 `` We 're strongly recommending that anyone who has eaten in the cafeteria this month have the shot , '' Mr. Mattausch added , `` and that means virtually everyone who works here . 
 I was appalled to read the misstatements of facts in your Oct. 13 editorial `` Colombia 's Brave Publisher . '' 
 It is the right-wing guerrillas who are aligned with the drug traffickers , not the left wing . 
 This information was gleaned from your own news stories on the region . 
 Past Colombian government tolerance of the `` narcotraficantes '' was due to the drug lords ' history of wiping out leftists in the hinterlands . 
 Mary Poulin Palo Alto , Calif . 
 I suggest that The Wall Street Journal -LRB- as well as other U.S. news publications of like mind -RRB- should put its money where its mouth is : Lend computer equipment to replace that damaged at El Espectador , buy ad space , publish stories under the bylines of El Espectador journalists . 
 Perhaps an arrangement could be worked out to `` sponsor '' El Espectador journalists and staff by paying for added security in exchange for exclusive stories . 
 Reward El Espectador 's courage with real support . 
 Douglas B. Evans 
 COCA-COLA Co . -LRB- Atlanta -RRB- -- Anton Amon and George Gourlay were elected vice presidents of this soft-drink company . 
 Mr. Amon , 46 years old , is the company 's director of quality assurance ; most recently , he served as vice president , operations , for Coca-Cola Enterprises . 
 Mr. Gourlay , 48 , is manager for corporate manufacturing operations ; he was assistant vice president at the company . 
 In the wake of a slide in sterling , a tailspin in the stock market , and a string of problematic economic indicators , British Chancellor of the Exchequer Nigel Lawson promised gradual improvement in the U.K. economy . 
 In a speech prepared for delivery to London 's financial community , Mr. Lawson summed up current economic policy as a battle to wring inflation out of the British economy , using high interest rates as `` the essential instrument '' to carry out the campaign . 
 Two weeks after boosting base rates to 15 % , he pledged that `` rates will have to remain high for some time to come . '' 
 Mr. Lawson also made it clear that he would be watching exchange rates carefully . 
 A sinking pound makes imports more expensive and increases businesses ' expectations of future inflation , he argued . 
 In an apparent warning to currency traders who have lately been selling the British currency , he stated that the exchange rates will have a `` major role in the assessment of monetary conditions . '' 
 In reaffirming the current monetary policy of using high interest rates to fight inflation and shore up the pound , Mr. Lawson dismissed other approaches to managing the economy . 
 He said he monitors the money-supply figures , but does n't give them paramount importance , as some private and government economists have suggested . 
 Mr. Lawson also dismissed the possibility of imposing direct credit controls on Britain 's financial system . 
 Mr. Lawson 's speech , delivered at the Lord Mayor of London 's annual dinner at Mansion House , came on the heels of a grueling period for the U.K. economy . 
 Two weeks ago , in a campaign to blunt inflation at home and arrest a world-wide plunge in the pound , he raised base rates a full percentage point to 15 % . 
 Despite the increase , the British currency slid below a perceived threshold of three marks early last week . 
 It was quoted at 2.9428 marks in late New York trading Wednesday . 
 Leading up to the speech was a drumroll of economic statistics suggesting that the British war on inflation will be more bruising than previously assumed . 
 Unemployment in September dropped to 1,695,000 , the lowest level since 1980 . 
 While lower joblessness is generally good news , the hefty drop last month indicates that the economy is n't slowing down as much as hoped -- despite a doubling of interest rates over the last 16 months . 
 Meanwhile , average earnings in Britain were up 8.75 % in August over the previous year . 
 Another inflationary sign came in a surge in building-society lending to a record # 10.2 billion -LRB- $ 16.22 billion -RRB- last month , a much higher level than economists had predicted . 
 In a separate speech prepared for delivery at the dinner , Robin Leigh-Pemberton , Bank of England governor , conceded that `` demand pressures were even more buoyant than had been appreciated '' when the British economy was heating up last year . 
 He added that `` there 's no quick-fix solution '' to the economic woes , and said `` tight monetary policy is the right approach . '' 
 Discussing the recent slide in stock prices , the central bank governor stated that `` the markets now appear to have steadied '' after the `` nasty jolt '' of the 190.58-point plunge in the Dow Jones Industrial Average a week ago . 
 Although the New York market plunge prompted a 70.5-point drop in the London Financial Times-Stock Exchange 100 Share Index , Mr. Leigh-Pemberton declared `` that the experience owed nothing to the particular problems of the British economy . '' 
 Specifically , he pointed out that compared with the U.S. market , the U.K. has far fewer highly leveraged junk-bond financings . 
 Discussing future monetary arrangements , Mr. Lawson repeated the Thatcher government 's commitment to join the exchange rate mechanism of the European Monetary System , but he did n't indicate when . 
 C. Olivetti & Co. , claiming it has won the race in Europe to introduce computers based on a powerful new microprocessor chip , unveiled its CP486 computer yesterday . 
 The product is the first from a European company based on Intel Corp. 's new 32-bit 486tm microprocessor , which works several times faster than previously available chips . 
 Hewlett-Packard Co. became the first company world-wide to announce a product based on the chip earlier this month , but it wo n't start shipping the computers until early next year . 
 An Olivetti spokesman said the company 's factories are already beginning to produce the machine , and that it should be available in Europe by December . 
 `` What this means is that Europeans will have these machines in their offices before Americans do , '' the spokesman said . 
 The new chip `` is a very big step in computing , and it is important that Olivetti be one of the first out on the market with this product , '' said Patricia Meagher Davis , an analyst at James Capel & Co. in London . 
 Executives at Olivetti , whose earnings have been steadily sliding over the past couple of years , have acknowledged that in the past they have lagged at getting new technology to market . 
 Ms. Davis said the new machines could steal some sales away from Olivetti 's own minicomputers , but would bring new sales among professionals such as engineers , stockbrokers and medical doctors . 
 Although Olivetti 's profits tumbled 40 % in the first half of this year , she believes Olivetti 's restructuring last fall and its introduction of new products will begin to bear fruit with an earnings rebound next year , especially if it can fulfill its promise to deliver the new machines by December . 
 `` We think the worst is over '' in the European information-technology market , she said . 
 Depending on the type of software and peripherals used , the machines can serve either as the main computer in a network of many terminals -LRB- a role usually filled by a minicomputer -RRB- , as a technical workstation or as a very fast personal computer . 
 `` It 's the missing link '' in Olivetti 's product line between small personal computers and higher-priced minicomputers , the Olivetti spokesman said . 
 He added that Olivetti will continue making its LSX minicomputer line . 
 The machines will cost around $ 16,250 on average in Europe . 
 The Intel 486 chip can process 15 million instructions per second , or MIPS , while Intel 's previous 386 chip could handle only 3 to 6 MIPS . 
 Olivetti also plans to sell the CP486 computer in the U.S. starting next year through Olivetti USA and through its Ramo unit , which specializes in automating bank-branch networks . 
 Viatech Inc. said it received approval from the French government for its proposed $ 44.7 million acquisition of Ferembal S.A . 
 The approval satisfies the remaining conditions of the purchase , which is expected to close within two weeks . 
 erembal , the second-largest maker of food cans in France , had 1988 sales of $ 150 million . 
 Ferembal has 930 workers at four canning manufacturing plants and one plastic container facility . 
 Viatech makes flexible packaging films and machinery , and materials for the food and pharmaceutical industries . 
 Social Security benefits will rise 4.7 % next year to keep pace with inflation , boosting the average monthly benefit to $ 566 from $ 541 , the Department of Health and Human Services announced . 
 The higher payments will start with Social Security checks received on Jan. 3 , 1990 . 
 Supplemental Security Income payments to the disabled also will rise 4.7 % , starting with checks received on Dec. 29 , 1988 , increasing the maximum SSI payment to $ 386 from $ 368 a month . 
 The inflation adjustment also means that the maximum annual level of earnings subject to the wage tax that generates revenue for the Social Security trust fund will rise to $ 50,400 in 1990 from $ 48,000 this year . 
 As mandated by law , the tax rate will rise to 7.65 % in 1990 from 7.51 % and wo n't rise any further in the future . 
 This means that the maximum yearly Social Security tax paid by workers and employers each will rise $ 250.80 next year to $ 3,855.60 . 
 Beneficiaries aged 65 through 69 will be able to earn $ 9,360 without losing any Social Security benefits in 1990 , up from $ 8,880 this year . 
 The exempt amount for beneficiaries under 65 will rise to $ 6,840 from $ 6,480 . 
 The adjustments reflect the increase in the consumer price index for urban wage earners and clerical workers from the third quarter of last year to the third quarter of this year . 
 Health-care companies should get healthier in the third quarter . 
 Medical-supply houses are expected to report earnings increases of about 15 % on average for the third quarter , despite sales increases of less than 10 % , analysts say . 
 To offset sluggish sales growth , companies have been cutting staff , mostly through attrition , and slowing the growth in research and development spending . 
 Sales growth in the quarter was slowed by mounting pressure from groups of buyers , such as hospitals , to hold down prices . 
 Suppliers were also hurt by the stronger U.S. dollar , which makes sales abroad more difficult . 
 In some cases , competition has squeezed margins . 
 Becton , Dickinson & Co. , for example , faces stiff competition from a Japanese supplier in the important syringe market . 
 The Franklin Lakes , N.J. , company is expected to report sales growth of only 5 % to 6 % , but should still maintain earnings growth of 10 % , says Jerry E. Fuller , an analyst with Duff & Phelps Inc . 
 Among the first of the group to post results , Abbott Laboratories said third-quarter net income jumped 14 % to $ 196 million , or 88 cents a share , from $ 172 million , or 76 cents a share , a year earlier . 
 Sales for the company , based in Abbott Park , Ill. , rose 8.3 % to $ 1.31 billion from $ 1.21 billion . 
 Baxter International Inc. yesterday reported net climbed 20 % in the third period to $ 102 million , or 34 cents a share , from $ 85 million , or 28 cents a share , a year earlier . 
 Sales for the Deerfield , Ill. , company rose 5.8 % to $ 1.81 billion from $ 1.71 billion . 
 But not every company expects to report increased earnings . 
 C.R. Bard Inc. yesterday said third-quarter net plunged 51 % to $ 9.9 million , or 18 cents a share , from $ 20 million , or 35 cents a share , a year earlier . 
 Sales fell 1.2 % to $ 190.1 million from $ 192.5 million . 
 The Murray Hill , N.J. , company said full-year earnings may be off 33 cents a share because the company removed a catheter from the market . 
 In 1988 , the company earned $ 1.38 a share . 
 The Food and Drug Administration had raised questions about the device 's design . 
 Some analysts add that third-party pressures to reduce health costs will continue to bedevil companies ' bottom lines . 
 Takeover speculation , which has been buoying stocks of supply houses , may also ease , says Peter Sidoti , an analyst with Drexel Burnham Lambert Inc . 
 `` As that wanes , you 're going to see the stocks probably wane as well , '' he says . 
 Hospitals companies , meanwhile , are reporting improved earnings . 
 Bolstered by strong performances by its psychiatric hospitals , National Medical Enterprises Inc. , Los Angeles , reported net income of $ 50 million , or 65 cents a share , for the first quarter ended Aug. 31 , up from $ 41 million , or 56 cents a share , a year earlier . 
 Humana Inc. , Louisville , Ky. , also reported favorable results , with net income of $ 66.7 million , or 66 cents , in the fourth quarter ended Aug. 31 , up from $ 58.2 million , or 59 cents , a year earlier . 
 Analysts say the handful of hospital companies that are still publicly traded are benefiting from several trends . 
 Most important , hospital admission rates are stabilizing after several years of decline . 
 Moreover , companies have sold off many of their smaller , less-profitable hospitals and have completed painful restructurings . 
 Humana 's revenues , for example , are being boosted by large increases in enrollments in the company 's health maintenance organizations . 
 Says Todd Richter , an analyst with Dean Witter Reynolds : `` The shakeout in the publicly traded companies is over . 
 Initial claims for regular state unemployment benefits rose to a seasonally adjusted 396,000 during the week ended Oct. 7 from 334,000 the previous week , the Labor Department said . 
 The number of people receiving regular state benefits in the week ended Sept. 30 decreased to a seasonally adjusted 2,202,000 , or 2.2 % of those covered by unemployment insurance , from 2,205,000 the previous week , when the insured unemployment rate also was 2.2 % . 
 Counting all state and federal benefit programs , the number of people receiving unemployment benefits in the week ended Sept. 30 fell to 1,809,300 from 1,838,200 a week earlier . 
