The Commercial Appeal from Memphis, Tennessee • 16

i The Commercial Appeal Business Memphis Tenn Saturday February 25 1984 B4 r-In Business- streak Rally shatters late Thursday reported a less-than-ex-pected $300 million Increase in the money supply keeping a relatively tight rein on the supply of money and credit the Federal Perve is virtually ensuring that a new round of rapid inflation will not reappear in the foreseeable said Irwin Kellner chief Manufacturers Hanover economist Kellner said the recent slide was not justified when viewed against corporate profits Some investors however have shown concern the rapidly ffxpumting economy will rekindle The Big Board volume of 102620000 shares was up only slightly from the 100220000 traded Thursday expect the volume to go bananas after what been through the past six said Trude Latimer of Evans Co did pick up a bit in the final hour however is typical rebound from this six-week slide and Thursday said John Burnett of Donaldson Lufkin ft Jenrette think it is possible we have made a turn but we are going to have to wait and see about In addition to the deficit figures investors were encouraged that the Fed al Reserve expanded the growth rate targets for the nation's money supply The Dow which gained 042 Thursday finished ahead 1623 for the week overall The closely watched average had fallen 15246 points in the six weeks since Jan 6 The Dow transportation average climbed 1687 to 51089 and the Dow utilities average rose 135 to 12505 The New York Stock Exchange index jumped 180 to 9049 and the price of an average share increased 65 cents Standard Poor's SOOstock index rose 322 to 15751 Advances routed declines 1340-329 among the 1986 issues traded NEW YORK (UPI) The Dow Jones industrial average soared 3047 points to 116510 yesterday as Wall Street snapped out of a six-week losing streak with its most explosive rally in seven months Although most analysts said the rally was a normal rebound from the most prolonged market decline since 1980 some buying was sparked by the governments report that the federal bud- 5et deficit narrowed to S5A billion in anuary from more than S9 billion in DflCffllPCT The 3047 in the Dow Jones indus trial average was the biggest since it climbed 3074 on July 20 after the Feder Honda plans luxury car Honda which got a foothold in the American auto market by selling one of the smallest cars will go after the US luxury car market American Honda Motor Co Inc will join with British Leyland Ltd the British maker of Jaguar cars to produce an expensive sedan in Britain for export to the United States by 1986 a Honda source said yesterday The new car will not carry the Honda name because the company wants the public to think of it as unrelated to Honda's small-car line the company said Stable prices and supplies of gasoline coinciding with the end of the four-year auto sales slump have pushed up sales of bigger more profitable cars a market theuS manufacturers have had almost to themselves AMC plans stock moves American Motors Corp said it will sell 10 million shares of its common stock to the public and add another 3 million to its employee pension funds In addition the French automaker Renault the principal holder of AMC stock will purchase another 111 million shares of AMC stock so its holdings in the company remain at 46 percent AMC said The proceeds of the offering will be used for the development of new products ISUZU MOTORS LTD said it lost 513 billion yen in its fiscal year ended Oct 31 1983 equivalent to a S22 million loss at current exchange rates In the previous year Isuzu had net income of 364 billion yen OFFICIALS OF WARNER Communications Inc said they have received and are studying a letter from a company controlled by newspaper publisher Rupert Murdoch demanding a list of Warner stockholders Murdoch wants the list to determine the feasibility of acquiring control of Warner Murdoch now has about 7 percent of the shares Ouachitas erupt in sudden boom of oil-gas hunt field lies beneath the Ouachita Mountains fact that knowledgeable people are spending the money indicates considerable oil and he said Gray said Exxon recently sent a seismograph crew into the Ouachitas to explore for oil but Exxon would not confirm it Gray believes the Ouachitas could contain 10 billion to 20 billion barrels of oil making it one of the largest reserves in the United States comparable to north slope The Ouachitas also could hold more than a trillion cubic feet of natural gas which would be the largest gas field in the nation he The oil and gas reserves lie below 20000 feet of sedimentary rock however Drilling a single well could take six months and cost $10 million he said Gray told a Senate Energy subcommittee last week that an oil deposit of 10 billion barrels would be worth $15 billion in severances taxes to Arkansas where one of every five families lives below the poverty line It also would generate $6 billion in conservation taxes and up to $20 billion in -federal windfall profits taxes he said MENA Ark (UPI) A geologist's prediction that the Ouachita Mountains in western Arkansas may harbor major oil reserves has set off a rush to snap up mineral rights and begin exploration Geologist John Gray of El Dorado predicted drilling could begin within a month we find a major reserve up there it will have an enormous Impact on he said Eight new oil leases have been filed with the Polk County clerk in the past week Three-fourths of the land in Montgomery County has been leased in the past three years and prices for mineral leases have soared in Scott County oil companies started leasing in 1978 they cost about $1 an said Scott County Clerk Evelyn Ammons has it that in some parts of the county leases are going to go for $150 an acre Gray an independent geologist estimates about 15 million acres of land in western Arkansas are leased to oil companies mainly to Sohio Liberty and Hunt oil companies Arkansas