10A Monday, August 18, 1997 NATION/WORLD UNIVERSITY DAILY KANSAN Dow Jones loss scares investors into selling spree By Joyce M. Rosenberg The Associated Press NEW YORK — It looks scary — the Dow Jones industrial average loses 247 points in one day — 565 points in just more than a week. Is it finally time to worry about a free fall? Or is this just another of those periodic pullbacks the market goes through after climbing very high, very fast? Wall Street had one of its most volatile weeks in years, with the Dow average dropping 336 points, including Friday's 247-point slide. Yet only the week before, on Aug. 6, the blue chip index had set a new closing high of 8,259.31, which means that the average has lost almost 7 percent in seven trading days. It's almost inevitable since the crash of 1987, when the Dow dropped 508 points in one day. But it's important to remember who was doing the selling Friday. It wasn't individual investors who have been pouring money into mutual funds the last few years, which has propelled the market to new highs. It was professional money managers whose jobs depend on delivering big returns for their clients. Individual investors already have proven they can withstand a lot of volatility. They didn't abandon the market during a big slump in the summer of 1996, and they didn't flee last spring, when the Dow lost 10 percent of its value in about a month before recovering all its lost ground and climbing 1,200 points to this month's record close. There's no reason to believe individual investors are going to bail out en masse this time. They're largely in for the long haul. Besides, if they did want to take their money out of the market, they know they're not going to make much money by putting it in a bank certificate of deposit. Market scares Recent Dow Jones Industrial average results: - Friday's close: 7694.66 - Friday's loss: 247 points, the company's loss. tightly stress. 247 points, the greatest one-day drop since a 508 point loss in 1987 Record high. Aug. 6, at 8259.31 506 point loss in 1987. ■ Last week's fall: 363 points ■ Record high: Aug. 6, at - Decline since Aug. 6: 7 percent Market watchers, mindful of the fact that stocks began 1997 with the Dow at 6,448, have come to expect — and even endorse — corrections, occasional periods when traders take their profits and reassess how high the market should be. At 7,694.66 after Friday's fall, the Dow remains more than 19 percent higher than when it began the year. Still, the people who sold on Friday had their reasons. Probably the biggest is that investor nervousness increases in direct proportion to the market's rising value. So people who believe that the market must inevitably fall, and worry about preserving their profits, will jump at the first sign of trouble. The government released wholesale and consumer price reports that showed inflation remained under control, but that didn't stop investors from agonizing about the numbers. Their concern was that the Federal Reserve's policy-writing committee will raise interest rates to ensure that inflation doesn't regain momentum. Rising interest rates make it more expensive for everyone to borrow and undermine corporate profits. There also is a break now for sellers since President Clinton signed a bill that included lower capital gains tax rates Aug. 5. Labor Secretary Alexis Herman continued to play an active role in keeping both sides at the table before a new work week began. WASHINGTON — On a crucial day for the UPS talks, the Teamsters union and the company said yesterday there was movement at the bargaining table as they pursued an agreement to end the 14-day-old strike. UPS strike talks move slowly "There has been movement," Teamsters president Ron Carey said on NBC's "Meet the Press." United Parcel Service CEO James Kelly, appearing on the same program, said the fact that sides were continuing to talk was encouraging. The Associated Press But neither side suggested an agreement was a sure thing, and the union dampened enthusiasm further. Kelly said he was surprised when Carey called on local union leaders Friday to spread their strike actions this week. Pressure high; no agreement on issues yet He declined to predict when a deal might be reached but indicated the latest round of mediation — which he had not participated in — had been more productive than earlier sessions in which he participated. our strategy ... is the right way to go," Carey said on NBC. "We're not going to permit an employer to shove a contract down the throats of our members." For the Teams, the sticking points have been the company's unwillingness to commit to more full-time positions, limits on subcontracting and increased wages. "No agreement has been made on any area of the contract, and it is unclear if any progress will be made," the union said. AFL-CIO president John Sweeney, appearing on CBS "Face the Nation," called the Teamsters strike very popular because workers all across the country identify with these issues." But after four days of talks in a hotel near the Labor Department, Herman planned to fly to Anaheim, Calif., this morning to address an American Federation of Government Employees conference. pened during negotiations until very recently." Kelly said. The company wants out of the Teamsters' multi-employer pension and health plans. "Unfortunately, not much hap- "There are two or three issues that have been discussed a lot, but this negotiation is about dozens of issues that are still unresolved," Kelly said. Former Labor Secretary Robert Reich said the UPS strike could be the first in a series of standoffs between workers and highly profitable companies. Carey said the fact that the company was discussing alternatives at the table showed the union was right to dismiss UPS' demand on what it called its last, best and final offer be put to a membership vote. On a normal business day, the company delivers 12 million letters and packages. The strike is costing UPS up to $300 million weekly, and the Teamsters owe picketers $10 million in strike benefits. The strike of 185,000 workers has greatly inconvenienced small businesses that use UPS like their own shipping departments. The government said it lacked the legal authority to intervene, and the Clinton administration was relying on Herman to keep the parties talking. Earlier rounds of mediation ended inconclusively. In addition to the mounting financial costs of the strike to the union, the company and the workers, Herman's continued participation elevated the talks in the public eye and kept up the pressure for a resolution. "There has been some movement, so it's pretty clear that our position, "What's happening here — and it's happening in a lot of other companies as well — we have now very high corporate profits," Reich said on "Fox News Sunday." "We also have very tight labor markets and we have a long expansion in which many blue collar workers have not seen their pay and benefits go up, and this is an incendial combination." "We're not going to permit an employer to shove a contract down the throats of our members" Ron Carey Teamsters president Public meeting to analyze ValuJet crash The Associated Press WASHINGTON — A year after the ValuJet crash in the Florida Everglades and nine years after it was first recommended, not one plane with a sealed cargo hold has been fitted with a fire detector and extinguisher, a top safety official said yesterday. "Had that recommendation been implemented, it's only questionable whether the ValuJet accident would have happened at all," said Jim Hall, chairman of the National Transportation Safety Board, on NBC's "Meet the Press." Tomorrow the question of what happened and who was to blame for the May 11, 1996 crash of ValuJet Flight 592 will be the subject of a public NTSB meeting. The agency's report will analyze the accident and will assign a probable cause. But that's far from enough to those who lost loved ones, such as Deborah Landrum of Plano, Texas. She considers the FAA criminally negligent in the crash that killed her sister. While details of the report are not yet known, the crash has had a marked effect on the Federal Aviation Administration and the industry it regulates. Since the crash: The FAA added hundreds of new inspectors, and teams began placing special scrutiny on startup airlines. The top leaders of the Transportation Department and the FAA have been replaced. New rules banned dangerous oxygen generators from airplane cargo holds. Other rules that have not yet taken effect would require fire detectors and extinguishers in the holds of all airplanes, which Hall said the NTSB first recommended in 1988. name and is struggling to rebuild its business. Airline safety data became available via the Internet. "The FAA has messed up," Landrud said. 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