 These figures are n't seasonally adjusted . 
 A Labor Department spokesman said the unusually high number of initial claims for state unemployment benefits reflects the impact of Hurricane Hugo on southern states , particularly North Carolina and South Carolina . 
 The figure also may reflect initial claims filed by striking Nynex Corp. workers who have become eligible for unemployment benefits , the official said . 
 Digital Equipment Corp. reported a 32 % decline in net income on a modest revenue gain in its fiscal first quarter , causing some analysts to predict weaker results ahead than they had expected . 
 Although the second-largest computer maker had prepared Wall Street for a poor quarter , analysts said they were troubled by signs of flat U.S. orders and a slowdown in the rate of gain in foreign orders . 
 The Maynard , Mass. , company is in a transition in which it is trying to reduce its reliance on mid-range machines and establish a presence in workstations and mainframes . 
 Net for the quarter ended Sept. 30 fell to $ 150.8 million , or $ 1.20 a share , from $ 223 million , or $ 1.71 a share , a year ago . 
 Revenue rose 6.4 % to $ 3.13 billion from $ 2.94 billion . 
 Digital said a shift in its product mix toward low-end products and strong growth in workstation sales yielded lower gross margins . 
 A spokesman also said margins for the company 's service business narrowed somewhat because of heavy investments made in that sector . 
 The lack of a strong product at the high end of Digital 's line was a significant drag on sales . 
 Digital hopes to address that with the debut of its first mainframe-class computers next Tuesday . 
 The new line is aimed directly at International Business Machines Corp . 
 `` Until the new mainframe products kick in , there wo n't be a lot of revenue contribution at the high end , and that 's hurt us , '' said Mark Steinkrauss , Digital 's director of investor relations . 
 He said unfavorable currency translations were also a factor in the quarter . 
 DEC shares rose $ 1.375 to $ 89.75 apiece in consolidated New York Stock Exchange trading yesterday . 
 But analysts said that against the backdrop of a nearly 40-point rise in the Dow Jones Industrial Average , that should n't necessarily be taken as a sign of great strength . 
 Some cut their earnings estimates for the stock this year and predicted more efforts to control costs ahead . 
 `` I think the next few quarters will be difficult , '' said Steven Milunovich of First Boston . 
 `` Margins will remain under pressure , and when the new mainframe does ship , I 'm not sure it will be a big winner . 
 '' Mr. Milunovich said he was revising his estimate for DEC 's current year from $ 8.20 a share to `` well below $ 8 , '' although he has n't settled on a final number . 
 One troubling aspect of DEC 's results , analysts said , was its performance in Europe . 
 DEC said its overseas business , which now accounts for more than half of sales , improved in the quarter . 
 It even took the unusually frank step of telling analysts in a morning conference call that orders in Europe were up in `` double digits '' in foreign-currency terms . 
 That gain probably translated into about 5 % to 7 % in dollar terms , well below recent quarters ' gains of above 20 % , reckons Jay Stevens of Dean Witter Reynolds . 
 `` That was a disappointment '' and a sign of overall computer-market softness in Europe , Mr. Stevens said . 
 Marc Schulman , with UBS Securities in New York , dropped his estimate of DEC 's full-year net to $ 6.80 a share from $ 8 . 
 Although overall revenues were stronger , Mr. Schulman said , DEC `` drew down its European backlog '' and had flat world-wide orders overall . 
 `` The bottom line is that it 's more hand to mouth than it has been before , '' he said . 
 Mr. Schulman said he believes that the roll-out of DEC 's new mainframe will `` occur somewhat more leisurely '' than many of his investment colleagues expect . 
 He said current expectations are for an entry level machine to be shipped in December , with all of the more sophisticated versions out by June . 
 For reasons he would n't elaborate on , he said he 's sure that schedule wo n't be met , meaning less profit impact from the product for DEC in the next few quarters . 
 John R. Wilke contributed to this article . 
 Colgate Palmolive Co. reported third-quarter net income rose 27 % , bolstered by strong sales in its Latin American business and surprisingly healthy profits from U.S. operations . 
 Colgate said net income for the quarter rose to $ 76.7 million , or $ 1.06 a share , on sales that increased 6 % to $ 1.3 billion . 
 In the year-earlier period , Colgate posted net income of $ 60.2 million , or 88 cents a share . 
 Last year 's results included earnings from discontinued operations of $ 13.1 million , or 19 cents a share . 
 Reuben Mark , chairman and chief executive officer of Colgate , said earnings growth was fueled by strong sales in Latin America , the Far East and Europe . 
 Results were also bolstered by `` a very meaningful increase in operating profit at Colgate 's U.S. business , '' he said . 
 Operating profit at Colgate 's U.S. household products and personal care businesses , which include such well-known brands as Colgate toothpaste and Fab laundry detergent , jumped more than 40 % , the company said . 
 Mr. Mark attributed the improvement to cost savings achieved by consolidating manufacturing operations , blending together two sales organizations and more carefully focusing the company 's promotional activities . 
 `` We 've done a lot to improve -LRB- U.S . -RRB- results and a lot more will be done , '' Mr. Mark said . 
 `` Improving profitability of U.S. operations is an extremely high priority in the company . '' 
 Colgate 's results were at the high end of the range of analysts ' forecasts . 
 The scope of the improvement in the U.S. business caught some analysts by surprise . 
 The company 's domestic business , especially its household products division , has performed poorly for years . 
 Analysts say the earnings improvement came from cutting costs rather than increasing sales . 
 For the nine months , net increased 14 % to $ 217.5 million , or $ 3.09 a share . 
 Sales rose 7 % to $ 3.8 billion . 
 The company earned $ 191.1 million , or $ 2.79 a share , in the year-earlier period . 
 Colgate 's 1988 net income included $ 40.1 million , or 59 cents a share , from discontinued operations . 
 Colgate sold its hospital supply and home health care business last year . 
 Separately , Colgate Wednesday finalized an agreement with MacroChem Corp. , a tiny dental products and pharmaceutical concern based in Billerica , Mass. , to market in the U.S. four of MacroChem 's FDA-approved dental products . 
 The products -- sealants and bonding materials used by dentists -- all contain fluoride that is released over time . 
 The move is part of a drive to increase Colgate 's business with dentists , a company spokeswoman said . 
 Terms of the agreement were n't given . 
 USACafes Limited Partnership said it completed the sale of its Bonanza restaurant franchise system to a subsidiary of Metromedia Co. for $ 71 million in cash . 
 USACafes , which is nearly half-owned by Sam and Charles Wyly of Dallas , said it will distribute proceeds from the sale to unit holders as a liquidating dividend as soon as possible . 
 The Bonanza franchise system , which generates about $ 600 million in sales annually , represented substantially all of the partnership 's assets . 
 The sale of the system has been challenged in a class-action suit on behalf of unit holders filed last week in a Delaware court , USACafes said . 
 The company said it believes the suit is without merit . 
 American Telephone & Telegraph Co. unveiled a sweetened pension and early-retirement program for management that it hopes will enable it to save $ 450 million in the next year . 
 AT&T also said net income rose 19 % in the third quarter . 
 AT&T said its amended pension program will nearly double to 34,000 the number of managers eligible to retire with immediate pension payments . 
 AT&T said that based on studies of other companies that have offered retirement plans , it expects about one-third of its eligible managers to retire under the new program . 
 AT&T said third-quarter net income grew , despite stiff competition in all of the company 's markets . 
 Net income rose to $ 699 million , or 65 cents a share , from the year-earlier $ 587 million or 55 cents a share . 
 Revenue edged up to $ 8.9 billion from $ 8.81 billion . 
 The latest period 's net was reduced $ 102 million , or nine cents a share , for a change in depreciation method and concurrent changes in estimates of depreciable lives and net salvage for certain telecommunications equipment . 
 The results roughly matched estimates of securities analysts , who were encouraged by AT&T increasing its operating margin to 13 % from 11 % a year ago , because of continued cost-cutting efforts . 
 Sales of long-distance services , an extremely competitive market , rose 6.4 % . 
 But the growth was partly offset by lower equipment sales and rentals and price cuts on some products . 
 Under the amended pension program , AT&T managers who have at least five years of service will have five years added to their age and length of service for pension purposes . 
 Managers who retire Dec. 30 will have an additional 15 % added to their monthly pension for as long as five years or age 65 , whichever comes earlier . 
 An AT&T spokeswoman said the company would likely replace about one-third of its managers who choose to retire with new employees . 
 Analysts hailed the sweetened pension package , which they said had been the subject of rumors for several months . 
 `` This tells you AT&T is serious about continuing to manage their cost structure and is committed to 20%-a-year earnings growth , '' said Jack Grubman , an analyst with PaineWebber Inc . 
 But other analysts expressed disappointment that the cost-cutting move wo n't result in even greater earnings growth . 
 `` This is a good move , but it only gets you to where people 's expectations already are , '' in terms of earnings growth , said Joel D. Gross , an analyst with Donaldson , Lufkin & Jenrette . 
 Mr. Gross said he had hoped that a cost savings of $ 450 million would result in even greater growth than the 20 % annual earnings increase AT&T has told analysts it expects in the future . 
 AT&T said the special retirement option will increase fourth-quarter expenses . 
 But the company said the amount ca n't be determined until it knows how many managers opt to retire . 
 AT&T said the expense increase will be largely offset by a gain from its previously announced plan to swap its holdings in Ing . C. Olivetti & Co. for shares in Cie . Industriali Riunite , an Italian holding company . 
 For the nine months , AT&T said net income was $ 1.99 billion , or $ 1.85 a share , up 19 % from $ 1.67 billion , or $ 1.56 a share . 
 Revenue gained 3.1 % to $ 26.81 billion from $ 26 billion . 
 In composite trading yesterday on the New York Stock Exchange , AT&T shares closed at $ 43.375 , up 87.5 cents . 
 When it comes to buying and selling shares , Westridge Capital Management Inc. takes a back seat to no one . 
 Every dollar 's worth of stock in the Los Angeles money manager 's portfolio is traded seven or eight times a year , the firm estimates . 
 That makes it the most active trader among all the nation 's investment advisers , according to Securities and Exchange Commission filings . 
 But wait a second . 
 Westridge Capital is an index fund -- the type of stolid long-term investor whose goal is to be nothing more than average . 
 Westridge Capital 's frenetic trading reflects the changes sweeping through the previously sleepy world of indexing . 
 Indexing for the most part has involved simply buying and then holding stocks in the correct mix to mirror a stock market barometer , such as Standard & Poor 's 500-stock index , and match its performance . 
 Institutional investors have poured $ 210 billion into stock and bond indexing as a cheap and easy form of investment management that promises to post average market returns . 
 These big investors have flocked to indexing because relatively few `` active '' stock pickers have been able to consistently match the returns of the S&P 500 or other bellwethers , much less beat it . 
 And the fees investors pay for indexing run a few pennies for each $ 100 of assets -- a fraction of the cost of active managers . 
 That 's because computers do most of the work , and low trading activity keeps a lid on commission costs . 
 But today , indexing is moving from a passive investment strategy to an increasingly active one . 
 Because index-fund managers are no longer satisfied with merely being average , they have developed `` enhanced '' indexing strategies that are intended to outperform the market as much as three percentage points . 
 `` Indexing has been the most single successful investment concept in the last decade , but the index money has been just sort of sitting there , '' says Seth M. Lynn , president of Axe Core Investors Inc. , an indexer based in Tarrytown , N.Y . 
 `` Now the interest is in what else can I do with that money . '' 
 Among the souped-up indexing strategies : Indexed portfolios can be built around thousands of stocks , or just a few dozen , rather than being restricted to the S&P 500 companies . 
 They can ignore the S&P 500 stocks altogether and focus on particular types of stocks , such as smaller companies , those paying high dividends or companies in a particular industry , state or country . 
 With today 's computer-driven program trading techniques , index funds can trade back and forth between stock-index futures and the actual stocks making up indexes such as the S&P 500 . 
 Futures and options also make it possible to build `` synthetic '' index funds that do n't actually own a single share of stock , but can produce returns that match or exceed the broad stock market . 
 One reason for these hybrids is that indexing 's rapid growth is slowing , particularly for those `` plain vanilla '' funds that mirror the 500 . 
 `` There is n't a boatload -LCB- of big investors -RCB- out there still waiting to get into indexing , '' says P. James Kartalia , vice president of ANB Investment Management Co. , Chicago , which offers both indexing and active management services . 
