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The Inside Front
Wednesday October 29,1997
News
from campus, the state, the nation and the world
NATIONAL
NEW YORK - Wall Street made its best comeback ever yesterday. From record point drops Monday, stocks turned in record gains on volume that surpassed 1 billion shares for the first time.
WASHINGTON — The stock market's roller-coaster ride could scare some of the vitality out of the U.S. economy. Without the reassurance of ever-rising share prices, American consumers may shop less and businesses may trim expansion plans, analysts said.
WASHINGTON — In a low-key opening to a splashy state visit, President Clinton invited Chinese President Jiang Zemin to the White House yesterday as Washington and Beijing stood on the verge of ending eight years of diplomatic estrangement.
NATIONAL
Buyers cash in on stocks in Wall Street comeback
NEW YORK — Wall Street made its best comeback ever yesterday. From record point drops Monday, stocks turned in record gains on volume that surpassed 1 billion shares for the first time.
With stock prices pummed in Monday's selling spree, buyers rushed in to pick bargains, aided by announcements from corporate giants like IBM of their own multibillion-dollar share repurchase plans.
The Dow Jones industrial average, which lost a record 554.26 Monday and tumbled an additional 178 points in the first hour of trading yesterday, dramatically reversed course. The average of 30 blue chips ended the day up a record 337.17 points at 7,498.32. The previous biggest point gain, 257.36 points, came Sept. 2.
Yesterday's 4.7 percent rise in the Dow was the biggest percentage bounce back since the days following the Oct. 19, 1987, crash, when the average plumped 2.6 percent.
Broad-market indexes also staged an incredible turnaround, including a record rise by the Nasdaq composite index.
"Most people realized that we needed a correction — by any standard the market was overvalued," said Russ Labrasca, senior vice president at Principal Financial Securities of Dallas. "Now, we've had the pullback that brought the market back down, and people were ready to buy again."
Roller-coaster market could scare consumers
WASHINGTON — The stock market's roller-coaster ride could scare some of the vitality out of the U.S. economy. Without the reassurance of ever-rising share
Even if the market continues roaring back as it did yesterday, the vivid memory of Monday's 554-point plunge could leave stock owners less confident of gains and therefore less likely to spend.
prices, American consumers may shop less and businesses may trim expansion plans, analysts said.
Consumers' confidence already was sliding before this week's tumult, according to a survey of 5,000 U.S. households by a private business group in New York.
The Conference Board said its confidence index, an important measure of consumers' propensity to spend, dropped seven points in October to 123.3 from September's 130.2.
One economist — Bruce Steinberg of Merrill Lynch — already has shaved half a percentage point off his growth estimate for next year. That may not sound like much, but it amounts to about a $40 billion cut in production.
It works through something called the wealth effect. The biggest factor in consumer spending is income, primarily wages. But wealth — in the form of home prices and the stock market — plays a role, too. A rule of thumb is that Americans spend about $3 more for every $100 increase in wealth or $3 less for every $100 decrease.
But it's a rule with a lot of elasticity.
Gyrating stock prices have much the same psychological impact on business executives as consumers. Plus, there is a practical impact on companies' ability to raise the money needed to build more factories and buy new equipment.
"You have to issue more stock to get a given amount of money. So that's a detriment to capital spending," said economist Bob Dederick of Northern Trust Co. in Chicago.
And companies dependent on sales to Asia face the prospect of curtailed profits. With 29 percent of U.S. exports now going to the Pacific Rim, that too will mute the
On a brighter note, the flow of money out of the stock market and into the bond market has held long-term interest rates near 20-month lows, offsetting some of the dampening effect of stock turmoil.
vibrancy of the American economy.
If long-term rates stay low, that would save money for consumers still buying homes and big ticket items such as cars. And it gives businesses an alternative to issuing stocks — selling bonds.
Short-term interest rates probably will stay put. Many analysts had thought the Federal Reserve was gearing up to fight inflation with a dose of higher rates before the end of the year.
Chinese president visits White House amid protests
WASHINGTON — In a low-key opening to a splashy state visit, President Clinton invited Chinese President Jiang Zeminto the White House yesterday as Washington and Beijing stood on the verge of ending eight years of diplomatic estrangement.