Louisiana Gas Co and Texas Oil and Gas Co State Geologist Norman Williams agreed with Gray there is a large oil UPI Truckers seek brakes as new taxes roll up ends note UNDER PRESSURE from Congress and the courts the Reagan administration has approved an additional S76 million in direct lending by the Farmers Home Administration under the "economic program to help hard-pressed farmers officials acknowledged The new authorization raises the total of direct lending under the economic emergency program to S576 million Searle option trades eyed Federal investigators are looking into trading of Searle Co stock options the company confirmed amid reports the case revolves around CBS news stories questioning the safety of new sweetener aspartame Amid accusations that CBS employees invested in options before the broadcasts were aired Searle was contacted by the Securities and Exchange Commission about an informal investigation of trading in puts on Searle stock INTERNATIONAL BANKS have approved the latest refinancing of deot the largest in the developing world Citicorp vice chairman William Rhodes said The first disbursement of the total S65 billion will be made in March Brazil whose foreign debt totals more than S93 billion asked for rescheduling of debt and interest due this year to be spread over eight years UNION LEADERS representing 55000 General Motors workers in four states mapped strategy including a strike for winning back $3 billion in concessions they made in 1982 to help GM become more competitive Negotiations will begin with GM this summer on a new contract to replace the pact which expires Sept 14 SOME 40000 AIR travelers many of them bound for the United States were grounded yesterday when British Airways flight attendants staged a 24-hour unofficial strike a British Airways spokesman said Compiled by Paula Wade by another increase in the diesel fuel who have formed a lobbying coalition with shippers the food industry and farm groups want to drop the heavy-truck tax altogether and raise the federal diesel tax from 9 cents per gallon to 14 cents vehicles weighing more than 10000 of diesel-burning vehicles weighing than 10000 pounds cars pickups vans would pay the higher tax at the and be reimbursed through an income credit estimated at $25-530 a year administration agrees that some tax should be made but has its own proposal for adjustments The Department of Transportation wants a $650 maximum user coupled with a 6-cents-per-gallon increase a year earlier diesel tax for vehicles weighing more But the airline said price com-than 10000 pounds petition earlier in the year wi- DOT proposal raises the lower weight dened its loss for the year to $111 for payment of the user tax from the 33000 pounds to 55000 pounds would relieve about 700000 mediumsized trucks from Republic on profitable trucks from having to pay the user tax the year 1 million from $399 million in 1982 In Memphis the airline said boardings in January rose 20 percent to 77821 passengers By BRIAN NUTTING Cinriliil Qmrtrty WASHINGTON A drive by the trucking industry to head off what it considers to be unfair federal taxes is picking up speed The truckers want action before July 1 when fees paid by heavy trucks to use the federal highways are scheduled to jump from $240 a year to $1600 annually an increase of nearly 600 percent The maximum fee which applies to trucks weighing 80000 pounds will increase to $1900 by 1988 Truckers say they can ill afford higher taxes as they struggle to recover from their worst financial period in decades The trucking industry from the start bitterly opposed the user-fee increase which was mandated by Congress in the Surface Transportation Assistance Act of 1982 Indeed the 30000-member Independent Truckers Association was so angry about the fee increase that is staged a violence-marred strike Jan 31 through Feb 10 1983 winning promises from some members of Congress that the law would be reviewed The 1982 law increased gasoline and diesel fuel taxes the user fee and other taxes to raise revenues to repair the highways and provide jobs However it focused more on the total to be raised than on how much each group should pay Thus according to Rep Bill Frenzel (R-Minn) inequities inherent in the heavy vehicle use tax were never fully considered Some members such as Sen Jesse Helms (R-NC) and Rep Arlan Stangeland (R-Minn) warned at the time that unfair burdens were being imposed on the trucking industry But others contended the law would allow truckers to operate heavier and wider vehicles thus earning more revenues to offset the higher taxes Truckers argue that the fee increase com- based ing on top of a Scent hike in the 4-cents-per-gallon federal go basis tax Truckers some fuel for pounds Drivers less and pump tax The change tax in the The limit current which 1 As ers of pounds the A raise law tax on diesel fuel required in By Robert who fourth-quarter profit amounted to 10 cents a share The 1983 fourth-quarter results were affected favorably by a $61 million adjustment because of an overaccrual of expenses the airline said The 1982 loss was reduced by $178 million from the sale of tax benefits Operating revenue rose to $3864 million from $3486 million a year earlier while operating expenses fell to $3591 million from $3789 million For the year operating revenues were $151 billion down from $153 billion while operating expenses rose to $154 billion from $149 billion The annual results included the sale of tax benefits of $13 million in 1983 and $178 million in 1982 in the industry-backed legislation driv compared to the same month a year ago weak traffic and the need by some airlines to generate immediate cash flow all contributed to predatory pricing last said Daniel May president and chief executive officer vehicles weighing less than 10000 would pay the increased diesel tax at pump and claim an income tax credit key issue is whether the proposals will