 After tripling in size in the past five years , index funds now hold about 20 % of the stock owned by pension funds . 
 A further problem is razor-thin profits . 
 Plain-vanilla funds have become so commonplace that fees they can charge have plunged to almost nothing , and in some cases are just that . 
 To land customers for their well-paying stock custodial business , big banks sometimes will throw in basic indexing services for free . 
 `` It 's like getting a free toaster when you open an account , '' says Axe Core 's Mr. Lynn . 
 As a result , indexers have been looking for ways to give investors something more than the average for their money . 
 And many have been successful , as in the case of the index fund operated by hyper-trader Westridge Capital . 
 Westridge Capital has used enhanced indexing techniques to beat the S&P 500 's returns by 2.5 to 3 percentage points over the past four years , with the same risk level as holding the S&P 500 stocks , according to James Carder , the firm 's president . 
 Strategies vary for Westridge Capital , which has $ 300 million under management . 
 The firm sometimes buys S&P 500 futures when they are selling at a discount to the actual stocks , and will switch back and forth between stocks and stock-index futures to take advantages of any momentary price discrepencies . 
 Mr. Carder also goes through periods when he buys stocks in conjunction with options to boost returns and protect against declines . 
 And in some months , he buys stock-index futures and not stocks at all . 
 `` By their nature , our trades are very short-term and are going to create high turnover , '' Mr. Carder adds . 
 `` The more turnover , the better for our clients . '' 
 Big indexer Bankers Trust Co. also uses futures in a strategy that on average has added one percentage point to its enhanced fund 's returns . 
 J. Thomas Allen , president of Pittsburgh-based Advanced Investment Management Inc. , agrees it 's a good idea to jump between the S&P 500 stocks and futures . 
 `` You 're buying the S&P , and you always want to hold the cheapest form of it , '' he says . 
 But some indexers make little or no use of futures , saying that these instruments present added risks for investors . 
 `` If the futures markets have a problem , then those products could have a problem , '' says John Zumbrunn , managing director of Prudential Insurance Co. of America 's Investment Index Technologies Inc. unit . 
 Prudential currently is seeking approval to offer a new fund offering a return equal to the S&P 500 index plus of a percentage point . 
 An added feature is that the slighty improved return would be guaranteed by Prudential . 
 There are many other strategies to bolster the returns of index funds . 
 They include : 
 LIMITED RISK FUNDS : These guarantee protection against stock market declines while still passing along most gains . 
 Here a fund may promise to pay back , say , $ 95 of every $ 100 invested for a year , even if the market goes much lower . 
 The fund could invest $ 87 for one year in Treasury bills yielding 8 % to return the guaranteed $ 95 . 
 That leaves $ 13 , which could be used to buy S&P 500 options that will nearly match any gain in the S&P index . 
 MANAGER REPLICATION FUNDS : Say a big investor is interested in growth stocks . 
 Instead of hiring one of the many active managers specializing in growth stocks , indexers can design a portfolio around the same stocks ; the portfolio will be maintained by computer , reducing both fees and , in theory , risk -LRB- because of the large number of stocks -RRB- . 
 `` We see a lot of interest in those kind of things , '' says Frank Salerno , a vice president of Bankers Trust . 
 `` People comfortable with the passive approach are using them for other strategies . '' 
 TILT FUNDS : This is an index fund with a bet . 
 Instead of replicating the S&P 500 or some other index exactly , some stocks are overweighted or underweighted in the portfolio . 
 One simple approach is to exclude S&P 500 companies considered bankruptcy candidates ; this can avoid weak sisters , but also can hurt when a company like Chrysler Corp. rebounds . 
 Another approach : An investor with $ 100 million might use $ 75 million to buy the S&P 500 index and spend the other $ 25 million on a favorite group of stocks . 
 SPECIALIZED FUNDS : Indexes can be constructed to serve social goals , such as eliminating the stocks of companies doing business in South Africa . 
 Other funds have been designed to concentrate on stocks in a geographic area in order to encourage local investment . 
 Pennsylvania State Employees Retirement System , for example , has about $ 130 million invested in a fund of 244 companies that are either Pennsylvania-based or have 25 % of their work forces in the state . 
 Short interest on the New York Stock Exchange declined for the second consecutive month , this time 4.2 % , while the American Stock Exchange reported its third consecutive record month of short interest . 
 The Big Board reported that short interest dropped to 523,920,214 shares as of Oct. 13 from 547,347,585 shares in mid-September . 
 Amex short interest climbed 3 % to 53,496,665 shares from 51,911,566 shares . 
 For the year-earlier month , the Big Board reported 461,539,056 shares , indicating a 13.5 % year-to-year rise , while the Amex reported 36,015,194 shares , a 48 % leap . 
 Amex short interest has been heading upward since mid-December , with increases in each month since then except at mid-July . 
 Traders who sell short borrow stock and sell it , betting that the stock 's price will decline and that they can buy the shares back later at a lower price for return to the lender . 
 Short interest is the number of shares that have n't yet been purchased for return to lenders . 
 Although a substantial short position reflects heavy speculation that a stock 's price will decline , some investors consider an increase in short interest bullish because the borrowed shares eventually must be bought back . 
 Fluctuation in short interest of certain stocks also may be caused partly by arbitraging . 
 The figures occasionally include incomplete transactions in restricted stock . 
 The level of negative sentiment measured by the Big Board short interest ratio slipped to 3.36 from last month 's 3.38 . 
 The ratio is the number of trading days , at the exchange 's average trading volume , that would be required to convert the total short interest position . 
 Some analysts suggest , however , that the ratio has weakened in value as an indicator because options and other products can be used to hedge short positions . 
 Varity Corp. led the Big Board list of largest short volumes with 12,822,563 shares . 
 Varity has proposed to acquire K-H Corp. , consisting of the auto parts division and some debt of Fruehauf Corp. , for $ 577.3 million of cash and securities . 
 Chemical Waste Management posted the biggest increase in short volume on the New York exchange , up 3,383,477 shares to 5,267,238 . 
 Bristol-Myers Squibb Co. , the entity formed from the recent acquisition of Squibb Corp. by Bristol-Myers Co. , logged the largest volume decline , 7,592,988 shares , to 12,017,724 . 
 Short interest in International Business Machines Corp. plunged to 1,425,035 shares from 2,387,226 shares a month earlier . 
 Also closely watched is Exxon Corp. , where short interest slid to 4,469,167 shares from 5,088,774 . 
 On a percentage basis , Germany Fund Inc. led the gainers , leaping to 67,972 shares from three shares . 
 TransCanada PipeLines Ltd. led the percentage decliners , dropping to 59 shares from 183,467 . 
 The Amex short interest volume leader again was Texas Air Corp. , rising to 3,820,634 shares from 3,363,949 . 
 Bolar Pharmaceutical Co. posted the largest volume increase , 552,302 shares , to 2,157,656 . 
 The company is under an investigation concerning procedures to gain Food and Drug Administration approval of generic drugs . 
 Bolar has denied any wrongdoing . 
 The largest volume drop -- down 445,645 shares to 141,903 -- came in shares represented by B.A.T Industries PLC 's American depositary receipts . 
 The company is facing a takeover proposal from the financier Sir James Goldsmith . 
 First Iberian Fund led the percentage increases , rising to 73,100 shares from 184 . 
 Nelson Holdings International Ltd. dropped the most on a percentage basis , to 1,000 shares from 255,923 . 
 The adjacent tables show the Big Board and Amex issues in which a short interest position of at least 100,000 shares existed as of mid-October or in which there was a short position change of at least 50,000 shares since mid-September . 
 Your Oct. 12 editorial `` Pitiful , Helpless Presidency ? '' correctly states that I was critical of the Bush administration 's failure to have any plan in place to respond in a timely fashion to the opportunities to oust Manuel Noriega presented by the attempted military coup on Oct. 3 . 
 You are absolutely wrong , however , in opining that this position is some kind of `` flip-flop , '' something newly arrived at as a result of reading the opinion polls . 
 My position is one founded on both the facts and the law . 
 Although you may have forgotten , public opinion about Gen. Noriega is where it is in large measure because of my investigation of his years of involvement in narcotics smuggling -LRB- and simultaneous work as a U.S. operative -RRB- . 
 The public made up its mind about Gen. Noriega largely as a result of the hearings I chaired in the Subcommittee on Terrorism and Narcotics of the Foreign Relations Committee on Feb. 8 , 9 , 10 and 11 , 1988 , and again on April 4 , 1988 . 
 It was during those hearings that the nation first learned the breadth and depth of Gen. Noriega 's criminality , and of his enduring relationships with a variety of U.S. government agencies . 
 Those hearings also highlighted how Gen. Noriega was able to use his relationships with these agencies to delay U.S. action against him , and to exploit the administration 's obsession with overthrowing the Sandinistas to protect his own drug-dealing . 
 As former Ambassador to Costa Rica Francis J. McNeil testified before the subcommittee , the Reagan administration knew that Gen. Noriega was involved with narcotics , but made a decision in the summer of 1986 `` to put Gen. Noriega on the shelf until Nicaragua was settled . '' 
 As the report issued by the subcommittee concluded , `` Our government did nothing regarding Gen. Noriega 's drug business and substantial criminal involvement because the first priority was the Contra war . 
 This decision resulted in at least some drugs entering the United States as a hidden cost of the war . '' 
 Unfortunately , this problem continued even after Gen. Noriega 's indictment . 
 Throughout 1988 and this year , I and others in Congress have pressed the U.S. to develop a plan for pushing this `` narcokleptocrat '' out of Panama . 
 Regrettably , two administrations in a row have been unwilling and unable to develop any plan , military or economic , for supporting the Panamanian people in their attempts to restore democracy . 
 Sen. John Kerry -LRB- D. , Mass . -RRB- 
 For Vietnamese , these are tricky , often treacherous , times . 
 After years of hesitation , economic and political reform was embraced at the end of 1986 , but ringing declarations have yet to be translated into much action . 
 Vietnam is finding that turning a stagnant socialist order into a dynamic free market does n't come easy . 
 Here is how three Vietnamese are coping with change : 
 The Tire King 
 Nguyen Van Chan is living proof that old ways die hard . 
 Mr. Chan used to be an oddity in Hanoi : a private entrepreneur . 
 His business success made him an official target in pre-reform days . 
 Mr. Chan , now 64 years old , invented a fountain pen he and his family produced from plastic waste . 
 Later , he marketed glue . 
 Both products were immensely popular . 
 For his troubles , Mr. Chan was jailed three times between 1960 and 1974 . 
 Though his operation was registered and used only scrap , he was accused of conducting illegal business and possessing illegal materials . 
 Once he was held for three months without being charged . 
 Things were supposed to change when Vietnam 's economic reforms gathered pace , and for awhile they did . 
 After years of experimenting , Mr. Chan produced a heavy-duty bicycle tire that outlasted its state-produced rival . 
 By 1982 , he was selling thousands of tires . 
 Newspapers published articles about him , and he was hailed as `` the tire king . '' 
 His efforts earned a gold medal at a national exhibition -- and attracted renewed attention from local authorities . 
 District police in 1983 descended on his suburban home , which he and his large family used as both residence and factory , and demanded proof the house and equipment were his . 
 He produced it . 
 `` That was the first time they lost and I won , '' he says . 
 He was further questioned to determine if he was `` a real working man or an exploiter . '' 
 Says Mr. Chan : `` When I showed it was from my own brain , they lost for the second time . '' 
 But a few days later the police accused him of stealing electricity , acquiring rubber without permission and buying stolen property . 
 Warned he was to be jailed again , he fled to the countryside . 
 His family was given three hours to leave before the house and contents were confiscated . 
 With only the clothes they were wearing , family members moved to a home owned by one of Mr. Chan 's sons . 
 After six months on the run , Mr. Chan learned the order for his arrest had been canceled . 
 He rejoined his family in January 1984 and began the long struggle for justice , pressing everyone from Hanoi municipal officials to National Assembly deputies for restoration of his rights . 
 He and his family kept afloat by repairing bicycles , selling fruit and doing odd jobs . 
 Mr. Chan achieved a breakthrough in 1987 -- and became a minor celebrity again -- when his story was published in a weekly newspaper . 
 In 1988 , 18 months after the sixth congress formally endorsed family-run private enterprise , district authorities allowed Mr. Chan to resume work . 
 By late last year he was invited back as `` the tire king '' to display his products at a national exhibition . 
 National leaders stopped by his stand to commend his achievements . 
 Mr. Chan now produces 1,000 bicycle and motorbike tires a month and 1,000 tins of tire-patching glue in the son 's small house . 