Clinton wanted to greet Jiang in the
relaxed setting of the White House residence to review the agenda for today's summit and begin discussions, officials said. Secretary of State Madeleine Albright promised the talks would be candid and comprehensive.
bittside, Jiang's visit promised to the Jiang Zemin committee of the
capital's biggest demonstrations against a foreign leader, uniting critics on the left and the right against China's policies on abortion, human rights, religious freedom, arms sales, trade, Tibet and Taiwan.
A huge demonstration was planned today in Lafayette Park.
Thirty protesters stood on a street corner and yelled "Free Tibet Now" and "Long Live the Dalai Lama" as Jiang's 20-car motorcade arrived at Blair House, the government guest house across from the White House. The Chinese leader ignored shouted questions about human rights.
ON THE RECORD
A KU student's purse, Case Logic cassette case with cassettes and Sony walkman were stolen between 1 and 4:34 a.m. Sunday from the 600 block of Gettysburg, Lawrence police said. The items were valued at $245.
A KU student's Nokia 232 cellular phone was stolen between 11:30 p.m. m.Saturday and 12:30 a.m. Sunday from the 1400 block of Highway 40, Douglas County sheriff's officials said. The phone was valued at $315.
A KU student's yellow parking permit was stolen between noon Oct. 18 and 2:30 p.m. Sunday from lot 72, KU police said. The permit was valued at $75.
A KU student's Sony compact disc stereo and center dash column were damaged between 11 p.m. Saturday and 10 p.m. Sunday from lot 112, KU police said. The damage was estimated at $350
A KU student's passenger door window was damaged between 3 p.m. Saturday and 7:10 p.m. Sunday in lot 112, KU police said. The damage was estimated at $250.
A KU student's driver's door window and Sony cassette player were damaged between 3 p.m. Saturday and 7:50 p.m. Sunday in lot 112, KU police said. The damage was estimated at $750.
A KU student's red 1992 Honda was damaged between 1:30 a.m. and 1 p.m. Sunday in lot 112, KU police said. The damage was estimated at $150.
On Monday, Provost David Shulenburger's office allocated $472,161 to 19 University departments to upgrade instructional technology. The money came from a .5 percent increase in students' tuition and was supplemented by funding from Shulenburger's office. This is the name of
This is the breakdown of how the money was distributed.
Allocating funds Where Instructional technology funding will go:
Andrew Rohrback / KANSAN
Traffic booths protect students
Continued from page 1A
maintain safety.
"It's a safety issue," she said. "Historically, students couldn't walk across the street because there would be bumper to bumper traffic on Jayhawk Boulevard. The booths were set up so students would feel safe crossing the street."
Hultine said when people illegally drove through the booths, the attendants would try to record the license tag number, the car's make and model and the time it drove through.
However, that information really doesn't do much good. No fine or ticket is attached to running a booth, Hultine said. KU police said they don't send squad cars after violators.
Only if the illegal car parks on campus can a ticket be issued, Hultine said.
As a last resort, the parking department may send the offending driver a letter informing him or her that driving through campus booths is illegal, she said.
"We're getting ready to address this at the next parking department meeting," she said. "We want to give the booths signs that say it's illegal to drive
through and figure out how we can reduce the number of runs."
An attendant at Station A, located at Jayhawk Boulevard and West Campus Road, said she had more than 100 illegal cars drive through the booth each day.
"We tally how many people drive through," she said. "We keep numbers on illegal drive-throughs as well as service vehicles and guests."
The attendant said the number of illegal runs on her booth would probably be consistent with drive-throughs at the other three booths.
Hultine said the number of illegal runs has increased since last year.
The University used to have a booth located at Jayhawk Boulevard and 14th Street, but it has been replaced with metal gates that are only opened after 5 p.m.
"Some people might go by without realizing it's a closed campus," she said. "And I think maybe there's some fun involved."
ET CETERA
The University Daily Kansan is the student newspaper of the University of Kansas. The first copy is paid through the student activity fee. Additional copies of the Kansan are 25 cents. Subscriptions can be purchased at 119 Stauffer-Flint Hall.
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