the same amount of revenue as the 1982 WPTY price put at 1 3 million Broker plan turned down latory authorities Precht said the present management at the first independent television station would be retained He said the station is profitable but declined to divulge any figures Under his ownership an early priority will be establishing a full-time news operation he said Precht Communications owns and operates television stations in Mis MARC MELTZER Precht a Los Angeles-independent television producer was producer of the old Ed Sullivan Show is the new owner of Memphis television station WPTY Channel 24 Terms were not disclosed but industry sources said it sold for about S13 million The station was sold by Delta Television Corp of New York which is con- sion corp of New York which is conr of which originated at the Mid-South Fair in 1970 Twelve of his 25 years in television involved producing the long-running Sullivan show More recently he has produced the Country Music Association awards show for the last eight years on CBS and the syndicated Knoxville Fair special hosted by Glen Campbell Precht also formerly owned cable television systems elsewhere in the country But he has since sold them in favor of conventional over-the-air broadcasting my point of view broadcasting is a much more interesting and challenging he said 1983 will put added strains on the financially strapped industry They note that hundreds of firms have gone out of business and about 100000 trucking Teamsters are out of work partly as the result of the recession and partly because of increased nonunion competition Truckers disagree about the extent of highway damage caused by heavy trucks and they note that the user tax as it now stands will be the same whether a truck travels 10000 miles a year or 100000 The truckers say it would be more equitableto raise the money on a pay-as- soula Butte and KalispeU Mont and trolled by principal stockholders Mar- nm SiiiHvn Piwtnrtlww in-1 tin Connelly and Arthur Muth vision production company founded They started the station five years ago Precht and Ed Sullivan the late at a cost believed to be about S3 mil- weekly variety show host lion Through tnat firm Precht pro- The sale must be approved by regu- duced weekly telecasts one Food prices pace rise in inflation Consumer Prices Seasons ly adjusted percent changes from previous months i- I UP 06 in January 8- A group of Baldwin-United Corp annuity holders in Memphis has rejected Merrill Lynch proposal for a replacement policy for its customers who bought the annuities Also Morgan Keegan Co another brokerage which sold the annuities has sent letters to its customers informing them that the firm is monitoring the Of the 10 brokerage firms that sold the policies in Memphis Merrill Lynch and two other national brokerages have proposed replacement policies for their own customers The rest including Morgan Keegan have not done so In a letter to Merrill Lynch the local group called Ripped Off Investors! said the company's proposal was unacceptable The letter signed by group leaders Barbara Booth and Cheryl Yarbrough said the proposal failed to match terms contained in annuity original Baldwin contract The group wants brokerages to reimburse them based on the terms The funds of all Baldwin annuity holders Including more than 3000 in Tennessee were frozen by the courts because of the shaky nnriai condition State regulators are seeking court approval for a plan which eventually would return policyholders' principal plus interest but at a rate far lower than provided by the contract In its letter Morgan Keegan said unfortunate events related to Baldwin unfolded so fast that observers on all sides were caught by surprise Had we any inkling that the investment was unsound we obviously would have urged you to avoid The firm also said that of the larger brokerage firms have issued statements proposing alternative plans ifr reimbursement range through most of the rest of the At the White House spokesman Larry Speakes said the January increase prospects remain excellent for continued low rates of Gasoline prices fell for the fourth straight month declining 11 percent it said Natural gas prices tumbled 17 percent Medical care costs rose 07 percent The January report also said housing costs were up 05 percent Transportation costs edged up 02 percent New car prices were unchanged but used cars prices soared 12 percent Clothing prices were up 0 percent and entertainment costs rose 02 percent In all the Consumer Price Index stood at 3052 in January meaning that goods costing S10 in 1967 would have cost SO52 last month the American Telephone ft Telegraph Co Despite the Mg jump in prices most analysts expect a fresh surge in inflation and were predicting that prices would rise about 5 percent this year Inflation stood at 3J percent last year the best showing since 1971-1972 when President Nixon imposed price controls It was 39 percent in 1982 after registering 124 percent in 1980 and 89 per-cent in 1981 David Wyss economist at Data Resources Inc a consulting firm in Lexington Mesa called last month's increase "pretty much a one-time caused mostly by freezing temperatures The price measure he said settle back down to the 04 percent WASHINGTON (AP) Soaring food Erices caused mostly by unusually arsh weather boosted consumer prices 06 percent in January the biggest increase in nine months the government said yesterday Led by sharply higher costs for meat fruits vegetables and eggs food prices jumped 1j6 percent The list Increase of that magnitude occurred in August 198a Prices for food bought at grocery stores skyrocketed 24 percent matching the increase of February 1977 the Labor Department said in releasing its new report on the Consumer Price Index It also said costs of local telephone service mushroomed a record 52 percent largely because of regulatory changes acconanying the breakup of -2- MAMJJ AS ONDlJ 1983 84 UPI.