 Eighteen people pack the house 's two rooms -- the Chans , four of their 10 children with spouses , and eight of 22 grandchildren . 
 Most sleep on the floor . 
 Come daybreak , eight family members and two other workers unroll a sheet of raw rubber that covers the floor of the house and spills out onto the street . 
 The primitive operations also burst out the back door into a small courtyard , where an ancient press squeezes rubber solution into a flat strip and newly made tires are cooled in a bathtub filled with water . 
 Mr. Chan talks optimistically of expanding , maybe even moving into the import-export field . 
 First , however , he has unfinished business . 
 When district authorities allowed him to resume manufacturing , they released only one of his machines . 
 They did n't return the rubber stocks that represent his capital . 
 Nor did they return his house and contents , which he values at about $ 44,000 . 
 He wants to recover more than just his property , though . 
 `` I want my dignity back , '' he says . 
 Nguyen Ngoc seemed an obvious choice when the Vietnamese Writers Association was looking for a new editor to reform its weekly newspaper , Van Nghe . 
 After the sixth congress , journalists seized the opportunity provided by the liberalization to probe previously taboo subjects . 
 Mr. Ngoc , 57 years old , had solid reformist credentials : He had lost his official position in the association in he early 1980s because he questioned the intrusion of politics into literature . 
 Appointed editor in chief in July 1987 , Mr. Ngoc rapidly turned the staid Van Nghe into Vietnam 's hottest paper . 
 Circulation soared as the weekly went way beyond standard literary themes to cover Vietnamese society and its ills . 
 Readers were electrified by the paper 's audacity and appalled by the dark side of life it uncovered . 
 One article recounted a decade-long struggle by a wounded soldier to prove , officially , he was alive . 
 Another described how tax-collection officials in Thanh Hoa province one night stormed through homes and confiscated rice from starving villagers . 
 The newspaper also ran a series of controversial short stories by Nguyen Huy Thiep , a former history teacher , who stirred debate over his interpretation of Vietnamese culture and took a thinly veiled swipe at writers who had blocked his entry into their official association . 
 Van Nghe quickly made influential enemies . 
 `` Those who manage ideology and a large number of writers reacted badly '' to the restyled paper , says Lai Nguyen An , a literary critic . 
 After months of internal rumblings , Mr. Ngoc was fired last December . 
 His dismissal triggered a furor among intellectuals that continues today . 
 `` Under Mr. Ngoc , Van Nghe protected the people instead of the government , '' says Nguyen Duy , a poet who is the paper 's bureau chief for southern Vietnam . 
 `` The paper reflected the truth . 
 For the leadership , that was too painful to bear . '' 
 The ` Billionaire ' 
 Nguyen Thi Thi is Vietnam 's entrepreneur of the 1980s . 
 Her challenge is to keep her fledgling empire on top in the 1990s . 
 Mrs. Thi did n't wait for the reforms to get her start . 
 She charged ahead of the government and the law to establish Hochiminh City Food Co. as the biggest rice dealer in the country . 
 Her success , which included alleviating an urban food shortage in the early 1980s , helped persuade Hanoi to take the reform path . 
 Her story is becoming part of local folklore . 
 A lifelong revolutionary with little education who fought both the French and the U.S.-backed Saigon regime , she switched effortlessly to commerce after the war . 
 Her instincts were capitalistic , despite her background . 
 As she rode over regulations , only her friendship with party leaders , including Nguyen Van Linh , then Ho Chi Minh City party secretary , kept her out of jail . 
 Following Mr. Linh 's appointment as secretary-general of the party at the sixth congress , Mrs. Thi has become the darling of `` doi moi '' , the Vietnamese version of perestroika . 
 The authorities have steered foreign reporters to her office to see an example of `` the new way of thinking . '' 
 Foreign publications have responded with articles declaring her Vietnam 's richest woman . 
 `` Some people call me the communist billionaire , '' she has told visitors . 
 Actually , 67-year-old Mrs. Thi is about as poor as almost everyone else in this impoverished land . 
 She has indeed turned Hochiminh City Food into a budding conglomerate , but the company itself remains state-owned . 
 She manages it with the title of general-director . 
 The heart of the business is the purchase of rice and other commodities , such as corn and coffee , from farmers in the south , paying with fertilizer , farm tools and other items . 
 Last year , Hochiminh City Food says it bought two million metric tons of unhusked rice , more than 10 % of the country 's output . 
 The company operates a fleet of trucks and boats to transport the commodities to its warehouses . 
 A subsidiary company processes commodities into foods such as instant noodles that are sold with the rice through a vast retail network . 
 In recent years , Mrs. Thi has started to diversify the company , taking a 20 % stake in newly established , partly private Industrial and Commercial Bank , and setting up Saigon Petro , which owns and operates Vietnam 's first oil refinery . 
 Mrs. Thi says Hochiminh City Food last year increased pretax profit 60 % to the equivalent of about $ 2.7 million on sales of $ 150 million . 
 She expects both revenue and profit to gain this year . 
 She is almost cavalier about the possibility Vietnam 's reforms will create rivals on her home turf . 
 `` I do n't mind the competition inside the country , '' she says . 
 `` I am only afraid that with Vietnam 's poor-quality products we ca n't compete with neighboring countries . 
 The earthquake that hit the San Francisco Bay area is n't likely to result in wholesale downgrading of bond ratings , officials at the two major rating agencies said . 
 Standard & Poor 's Corp. is reviewing debt issued by 12 California counties , and `` there are potential isolated problems , '' said Hyman Grossman , a managing director . 
 The agency is preparing a report , to be issued today , on the earthquake 's impact on the and casualty-insurance industry . 
 The only securities so far to be singled out are those issued by Bay View Federal Savings & Loan . 
 Moody 's Investors Service Inc. said it is reviewing , with an eye toward a possible downgrade , the ratings on Bay View Federal bonds , long-term deposits and the preferred-stock rating of its parent company , Bay View Capital Corp . 
 As for property and casualty insurers , Moody 's said `` preliminary estimates suggest that losses should not have a significant impact on most insurers ' financial condition , '' but it `` raises concerns about potentially substantial risks '' longer-term . 
 `` Losses from the earthquake are expected to be of similar magnitude to those of Hurricane Hugo , '' according to Moody 's . 
 Your Oct. 5 editorial `` A Democratic Tax Cut '' contained an error . 
 In the third paragraph it referred to the senators seeking loophole suggestions from lobbyists for various sectors of the economy . 
 Among them , `` banana farmers . '' 
 The only significant commercial banana farmers in the U.S. are in Hawaii . 
 The Hawaii Banana Industry Association , to which nearly all of them belong , has no lobbyist . 
 Thomas V. Reese Sr . 
 Maui Banana Co . 
 Western Digital Corp. reported a net loss of $ 2.7 million , or nine cents a share , for its first quarter ended Sept. 30 , citing factors as varied as hurricane damage , an advance in graphics technology and the strengthening dollar . 
 In the year-ago period , the company earned $ 12.9 million , or 45 cents a share , on sales of $ 247 million . 
 Sales for the just-ended period fell to about $ 225 million , the maker of computer parts said . 
 Nonetheless , Chairman Roger W. Johnson said he expects the company to be profitable in the current quarter . 
 `` We are positioned to come through , '' he said , noting that the company 's backlog was up from the previous quarter . 
 In its second quarter last year , Western Digital earned $ 12.7 million , or 44 cents a share , on sales of $ 258.4 million . 
 Mr. Johnson said Western Digital 's plant in Puerto Rico was affected by Hurricane Hugo , losing three days ' production because of the storm , which wrecked much of the Caribbean island 's infrastructure . 
 Although the plant itself was n't damaged , Mr. Johnson said millions of dollars in first-quarter revenue were lost . 
 The revenue will be regained in the current period , he added . 
 There are no plans to initiate a common stock dividend , Mr. Johnson said , explaining that the board continues to believe shareholders are best served by reinvesting excess cash . 
 Mr. Johnson said the first-quarter loss also heavily reflected a rapid change in graphics technology that left reseller channels with too many of the old computer graphics boards and too few new monitors compatible with the new graphics boards . 
 Western Digital does n't make the monitors . 
 An accelerating move by personal computer manufacturers ' to include advanced graphics capabilities as standard equipment further dampened reseller purchases of Western Digital 's equipment . 
 `` The other areas of the business -- storage and microcomputers -- were very good , '' Mr. Johnson said . 
 He said Western Digital has reacted swiftly to the movement to video graphics array , VGA , graphics technology from the old enhanced graphics adapter , EGA , which has a lower resolution standard , technology and now is one of the leading producers of these newer units . 
 Other makers of video controller equipment also were caught in the EGA-VGA shift , he said , `` but we were able to respond much more quickly . '' 
 Still , Mr. Johnson said , `` our stock is grossly undervalued . '' 
 He said the company has cut operating expenses by about 10 % over the last few quarters , while maintaining research and development at about 8 % to 9 % of sales . 
 As part of its reorganization this week , Western Digital has divided its business into two segments -- storage products , including controllers and disk drives ; and microcomputer products , which include graphics , communications and peripheral control chips . 
 Graphics , communications and peripheral control chips were combined because , increasingly , multiple functions are being governed by a single chip . 
 Storage , which includes computer controllers and 3.5-inch disk drives , represents nearly two-thirds of the company 's business . 
 Disk drives , which allow a computer to access its memory , generated 38 % more revenue in the most recent period compared with the fiscal first quarter a year earlier . 
 Computer parts are getting ever smaller , Mr. Johnson said , a shrinking that has propelled laptops into position as the fastest-growing segment of the computer business . 
 As smaller and more powerful computers continue to be the focus of the industry , he said , Western Digital is strengthening development of laptop parts . 
 Next year Western Digital plans to consolidate its operations from 11 buildings in Irvine into two buildings in the same citya new headquarters and , a block away , a modern $ 100 million silicon wafer fabrication plant . 
 The plan will help the company in its existing joint manufacturing agreement with AT&T . 
 About half of Western Digital 's business is overseas , and Mr. Johnson expects that proportion to continue . 
 Plans to dissolve many of the trade barriers within Europe in 1992 creates significant opportunities for the company , he said , particularly since Western Digital already manufactures there . 
 Capitalizing on that presence , Western Digital is launching a major effort to develop the embryonic reseller market in Europe . 
 Directors of state-owned Banca Nazionale del Lavoro approved a two-step capital-boosting transaction and a change in the bank 's rules that will help it operate more like a private-sector institution . 
 Until now , BNL 's top managers and its directors have been appointed by a Treasury decree . 
 But under the bank 's proposed statutes , an assembly of shareholders must approve board members . 
 The bank 's chairman and director general , who also sit on the board , still would be appointed by the Treasury . 
 BNL , which is controlled by the Italian Treasury , was rocked by the disclosure last month that its Atlanta branch extended more than $ 3 billion in unauthorized credits to Iraq . 
 The ensuing scandal , in which the bank 's management resigned , has helped renew calls for privatization , or at least an overhaul , of Italy 's banking system , which is about 80 % state-controlled . 
 In a related move , the bank also proposed that board representation be linked more closely to the bank 's new shareholding structure . 
 BNL called a shareholders ' assembly meeting in December to vote on the proposals . 
 BNL has about 75,000 nonvoting shares that are listed on the Milan Stock Exchange . 
 The shares were suspended from trading following disclosure of the Atlanta scandal ; Consob , the stock exchange regulatory body , reportedly will decide soon whether to end the trading suspension . 
 Switzerland 's wholesale price index increased 0.3 % in September from August , and was up 3.9 % from a year ago , marking the first time this year that the index has fallen below 4 % on a year-to-year basis , the government reported . 
 The government attributed the 0.3 % month-to-month rise in the index largely to higher energy prices . 
 In August , the index was up 0.2 % from the previous month , and was up 4.5 % on a year-to-year basis . 
 The wholesale price index , based on 1963 as 100 , was 180.9 in September . 
 American Express Co. posted a 21 % increase in third quarter net income despite a sharp rise in reserves for Third World loans at its banking unit . 
 Aided by a sharp gain in its travel business , American Express said net rose to $ 331.8 million , or 77 cents a share , from $ 273.9 million , or 64 cents a share . 
 The year-earlier figures included $ 9.9 million , or three cents a share , in income from discontinued operations . 
 Income from continuing operations was up 26 % . 
 Revenue rose 24 % to $ 6.5 billion from $ 5.23 billion . 
 The travel , investment services , insurance and banking concern added $ 110 million to reserves for credit losses at its American Express Bank unit , boosting the reserve to $ 507 million as of Sept. 30 . 
