuJet announced Tuesday that Timothy P. Flynn, on founders of the Atlanta-by count carner, soldthe shares Monday Crash of 7 ValuJet Flight 592. ing and some food products. There also have been reports of wage short ved: die to one-time such as a severe winter tee demand for heating products Economists at Laurence commercial been at 5.25 g continued sluggishness in manufacturing ‘sector, But at the same time, housing activity as at a high level despite ns ing mortgage rates Sull. some prices have beenris every year were harmful tor China-US. trade be: the dispute creates ur \ amongbusinesses on botna des the state-run Xinh News ncy reported Under the trade Clinton ts to notity SS formally about y June 3, starting a 60-da during which the House Senate could vote to rev China’s be: But China’s national state-run television news explained to viewers that Clinton could use his veto if Congress votes against most-favored-nation renewal After Clinton won the pres dency he abandonedhis previous position that Chi as trade pry hed s should be hts. He ress on hum. argued it is better to { y to deal win China fhan break contacts Clinton’s* actic n comes days after the United States outlined $3 billion in trade sanctions against Chinabecause of its fai ure to enforcea 1995 agreeme| to stoppiracy of U.S. compute programs, films and music China immediately responded witha list of retaliatory sanctions The two sides have until June 17 to seek a resolution before: the U.S, sanctions go into effect Chinese officials say China has lived up to the 1995 ment with the United States ValuJet stock closed Monday at $11 25 per share, down 37 percent trom $17.88 on May 10. the day before the crash he 1.5 million shares represent 7 percent stake in the company and about a quarter of Flynn's holding in the company. Flynn 1s expectedto bere-electedto the air line’s board at the annual stock holders’ Thursday, ValuJet spokesma Kenyonsaid Despite the airline's re: trou bles, the sale of the 15 million shares represents a tidy profit for, Flynn, who paid $I m help start the wares tO intI 92. At Monday's closing f pr the} shares were worth about($17 $} milliog Flynn whhe has never been acuve in the day-to-day manage ment of the airlme, did not) immediately return.a phone call to his gas office today rline execu: e West Air Holding Inc, paréRtgimpany of West Air Commenter es. Federal Trade Commission takes antitrust action against nation’s largest toy retailer By DARLENE SUPERVILLE Associated Press Wniter WASHINGTON Federal trade regulators votedtoday to file antitrust. charges against Toys R Us, the nation’s largest toy retailer The commission said the com pany “has used its market power to keep toy prices higher.” A formal announcement of the charges was scheduled for later today “We will be announcing antitrust charges against Toys R Us.” FTC spokeswoman Bonnie Jansen said Michael Goldstein, chief execu tive of the Paramus, N.J..-based toy retailer, was traveling today and unavailable to comment, his office said Goldstein said Tuesday the company’s buy gf practices were designedto protect its hefty invest ment in the toy industry, not to bul ly toy manufacturers FTC staff members recom mended that antitrust charges be filed against Toys R Us amid com plaints it pressures makers not to sell to rival retailers, particularly discount stores, The Wall Server Journal reported Tuesday One of those complaining to the agency was Price-Costco Inc warehouse shopping club basedin Issaquah, Wash.. the reported Golds! 1 Tuesday that Toys R Us avests millions of dol lars yearly to develop and promote toys He ¢ ee ained that ware house clubs th wen't as tied to the industry choose the hottest ems a few weeks: before Christmas and sell them at or below cost to attract shoppers. “Given behavior, and Toys R Us’ contribution to the industry we have told n tacturers that we reserve our unguestionable night to refuse to carry the same items as warehouse clubs,” Goldstein said This is central to our ability to compete supposedly the ultimate goal of FTC policy,” he added. “We are disappointedthat the FTC. after presumably fully understanding theissue, may bring this matter to tnal Goidstein who said the commission has acknowledgedthat the company’s Practices are “well within the law,” promised a court fight against any FTC action. He said Toys R Us had cooperatedful ly wath the FTC TOE R Us accdtlit€ Tor more than one-fifth of the $19-billion-a year U.S. re toy business. It operates. more han 1,000 toy stores worldwide and 214 Kids R Us clothing stores. Germany's labor unrest widens as government stands firm on spending BONN, Germany (AP) — Sunkes disrupting public services widened today as thousandsin the east walkedoff their jobs, but the governmentsaid it wouldn't budge trom its planto slash social spend- ing A three-hour warningstrike by about 1,000 mass transit workers in the easterncity of Leipzig creat ed huge traffic jams as commuters drove their own cars to work Transportion workers also struck in eastern cities including Weimar, Magdeburg and Halle. In the western half of the country, hospital and postal employees joined colleagues rallying in the streets instead of going to work social entitlements enjoyed by all Germans. In contract negotiations, hvering 3.2 million employees, blic workers are resisting dem: that they accept a two-year wage-freeze andredactions in iek pay aadoth- er benefits Kohl said the labor actin will not work “IT have never been impaessed by threats,” Kohl sailPhot Labor unions will “get nowhere;"»"* A report released today ty the Economics Ministry said the Ger- y Cohtthued, six- the year shrank at ; The German government is same rate it had shrunkin the under pressure to get its economy oa < in shape to qualify for a planned last quarter of 1995 — apt 4° European monetary union in 1999. cent, Chancellor Helmut Kohl's. preausterity plan would save 33 billion by cutting deeply into |