 The bank 's Third World debt portfolio totals $ 560 million , down from $ 2.2 billion at the end of 1986 . 
 The bank charged off $ 53 million in loans during the quarter . 
 At the American Express Travel Related Services Co. unit , net rose 17 % to a record $ 240.8 million on a 19 % revenue increase . 
 The figures exclude businesses now organized as American Express Information Services Co . 
 American Express card charge volume rose 12 % . 
 Travel sales rose 11 % , led by gains in the U.S . 
 At IDS Financial Services , the financial planning and mutual fund unit , net rose 19 % to a record $ 47.6 million on a 33 % revenue gain . 
 Assets owned or managed rose 20 % to $ 45 billion , and mutual fund sales rose 45 % in the quarter to $ 923 million . 
 American Express Bank earnings fell 50 % to $ 21.3 million from $ 42.5 million despite a 29 % revenue gain . 
 The results include $ 106 million of tax benefits associated with previous years ' Third World loan activity , compared with $ 15 million a year earlier . 
 Profit rose 38 % at American Express Information Services to $ 21.6 million . 
 Shearson Lehman Hutton Holdings Inc. , as previously reported , had net of $ 65.9 million , reversing a $ 3.5 million loss a year earlier ; its latest results include a $ 37 million gain from the sale of an institutional money management business . 
 American Express 's share of Shearson 's earnings was $ 41 million , after preferred stock dividends ; it owns about 68 % of Shearson 's common . 
 For the nine months , American Express said net rose 11 % to $ 899.8 million , or $ 2.09 a share , from $ 807.5 million , or $ 1.89 a share . 
 Revenue rose 24 % to $ 18.73 billion from $ 15.09 billion . 
 Textron Inc. , hampered by a slowdown in its defense sales , reported an 8 % decline in per-share earnings on nearly flat revenue for its third quarter . 
 The aerospace and financial services concern said net income fell 5 % to $ 59.5 million from $ 62.8 million . 
 Revenue of $ 1.73 billion was almost unchanged from last year 's $ 1.72 billion . 
 Per-share net of 66 cents , down from 72 cents , fell by more than overall net because of more shares outstanding . 
 The company said that improved results in its financial-services sector were negated by increased costs in its government contract business , lower operating earnings in its commercial-products sector and soft automotive markets . 
 Net was aided by a lower income tax rate . 
 Profit before taxes fell 17 % to $ 84.4 million from $ 101.4 million . 
 For the nine months , Textron reported net of $ 182.1 million , or $ 2.06 a share , on revenue of $ 5.41 billion . 
 A year ago , net was $ 170.4 million , or $ 1.93 a share , on revenue of $ 5.3 billion . 
 The nine-month results included a $ 9.5 million special charge in 1989 for an arbitration settlement related to past export sales , and $ 29.7 million in extraordinary charges in 1988 related to a former line of business and early redemption of debt . 
 Textron said that nine-months ' results do n't include earnings of Avdel PLC , a British maker of industrial fasteners , but do include interest costs of $ 16.4 million on borrowings related to the proposed purchase of Avdel . 
 A federal judge has issued a preliminary injunction against the purchase because of Federal Trade Commission concerns that the transaction would reduce competition in the production of two kinds of rivets . 
 For the quarter , Textron said aerospace revenue , including Bell helicopter and jet-engine manufacture , declined 9.8 % to $ 755.9 million from $ 838.3 million , an indication of slowing government defense work . 
 As the Hunt brothers ' personal bankruptcy cases sputter into their second year , Minpeco S.A. has proposed a deal to settle its huge claim against the troubled Texas oil men . 
 But the plan only threatens to heighten the tension and confusion already surrounding the cases that were filed in September 1988 . 
 The Peruvian mineral concern 's $ 251 million claim stems from 1988 jury award in a case stemming from the brothers ' alleged attempts to corner the 1979-80 silver market . 
 Minpeco now says it is willing to settle for up to $ 65.7 million from each brother , although the actual amount would probably be much less . 
 Although the proposal must be approved by federal Judge Harold C. Abramson , W. Herbert Hunt has agreed to the Peruvian mineral concern 's proposal . 
 Nelson Bunker Hunt is considering it , although his attorney says he wo n't do it if the proposal jeopardizes a tentative settlement he has reached with the Internal Revenue Service , which claims the brothers owe $ 1 billion in back taxes and is by far the biggest creditor in both cases . 
 The tentative agreement between the IRS and Nelson Bunker Hunt is awaiting U.S. Justice Department approval . 
 Under it , the former billionaire 's assets would be liquidated with the IRS getting 80 % of the proceeds and the rest being divided among other creditors , including Minpeco and Manufacturers Hanover Trust Co. , which is seeking repayment of a $ 36 million loan . 
 A similiar proposal has been made in the W. Herbert Hunt case although he and the IRS are at odds over the size of the non-dischargable debt he would have to pay to the government from future earnings . 
 In both cases , Minpeco and Manufacturers Hanover have been fighting ferociously over their shares of the pie . 
 With support from the IRS , Manufacturers Hanover has filed suit asking Judge Abramson to subordinate Minpeco 's claim to those of Manufacturer Hanover and the IRS . 
 Minpeco has threatened a `` volcano '' of litigation if the Manufacturers Hanover Corp. unit attempts to force such a plan through the court . 
 Minpeco said it would n't pursue such litigation if its settlement plan in the W. Herbert Hunt case is approved by Judge Abramson , who will consider the proposal at a hearing next week . 
 Minpeco attorney Thomas Gorman decribed the plan as one step toward an overall settlement of the W. Herbert Hunt case but Hugh Ray , attorney for Manufacturers Hanover , called it `` silly '' and said he would fight it in court . 
 `` The thing is so fluid right now that there 's really no way to say what will happen , '' says Justice Department attorney Grover Hartt III , who represents the IRS in the case . 
 `` Developments like this are hard to predict . 
 Banc One Corp. said it agreed in principle to buy five branch offices from Trustcorp Inc. , Toledo , Ohio , following the planned merger of Trustcorp into Society Corp. , Cleveland . 
 The five offices in Erie and Ottawa counties in northern Ohio have total assets of about $ 88 million , Banc One said . 
 The purchase price will be established after Banc One has an opportunity to study the quality of the assets , Banc One said . 
 Society Corp. already has branches in the area , and selling the Trustcorp offices could avoid a problem with regulators over excessive concentration of banking in the two counties after the merger of Trustcorp into Society , according to industry sources . 
 The merger is scheduled to take place in the 1990 first quarter . 
 Stock-market fears and relatively more attractive interest rates pushed money-market mutual fund assets up $ 6.07 billion in the latest week , the sharpest increase in almost two years . 
 The 473 funds tracked by the Investment Company Institute , a Washington-based trade group , rose to $ 356.1 billion , a record . 
 The $ 6.07 billion increase was the strongest weekly inflow since January 1988 . 
 The increase was spread fairly evenly among all three types of funds . 
 Individual investors , represented in the general-purpose and broker-dealer fund categories , pulled money from the stock market after its big drop last Friday and put the money into funds , said Jacob Dreyer , vice president and chief economist of the Institute . 
 `` Insitutional investors , on the other hand , reacted to the steep decline in yields on direct money-market instruments following the stock-market decline last Friday , '' Mr. Dreyer said . 
 Yields on money funds dropped in the week ended Tuesday , according to Donoghue 's Money Fund Report , a Holliston , Mass. , newsletter . 
 The average seven-day compounded yield fell to 8.55 % from 8.60 % the week earlier , Donoghue 's said . 
 At the auction of six-month U.S. Treasury bills on Monday , the average yield fell to 7.61 % from 7.82 % . 
 Likewise , certificates of deposit on average posted lower yields in the week ended Tuesday . 
 The 142 institutional-type money funds rose $ 2.23 billion to $ 85.49 billion . 
 The 235 general-purpose funds increased $ 2.53 billion to $ 116.56 billion , while 96 broker-dealer funds increased $ 1.3 billion to $ 154.05 billion . 
 Domestic lending for real estate and property development was the source of Bank Bumiputra Malaysia Bhd. 's most recent spate of financial troubles , the institution 's executive chairman , Mohamed Basir Ismail , said . 
 Speaking to reporters this week after Bank Bumiputra 's shareholders approved a rescue plan , Tan Sri Basir said heavy lending to the property sector rocked the bank when property prices in Malaysia plummeted in 1984-85 . 
 He said the bank could n't wait any longer for prices to recover and for borrowers to service their loans . 
 So the bank 's board decided to make 1.23 billion Malaysian dollars -LRB- US$ 457 million -RRB- in provisions for interest payments from loans previously recorded as revenue but never actually received by the bank , and to submit a bailout package to replenish the bank 's paid-up capital . 
 The predicament , he added , was similar to the Hong Kong 1982-83 property-price collapse , which exposed the involvement of Bank Bumiputra 's former subsidiary in the colony in the largest banking scandal in Malaysia 's history . 
 The subsidiary , Bumiputra Malaysia Finance Ltd. , was left with M$ 2.26 billion in bad loans made to Hong Kong property speculators . 
 Both episodes wiped out Bank Bumiputra 's shareholders ' funds . 
 Each time , the bank 's 90 % shareholder -- Petroliam Nasional Bhd. , or Petronas , the national oil company -- has been called upon to rescue the institution . 
 In five years , Petronas , which became the dominant shareholder in a 1984 rescue exercise , has spent about M$ 3.5 billion to prop up the troubled bank . 
 Tan Sri Basir said the capital restructuring plan has been approved by Malaysia 's Capital Issues Committee and central bank . 
 Malaysia 's High Court is expected to approve the plan . 
 Once the plan is approved , Tan Sri Basir said , most of Bank Bumiputra 's nonperforming loans will have been fully provided for and the bank will be on track to report a pretax profit of between M$ 160 million and M$ 170 million for the fiscal year ending March 31 . 
 For the previous financial year , the bank would have reported a pretax profit of M$ 168 million if it had n't made provisions for the nonperforming loans , he said . 
 Malaysia 's Banking Secrecy Act prohibited the bank from identifying delinquent borrowers , said Tan Sri Basir . 
 But public documents indicate 10 % or more of the bank 's provisions were made for foregone interest on a M$ 200 million loan to Malaysia 's dominant political party , the United Malays National Organization , to build its convention and headquarters complex in Kuala Lumpur . 
 The loan to UMNO was made in September 1983 . 
 `` We lent a lot of money all over the place , '' said Tan Sri Basir , who refused to discuss the bank 's outstanding loans to 
 As well as the M$ 1.23 billion in provisions announced on Oct. 6 , the restructuring package covers an additional M$ 450 million in provisions made in earlier years but never reflected in a reduction of the bank 's paid-up capital . 
 At the end of the exercise , the cash injection from Petronas will increase the bank 's paid-up capital to M$ 1.15 billion after virtually being wiped out by the new provisions . 
 Heidi Ehman might have stepped from a recruiting poster for young Republicans . 
 White , 24 years old , a singer in her church choir , she symbolizes a generation that gave its heart and its vote to Ronald Reagan . 
 `` I felt kind of safe , '' she says . 
 No longer . 
 When the Supreme Court opened the door this year to new restrictions on abortion , Ms. Ehman opened her mind to Democratic politics . 
 Then a political novice , she stepped into a whirl of `` pro-choice '' marches , house parties and fund-raisers . 
 Now she leads a grassroots abortion-rights campaign in Passaic County for pro-choice Democratic gubernatorial candidate James Florio . 
 `` This is one where I cross party lines , '' she says , rejecting the anti-abortion stance of Rep. Florio 's opponent , Reagan-Republican Rep. James Courter . 
 `` People my age thought it was n't going to be an issue . 
 Now it has -- especially for people my age . '' 
 Polls bear out this warning , but after a decade of increased Republican influence here , the new politics of abortion have contributed to a world turned upside down for Mr. Courter . 
 Unless he closes the gap , Republicans risk losing not only the governorship but also the assembly next month . 
 Going into the 1990s , the GOP is paying a price for the same conservative social agenda that it used to torment Democrats in the past . 
 This change comes less from a shift in public opinion , which has n't changed much on abortion over the past decade , than in the boundaries of the debate . 
 New Jersey 's own highest court remains a liberal bulwark against major restrictions on abortion , but the U.S. Supreme Court ruling , Webster vs. Missouri , has engaged voters across the nation who had been insulated from the issue . 
 Before July , pro-choice voters could safely make political decisions without focusing narrowly on abortion . 
 Now , the threat of further restrictions adds a new dimension , bringing an upsurge in political activity by abortion-rights forces . 
 A recent pro-choice rally in Trenton drew thousands , and in a major reversal , Congress is defying a presidential veto and demanding that Medicaid abortions be permitted in cases of rape and incest . 
 `` If Webster had n't happened , you would n't be here , '' Linda Bowker tells a reporter in the Trenton office of the National Organization for Women . 
 `` We could have shouted from the rooftops about Courter... and no one would have heard us . '' 
 New Jersey is a proving ground for this aggressive women's-rights movement this year . 
 The infusion of activists can bring a clash of cultures . 
 In Cherry Hill , the National Abortion Rights Action League , whose goal is to sign up 50,000 pro-choice voters , targets a union breakfast to build labor support for its cause . 
 The league organizers seem more a fit with a convention next door of young aerobics instructors in leotards than the beefy union leaders ; `` I wish I could go work out , '' says a slim activist . 
 A labor chief speaks sardonically of having to `` man and woman '' Election Day phones . 
 No age group is more sensitive than younger voters , like Ms. Ehman . 
 A year ago this fall , New Jersey voters under 30 favored George Bush by 56 % to 39 % over Michael Dukakis , according to a survey then by Rutgers University 's Eagleton Institute . 
 A matching Eagleton-Newark Star Ledger poll last month showed a complete reversal . 
 Voters in the same age group backed Democrat Florio 55 % to 29 % over Republican Courter . 
 Abortion alone ca n't explain this shift , but New Jersey is a model of how so personal an issue can become a baseline of sorts in judging a candidate . 
 By a 2-to-1 ratio , voters appear more at ease with Mr. Florio 's stance on abortion , and polls indicate his lead widens when the candidates are specifically linked to the issue . 
 `` The times are my times , '' says Mr. Florio . 
 The Camden County congressman still carries himself with a trademark `` I'm-coming-down-your-throat '' intensity , but at a pause in Newark 's Columbus Day parade recently , he was dancing with his wife in the middle of the avenue in the city 's old Italian-American ward . 
 After losing by fewer than 1,800 votes in the 1981 governor 's race , he has prepared himself methodically for this moment , including deciding in recent years he could no longer support curbs on federal funding for Medicaid abortions . 
 `` If you 're going to be consistent and say it is a constitutionally protected right , '' he asks , `` how are you going to say an upscale woman who can drive to the hospital or clinic in a nice car has a constitutional right and someone who is not in great shape financially does not ? '' 
 Mr. Courter , by comparison , seems a shadow of the confident hawk who defended Oliver North before national cameras at Iran-Contra hearings two years ago . 
 Looking back , he says he erred by stating his `` personal '' opposition to abortion instead of assuring voters that he would n't impose his views on `` policy '' as governor . 
 It is a distinction that satisfies neither side in the debate . 
 `` He does n't know himself , '' Kathy Stanwick of the Abortion Rights League says of Mr. Courter 's position . 
 Even abortion opponents , however angry with Mr. Florio , ca n't hide their frustration with the Republican 's ambivalence . 
 `` He does n't want to lead the people , '' says Richard Traynor , president of New Jersey Right to Life . 
 Moreover , by stepping outside the state 's pro-choice tradition , Mr. Courter aggravates fears that he is too conservative as well on more pressing concerns such as auto insurance rates and the environment . 
 He hurt himself further this summer by bringing homosexual issues into the debate ; and by wavering on this issue and abortion , he has weakened his credibility in what is already a mean-spirited campaign on both sides . 
 Elected to Congress in 1978 , the 48-year-old Mr. Courter is part of a generation of young conservatives who were once very much in the lead of the rightward shift under Mr. Reagan . 
 Like many of his colleagues , he did n't serve in Vietnam in the 1960s yet embraced a hawkish defense and foreign policy -- even voting against a 1984 resolution critical of the U.S. mining of Nicaraguan harbors . 
 Jack Kemp and the writers Irving Kristol and George Gilder were influences , and Mr. Courter 's own conservative credentials proved useful to the current New Jersey GOP governor , Thomas Kean , in the 1981 Republican primary here . 
 The same partnership is now crucial to Mr. Courter 's fortunes , but the abortion issue is only a reminder of the gap between his record and that of the more moderate , pro-choice Gov. Kean . 
 While the Warren County congressman pursued an anti-government , anti-tax agenda in Washington , Gov. Kean was approving increased income and sales taxes at home and overseeing a near doubling in the size of New Jersey 's budget in his eight years in office . 
 Kean forces play down any differences with Mr. Courter , but this history makes it harder for the conservative to run against government . 
 Mr. Courter 's free-market plan to bring down auto insurance rates met criticism from Gov. Kean 's own insurance commissioner . 
 Mr. Courter is further hobbled by a record of votes opposed to government regulation on behalf of consumers . 
 Fluent in Spanish from his days in the Peace Corps , Mr. Courter actively courts minority voters but seems oddly over his head . 
 He is warm and polished before a Puerto Rican Congress in Asbury Park . 
 Yet minutes after promising to appoint Hispanics to high posts in state government , he is unable to say whether he has ever employed any in his congressional office . 
 `` I do n't think we do now , '' he says . 
 `` I think we did . '' 
 Asked the same question after his appearance , Democrat Florio identifies a staff member by name and explains her whereabouts today . 
 When he is presented with a poster celebrating the organization 's 20th anniversary , he recognizes a photograph of one of the founders and recalls time spent together in Camden . 
 Details and Camden are essential Florio . 
 Elected to Congress as a `` Watergate baby '' in 1974 , he ran for governor three years later . 
 In the opinion of many , he has n't stopped running since , even though he declined a rematch with Gov. Kean in 1985 . 
 His base in South Jersey and on the House Energy and Commerce Committee helped him sustain a network of political-action committees to preserve his edge . 
 With limited budgets for television in a high-priced market , Mr. Florio 's higher recognition than his rival is a major advantage . 
 More than ever , his pro-consumer and pro-environment record is in sync with the state . 
 Auto insurance rates are soaring . 
 A toxic-waste-dump fire destroyed part of an interstate highway this summer . 
 In Monmouth , an important swing area , Republican freeholders now run on a slogan promising to keep the county `` clean and green . '' 
 Mr. Florio savors this vindication , but at age 52 , the congressman is also a product of his times and losses . 
 He speaks for the death penalty as if reading from Exodus 21 ; to increase state revenue he focuses not on `` taxes '' but on `` audits '' to cut waste . 
 Hard-hitting consultants match ads with Mr. Courter 's team , and Mr. Florio retools himself as the lean , mean Democratic fighting machine of the 1990s . 
 Appealing to a young audience , he scraps an old reference to Ozzie and Harriet and instead quotes the Grateful Dead . 
 The lyric chosen -- `` long strange night '' -- may be an apt footnote to television spots by both candidates intended to portray each other as a liar . 
 The Democratic lawmaker fits a pattern of younger reformers arising out of old machines , but his ties to Camden remain a sore point because of the county 's past corruption . 
 His campaign hierarchy is chosen from elsewhere in the state , and faced with criticism of a sweetheart bank investment , he has so far blunted the issue by donating the bulk of his profits to his alma mater , Trenton State College . 
 Mr. Florio 's forcefulness on the abortion issue after the Webster ruling divides some of his old constituency . 
 Pasquale Pignatelli , an unlikely but enthusiastic pipe major in an Essex County Irish bagpipe band , speaks sadly of Mr. Florio . 
 `` I am a devout Catholic , '' says Mr. Pignatelli , a 40-year-old health officer . 
 `` I ca n't support him because of abortion . '' 
 Bill Wames Sr. , 72 , is Catholic too , but unfazed by Mr. Florio 's stand on abortion . 
 A security guard at a cargo terminal , he wears a Sons of Italy jacket and cap celebrating `` The US 1 Band . '' 
 `` I still think the woman has the right to do with her body as she pleases , '' he says . 
 `` If you want more opinions ask my wife . 
 She has lots of opinions . 
 Consumer prices rose a surprisingly moderate 0.2 % in September , pushed up mostly by a jump in clothing costs , the Labor Department reported . 
 Energy costs , which drove wholesale prices up sharply during the month , continued to decline at the retail level , pulling down transportation and helping to ease housing costs . 
 The report was the brightest news the financial markets had seen since before the stock market plunged more than 190 points last Friday . 
 The Dow Jones Industrial Average rallied on the news , closing 39.55 points higher at 2683.20 . 
 Bond prices also jumped as traders appeared to read the data as a sign that interest rates may fall . 
 But many economists were not nearly as jubilant . 
 The climb in wholesale energy prices is certain to push up retail energy prices in the next few months , they warned . 
 They also said the dollar is leveling off after a rise this summer that helped to reduce the prices of imported goods . 
 `` I think inflation is going to pick up through the fall , '' said Joel Popkin , a specialist on inflation who runs an economic consulting firm here . 
 `` It has been in what I would describe as a lull for the past several months . '' 
 `` We 've had whopping declines in consumer energy prices in each of the past three months , and at the wholesale level those are fully behind us now , '' said Jay Woodworth , chief domestic economist at Bankers Trust Co. in New York . 
 Because wholesale energy prices shot up by a steep 6.5 % last month , many analysts expected energy prices to rise at the consumer level too . 
 As a result , many economists were expecting the consumer price index to increase significantly more than it did . 
 But retail energy prices declined 0.9 % in September . 
 Though analysts say competition will probably hold down increases in retail energy prices , many expect some of the wholesale rise to be passed along to the consumer before the end of the year . 
 Still , some analysts insisted that the worst of the inflation is behind . 
 `` It increasingly appears that 1987-88 was a temporary inflation blip and not the beginning of a cyclical inflation problem , '' argued Edward Yardeni , chief economist at Prudential-Bache Securities Inc. in New York . 
 In both 1987 and 1988 , consumer prices rose 4.4 % . 
 A run-up in world oil prices last winter sent consumer prices soaring at a 6.7 % annual rate in the first five months of this year , but the subsequent decline in energy prices has pulled the annual rate back down to 4.4 % . 
 Mr. Yardeni predicted that world business competition will continue to restrain prices . 
 `` The bottom line is , it seems to me that the economic environment has become very , very competitve for a lot of businesses , '' he said . 
 `` Back in 1987-88 , business was operating at fairly tight capacity , so businesses felt they could raise prices . '' 
 Now , he said , a slowdown in economic activity has slackened demand . 
 The mild inflation figures renewed investors ' hopes that the Federal Reserve will ease its interest-rate stance . 
 The steep climb in producer prices reported last Friday fostered pessimism about lower interest rates and contributed to the stock market 's 6.9 % plunge that day . 
 In the past several days , however , the U.S. 's central bank has allowed a key interest rate to fall slightly to try to stabilize the markets . 
 Analysts say Fed policy makers have been wary of relaxing credit too much because they were still uncertain about the level of inflation in the economy . 
 Excluding the volatile categories of energy and food -- leaving what some economists call the core inflation rate -- consumer prices still rose only 0.2 % in September . 
 Transportation costs actually fell 0.5 % , and housing costs gained only 0.1 % . 
 Apparel prices rocketed up 1.7 % , but that was after three months of declines . 
 Medical costs continued their steep ascent , rising 0.8 % after four consecutive months of 0.7 % increases . 
 Car prices , another area that contributed to the steep rise in the wholesale index last month , still showed declines at the consumer level . 
 They dropped 0.4 % as dealers continued to offer rebates to attract customers . 
 Food prices rose 0.2 % for the second month in a row , far slower than the monthly rises earlier in the year . 
 Separately , the Labor Department reported that average weekly earnings rose 0.3 % in September , after adjusting for inflation , following a 0.7 % decline in August . 
 All the numbers are adjusted for seasonal fluctuations . 
 Here are the seasonally adjusted changes in the components of the Labor Department 's consumer price index for September . 
 After watching interest in the sport plummet for years , the ski industry is trying to give itself a lift . 
 Across the country , resorts are using everything from fireworks to classical-music concerts to attract new customers . 
 Some have built health spas , business centers and shopping villages so visitors have more to do than ski . 
 And this week , the industry 's efforts will go national for the first time when it unveils a $ 7 million advertising campaign . 
 Such efforts -- unheard of only a few years ago -- are the latest attempts to revive the sagging $ 1.76 billion U.S. ski industry . 
 Since the start of the decade , lift-ticket sales have grown only 3 % a year on average , compared with 16 % annual growth rates in the '60s and '70s . 
 Last season , lift-ticket sales fell for the first time in seven years . 
 By some estimates , nearly a fourth of all U.S. ski areas have been forced to shut down since the early '80s . 
 Competition and mounting insurance and equipment costs have been the undoing of many resorts . 
 But another big problem has been the aging of baby boomers . 
 Skiing , after all , has mainly been for the young and daring and many baby boomers have outgrown skiing or have too many family responsibilities to stick with the sport . 
 In its new ad campaign , created by D'Arcy Masius Benton & Bowles Inc. , Chicago , the ski industry is trying to change its image as a sport primarily for young white people . 
 One 60-second TV spot features a diverse group of skiers gracefully gliding down sun-drenched slopes : senior citizens , minorities , families with children -- even a blind skier . 
 `` Ski school is great , '' cries out a tot , bundled in a snowsuit as he plows down a bunny slope . 
 `` You 'll never know'til you try , '' says a black skier . 
 `` We used to show some hot-dog skier in his twenties or thirties going over the edge of a cliff , '' says Kathe Dillmann , a spokeswoman for the United Ski Industries Association , the trade group sponsoring the campaign . 
 Ski promotions have traditionally avoided the touchy issue of safety . 
 But the new commercials deal with it indirectly by showing a woman smiling as she tries to get up from a fall . 
 `` We wanted to show it 's okay if you fall , '' says Ms. Dillmann . 
 `` Most people think if you slip , you 'll wind up in a body cast . '' 
 The ad campaign represents an unusual spirit of cooperation among resorts and ski equipment makers ; normally , they only run ads hyping their own products and facilities . 
 But in these crunch times for the ski industry , some resorts , such as the Angel Fire , Red River and Taos ski areas in New Mexico , have even started shuttle-busing skiers to each other 's slopes and next year plan to sell tickets good for all local lifts . 
 Many resorts also are focusing more on the service side of their business . 
 Since 40 % of skiers are parents , many slopes are building nurseries , expanding ski schools and adding entertainment for kids . 
 Vail , Colo. , now has a playland that looks like an old mining town ; kids can ski through and pan for fool 's gold . 
 For $ 15 , they can enjoy their own nightly entertainment , with dinner , without mom and dad . 
 A few years ago , parents usually had to hire a sitter or take turns skiing while one spouse stayed with the children . 
 `` Most parents who had to go through that never came back , '' says Michael Shannon , president of Vail Associates Inc. , which owns and operates the Vail and nearby Beaver Creek resorts . 
 To make skiing more convenient for time-strapped visitors , several resorts are buying or starting their own travel agencies . 
 In one phone call , ski buffs can make hotel and restaurant reservations , buy lift tickets , rent ski equipment and sign up for lessons . 
 And resorts are adding other amenities , such as pricey restaurants , health spas and vacation packages with a twist . 
 During Winter Carnival week , for example , visitors at Sunday River in Maine can take a hot-air balloon ride . 
 `` People these days want something else to do besides ski and sit in the bar , '' says Don Borgeson , executive director of Angel Fire , N.M. 's Chamber of Commerce . 
 The ski industry hopes to increase the number of skiers by 3.5 million to about 21.7 million in the next five years with its latest ads and promotions . 
 But some think that 's being overly optimistic . 
 For one thing , it may be tough to attract people because skiing is still expensive : a lift ticket can cost up to $ 35 a day and equipment prices are rising . 
 And most vacationers still prefer a warm climate for their winter excursions . 
 An American Express Co. survey of its travel agents revealed that only 34 % believe their clients will pick a trip this winter based on the availability of winter sports , as opposed to 69 % who think that warm-weather sports will be the deciding factor . 
 `` Even if they could bring in that many new skiers , I do n't know if -LCB- the industry -RCB- could handle that kind of an increase , '' says I. William Berry , editor and publisher of the Ski Industry Letter in Katonah , N.Y . 
 `` Most people will come on the weekend , the slopes will be overcrowded and then these -LCB- new skiers -RCB- wo n't come back . 
 They did n't play the third game of the World Series on Tuesday night as scheduled , and they did n't play it on Wednesday or Thursday either . 
 But you knew that , did n't you ? 
 They are supposed to play the game next Tuesday , in Candlestick Park here . 
 The theory is that the stadium , damaged by Tuesday 's earthquake , will be repaired by then , and that people will be able to get there . 
 Like just about everything else , that remains to be seen . 
 Aftershocks could intervene . 
 But , at least , the law of averages should have swung to the favorable side . 
 It may seem trivial to worry about the World Series amid the destruction to the Bay Area wrought by Tuesday 's quake , but the name of this column is `` On Sports , '' so I feel obliged to do so . 
 You might be interested to know that baseball , not survival , appeared to be the first thought of most of the crowd of 60,000-odd that had gathered at Candlestick at 5:04 p.m. Tuesday , a half-hour before game time , when the quake struck . 
 As soon as the tremor passed , many people spontaneously arose and cheered , as though it had been a novel kind of pre-game show . 
 One fan , seated several rows in front of the open , upper-deck auxiliary press section where I was stationed , faced the assembled newsies and laughingly shouted , `` We arranged that just for you guys '' I thought and , I 'm sure , others did : `` You should n't have bothered . '' 
 I 'd slept through my only previous brush with natural disaster , a tornado 15 or so summers ago near Traverse City , Mich. , so I was unprepared for one reaction to such things : the urge to talk about them . 
 Perhaps primed by the daily diet of radio and TV reporters thrusting microphones into people 's faces and asking how they `` feel '' about one calamity or another , fellow reporters and civilians who spied my press credential were eager to chat . 
 `` It felt like I was on a station platform and a train went by , '' said one man , describing my own reaction . 
 A women said she saw the park 's light standards sway . 
 A man said he saw the upper rim undulate . 
 I saw neither . 
 Dictates of good sense to the contrary not withstanding , the general inclination was to believe that the disturbance would be brief and that ball would be played . 
 `` I was near the top of the stadium , and saw a steel girder bow six feet from where I sat , but I stayed put for 10 or 15 minutes , '' confessed a friend . 
 `` I guess I thought , ` This is the World Series and I 'm not gon na wimp out ' '' 
 Here in the Global Village , though , folks do not stay uninformed for long . 
 Electrical power was out in still-daylighted Candlestick Park , but battery-operated radios and television sets were plentiful . 
 Within a few minutes , the true extent of the catastrophe was becoming clear . 
 Its Richter Scale measurement was reported as 6.5 , then 6.9 , then 7.0 . 
 A section of the Bay Bridge had collapsed , as had a part of Interstate Highway 880 in Oakland . 
 People had died . 
 At 5:40 p.m. , scheduled game time having passed , some fans chanted `` Let 's Play Ball . '' 
 No longer innocent , they qualified as fools . 
 The stadium was ordered evacuated soon afterward ; the announcement , made over police bullhorns , cited the power outage , but it later was revealed that there also had been damage of the sort reported by my friend . 
 Outside , I spotted two young men lugging blocks of concrete . 
 `` Pieces of Candlestick , '' they said . 
 The crowd remained good natured , even bemused . 
 TV reporters interviewed fans in the parking lots while , a few feet away , others watched the interviews on their portable TVs . 
 The only frenzy I saw was commercial : Booths selling World Series commemorative stamps and dated postmarks were besieged by fledgling speculators who saw future profit in the items . 
 The traffic jam out of the park was monumental . 
 It took me a half-hour to move 10 feet from my parking spot in an outer lot to an aisle , and an additional hour to reach an inner roadway a half-block away . 
 The six-mile trip to my airport hotel that had taken 20 minutes earlier in the day took more than three hours . 
 At my hotel , the Westin , power was out , some interior plaster had broken loose and there had been water damage , but little else . 
 With Garpian randomness , a hotel across the street , the Amfac , had been hit harder : A large sheet of its concrete facade and several window balconies were torn away . 
 The Westin staff had , kindly , set out lighted candles in the ballroom , prepared a cold-cuts buffet and passed around pillows and blankets . 
 I fell asleep on the lobby floor , next to a man wearing a Chicago Cubs jacket . 
 I expected him to say , `` I told you so , '' but he already was snoring . 
 The journalistic consensus was that the earthquake made the World Series seem unimportant . 
 My response was that sports rarely are important , only diverting , and the quake merely highlighted that fact . 
 Should the rest of the Series be played at all ? 
 The quake and baseball were n't related , unlike the massacre of athletes that attended the 1972 Olympics . 
 That heavily politicized event learned nothing from the horrifying experience , and seems doomed to repeat it . 
 Two ironies intrude . 
 This has been widely dubbed the BART Series , after the local subway line , and the Bay Bridge Series . 
 Flags fly at half-staff for the death of Bart Giamatti , the late baseball commissioner , and now the Bay Bridge lies in ruins . 
 A Series that was shaping up as the dullest since the one-sided Detroit-over-San Diego go of 1984 has become memorable in the least fortunate way . 
 Still , its edge is lost . 
 It now will be played mostly for the record , and should be wrapped up as quickly as possible , without `` off '' days . 
 And I will never again complain about a rainout . 
 The disarray in the junk-bond market that began last month with a credit crunch at Campeau Corp. has offered commercial banks a golden opportunity to play a greater role in financing billion-dollar takeovers . 
 But two big New York banks seem to have kicked those chances away , for the moment , with the embarrassing failure of Citicorp and Chase Manhattan Corp. to deliver $ 7.2 billion in bank financing for a leveraged buy-out of United Airlines parent UAL Corp . 
 For more than a decade , banks have been pressing Congress and banking regulators for expanded powers to act like securities firms in playing Wall Street 's lucrative takeover game , from giving mergers advice all the way to selling and trading high-yield junk bonds . 
 Those expanded powers reached their zenith in July when Bankers Trust New York Corp. provided mergers advice , an equity investment and bank loans for the $ 3.65 billion leveraged buy-out of Northwest Airlines parent NWA Inc . 
 One of the major selling points used by Los Angeles financier Alfred Checchi in getting the takeover approved was that the deal did n't include any junk bonds . 
 That was seen as an advantage in lobbying airline employees and Washington regulators for approval of the contested takeover . 
 All $ 3.35 billion in debt for the deal was supplied by banks . 
 Charles Nathan , co-head of mergers and acquisitions at Salomon Brothers Inc. , says it is natural for banks to try to expand beyond their bread-and-butter business of providing senior debt for buy-outs . 
 But the UAL collapse , he says , `` may tell you it 's not going to work that easily . '' 
 David Batchelder , a mergers adviser in La Jolla , Calif. , who aided Los Angeles investor Marvin Davis on the bids which put both UAL and NWA in play as takeover candidates this year , says that banks have been `` preparing to play a larger and larger role in acquisition financing . '' 
 Mr. Batchelder says that in the past , banks would normally have loaned 65 % of a total buy-out price , with the loans secured by the target company 's assets . 
 Another 20 % of the borrowed funds would come from the sale to investors of junk bonds , which offer less security and typically carry higher yields than bank loans . 
 Mr. Checchi 's purchase of NWA , Mr. Batchelder notes , `` was probably the most aggressive to date , '' with bank debt at 85 % of the purchase price . 
 But Mr. Batchelder says that Citicorp 's `` failure to deliver '' on its promise to raise the UAL bank debt for a labor-management buy-out group `` is very distressing to potential users of a ` highly-confident ' letter from commercial banks . '' 
 His client , Mr. Davis , used just such a letter from Citicorp in pursuing UAL ; Citicorp later agreed to work with a competing UAL buy-out group . 
 Executives of Citicorp and Chase Manhattan declined to comment on either the UAL situation , or on the changing nature of banks ' role in financing takeovers . 
 In the wake of Campeau 's problems , prices of junk bonds tumbled , throwing into doubt the ability of corporate acquirers to finance large takeovers with the help of junk bond sales . 
 Mark Solow , senior managing director at Manufacturers Hanover Trust Co. , says the falloff in junk bonds may yet open new business opportunities to banks in structuring takeovers . 
 But he warns that banks will have `` to have enough discipline '' not to make loans that are too risky . 
 In fact , Manufacturers Hanover said in its third-quarter earnings report that fees from syndicating loans to other banks dropped 48 % , to $ 21 million . 
 `` We did n't take part in a lot of deals because their credit quality was poor , '' says a bank spokesman . 
 James B. Lee , head of syndications and private placements at Chemical Banking Corp. , said he believes banks can still make a credible offer of one-stop shopping for takeover finance . 
 As evidence , he cites yesterday 's arrangement for the final financing of a $ 3 billion bid for American Medical International Inc. in which Chemical served as both the lead bank and an equity investor . 
 Beyond the current weakness in the junk bond market , banks have another advantage over investment banks in financing contested takeovers . 
 Arthur Fleischer Jr. , a takeover lawyer at Fried Frank Harris Shriver & Jacobson , notes that `` a political and emotional bias '' has developed against junk bonds . 
 One hostile bidder who deliberately avoided using junk bonds was Paramount Communications Inc. in its initial offer to acquire Time Inc. for $ 10.7 billion , or $ 175 a share . 
 A Paramount spokesman says that decision was based on the financial , not political , drawbacks of junk bonds . 
 But some observers believe Paramount Chairman Martin Davis wanted to avoid the possible taint of being perceived as a corporate raider in his controversial bid for Time . 
 In the end , Mr. Davis used junk bonds so that he could raise Paramount 's bid to $ 200 a share . 
 Some Monday-morning quarterbacks said the initial lower bid , without junk bonds , was a factor in his losing the company . 
 Time eluded Paramount by acquiring Warner Communications Inc . 
 The success of the NWA financing , and the failure of the UAL deal , also seem to highlight the important new role in takeover financing being played by Japanese banks . 
 Japanese banks accounted for 50 % of the NWA bank debt , according to a report by Transportation Secretary Samuel Skinner . 
 But it was broad-scale rejection by Japanese banks that helped seal the fate of the attempt to buy UAL . 
 Citicorp and Chase are attempting to put together a new , lower bid . 
 Takanori Mizuno , chief economist of the Institute for Financial Affairs Inc. , a Tokyo research center on finance and economics , says , `` The junk bond market became very jittery , and there 's a fear of a coming recession and the possible bankruptcy of LBO companies . 
 Harley-Davidson Inc. filed suit in federal court here , alleging that a group that holds 6.2 % of its stock made `` false , deceptive and misleading '' statements in recent regulatory filings and public announcements . 
 Harley-Davidson 's complaint claims that the group , led by investor Malcolm I. Glazer , violated securities laws by failing to disclose plans to purchase 15 % of the company 's shares outstanding and that when the required Hart-Scott-Rodino filing eventually was made , it did n't disclose the group 's alleged earlier violation of the so-called prior-notice requirements of the law . 
 Mr. Glazer could n't immediately be reached to comment . 
 But when Harley last week publicly questioned the legality of the group 's filing procedures , the Rochester , N.Y. , investor said `` we complied with every law , '' and he denied any wrongdoing . 
 The Glazer group said in a Securities and Exchange Commission filing in early October that it may seek a controlling interest in Harley-Davidson , or seek representation on the company 's board . 
 Harley has said it does n't intend to be acquired by the Glazer group or any other party . 
 Inland Steel Industries Inc. , battered by lower volume and higher costs , posted a 75 % drop in third-quarter earnings . 
 The nation 's fourth-largest steelmaker earned $ 18.3 million , or 43 cents a share , compared with $ 61 million , or $ 1.70 a share , a year earlier , when the industry was enjoying peak demand and strong pricing . 
 Sales fell to $ 981.2 million from $ 1.02 billion . 
 The earnings also mark a significant drop from the second quarter 's $ 45.3 million or $ 1.25 a share . 
 Moreover , the earnings were well below analysts ' expectations of about $ 1.16 a share . 
 In composite trading on the New York Stock Exchange , Inland closed yesterday at $ 35.875 a share , down $ 1 . 
 The company attributed the earnings drop to lower volume related to seasonal demand and the soft consumer durable market , especially in the automotive sector . 
 However , the company also lost orders because of prolonged labor talks in the second quarter . 
 Third-quarter shipments slipped 7 % from the year-ago period , and 17 % from this year 's second quarter . 
 Profit of steel shipped for the company 's steel segment slid to $ 26 a ton , from $ 66 a ton a year earlier and $ 57 a ton a quarter earlier . 
 Analysts noted that the disappointing results do n't reflect lower prices for steel products . 
 Charles Bradford , an analyst with Merrill Lynch Capital Markets , said higher prices for galvanized and cold-rolled products offset lower prices for bar , hot-rolled and structural steel . 
 Structural steel , which primarily serves the construction market , was especially hurt by a 15 % price drop , Mr. Bradford said . 
 The company said its integrated steel sector was also hurt by higher raw material , repair and maintenance , and labor costs . 
 The increased labor costs became effective Aug. 1 under terms of the four-year labor agreement with the United Steelworkers union . 
 Meanwhile , the company 's service center segment , which saw operating profit drop to $ 11.5 million from $ 30.7 million a year ago , experienced much of the same demand and cost problems , as well as start-up costs associated with a coil processing facility in Chicago and an upgraded computer information system . 
 Inland Chairman Frank W. Luerssen said the company 's short-term outlook is `` clouded by uncertainties in the economy and financial markets . '' 
 However , he noted that steel mill bookings are up from early summer levels , and that he expects the company to improve its cost performance in the fourth quarter . 
 In the first nine months , profit was $ 113 million , or $ 3.04 a share , on sales of $ 3.19 billion , compared with $ 204.5 million , or $ 5.76 a share , on sales of $ 3.03 billion , a year earlier . 
 The `` seismic '' activity of a financial market bears a resemblance to the seismic activity of the earth . 
 When things are quiet -LRB- low volatility -RRB- , the structures on which markets stand can be relatively inefficient and still perform their functions adequately . 
 However , when powerful forces start shaking the market 's structure , the more `` earthquake-resistant '' it is , the better its chance for survival . 
 America 's financial markets do not yet have all the required modern features required to make them fully `` aftershock-resistant . '' 
 Investors lack equal access to the markets ' trading arena and its information . 
 That structural lack is crucial because investors are the only source of market liquidity . 
 And liquidity is what markets need to damp quakes and aftershocks . 
 In today 's markets , specialists -LRB- on the New York Stock Exchange -RRB- and `` upstairs '' market makers -LRB- in the over-the-counter market -RRB- are the only market participants allowed to play a direct role in the price-determination process . 
 When they halt trading , all market liquidity is gone . 
 And when any component of the market -- cash , futures or options -- loses liquidity , the price discovery system -LRB- the way prices are determined -RRB- becomes flawed or is lost entirely for a time . 
 Last Friday the 13th -LRB- as well as two years ago this week -RRB- the markets became unlinked . 
 When that happened , `` seismic '' tremors of fear -- much like the shock waves created by an earthquake -- coursed through the market and increased the market 's volatility . 
 Lack of important , needed information can cause fear . 
 Fear is the father of panic . 
 Panic frequently results in irrational behavior . 
 And in financial markets , irrational behavior is sometimes translated into catastrophe . 
 When market tremors start , it is crucial that as much information about transaction prices and the supply-demand curve -LRB- buy and sell orders at various prices -RRB- be made available to all , not just to market makers . 
 Because of a lack of information and access , many investors -- including the very ones whose buying power could restore stability and damp volatility -- are forced to stand on the sidelines when they are most needed , because of their ignorance of important market information . 
 To add aftershock-damping power to America 's markets , a modern , electronic trading system should be implemented that permits equal access to the trading arena -LRB- and the information that would automatically accompany such access -RRB- by investors -- particularly institutional investors . 
 Contrary to some opinions , the trading activities of specialists and other market makers do not provide liquidity to the market as a whole . 
 What market makers provide is immediacy , a very valuable service . 
 Liquidity is not a service . 
 It is a market attribute -- the ability to absorb selling orders without causing significant price changes in the absence of news . 
 Market makers buy what investors wish to sell ; their business is reselling these unwanted positions as quickly as possible to other investors , and at a profit . 
 As a result , while any one customer may purchase immediacy by selling to a market maker -LRB- which is micro-liquidity for the investor -RRB- , the market as a whole remains in the same circumstances it was before the transaction : The unwanted position is still an unwanted position ; only the identity of the seller has changed . 
 In fact it can be argued that increasing capital commitments by market makers -LRB- a result of some post-1987 crash studies -RRB- also increases market volatility , since the more securities are held by market makers at any given time , the more selling pressure is overhanging the market . 
 In an open electronic system , any investor wishing to pay for real-time access to the trading arena through a registered broker-dealer would be able to see the entire supply-demand curve -LRB- buy and sell orders at each price -RRB- entered by dealers and investors alike , and to enter and execute orders . 
 Current quotations would reflect the combined financial judgment of all market participants -- not just those of intermediaries who become extremely risk-averse during times of crisis . 
 Investors and professionals alike would compete on the level playing field Congress sought and called a `` national market system '' -LRB- not yet achieved -RRB- almost 15 years ago when it passed the Securities Reform Act of 1975 . 
 Last Friday 's market gyrations did not result in severe `` aftershocks . '' 
 Were we smart or just lucky ? 
 I 'm not certain . 
 But I am sure we need to maximize our `` earthquake '' protection by making certain that our market structures let investors add their mighty shock-damping power to our nation 's markets . 
 Mr. Peake is chairman of his own consulting company in Englewood , N.J . 
 NOW YOU SEE IT , now you do n't . 
 The recession , that is . 
 The economy 's stutter steps leave investors wondering whether things are slowing down or speeding up . 
 So often are government statistics revised that they seem to resemble a spinning weather vane . 
 For the past seven years , investors have had the wind at their backs , in the form of a generally growing economy . 
 Some may have forgotten -- and some younger ones may never have experienced -- what it 's like to invest during a recession . 
 Different tactics are called for , as losing money becomes easier and making money becomes tougher . 
 For those investors who believe -- or fear -- that 1990 will be a recession year , many economists and money managers agree on steps that can be taken to lower the risks in a portfolio . 
 In a nutshell , pros advise investors who expect a slowdown to hold fewer stocks than usual and to favor shares of big companies in `` defensive '' industries . 
 A heavy dose of cash is prescribed , along with a heavier-than-usual allotment to bonds -- preferably government bonds . 
 It 's tempting to think these defensive steps can be delayed until a recession is clearly at hand . 
 But that may not be possible , because recessions often take investors by surprise . 
 `` They always seem to come a bit later than you expect . 
 When they do hit , they hit fast , '' says David A. Wyss , chief financial economist at the Data Resources division of McGraw-Hill Inc . 
 Though he himself does n't expect a recession soon , Mr. Wyss advises people who do that `` the best thing to be in is long that is , 20-year to 30-year Treasury bonds . '' 
 The reason is simple , Mr. Wyss says : `` Interest rates almost always decline during recession . '' 
 As surely as a seesaw tilts , falling interest rates force up the price of previously issued bonds . 
 They are worth more because they pay higher interest than newly issued bonds do . 
 That effect holds true for both short-term and long-term bonds . 
 But short-term bonds ca n't rise too much , because everyone knows they will be redeemed at a preset price fairly soon . 
 Long-term bonds , with many years left before maturity , swing more widely in price . 
 But not just any bonds will do . 
 Corporate bonds `` are usually not a good bet in a recession , '' Mr. Wyss says . 
 As times get tougher , investors fret about whether companies will have enough money to pay their debts . 
 This hurts the price of corporate bonds . 
 Also , he notes , `` most corporate bonds are callable . '' 
 That means that a corporation , after a specified amount of time has passed , can buy back its bonds by paying investors the face value -LRB- plus , in some cases , a sweetener -RRB- . 
 When interest rates have dropped , it makes sense for corporations to do just that ; they then save on interest costs . 
 But the investors are left stranded with money to reinvest at a time when interest rates are puny . 
 If corporate bonds are bad in recessions , junk bonds are likely to be the worst of all . 
 It 's an `` absolute necessity '' to get out of junk bonds when a recession is in the offing , says Avner Arbel , professor of finance at Cornell University . 
 `` Such bonds are very sensitive to the downside , and this could be a disaster . '' 
 Municipal bonds are generally a bit safer than corporate bonds in a recession , but not as safe as bonds issued by the federal government . 
 During an economic slump , local tax revenues often go down , raising the risks associated with at least some municipals . 
 And , like corporates , many municipal bonds are callable . 
 But a few experts , going against the consensus , do n't think bonds would help investors even if a recession is in the offing . 
 One of these is Jeffrey L. Beach , director of research for Underwood Neuhaus & Co. , a brokerage house in Houston , who thinks that `` we 're either in a recession or about to go into one . '' 
 What 's more , he thinks this could be a nastier recession than usual : `` Once the downturn comes , it 's going to be very hard to reverse . '' 
 Investors , he advises , `` should be cautious , '' holding fewer stocks than usual and also shunning bonds . 
 Because he sees `` 5 % to 6 % base rate of inflation in the economy , '' he doubts that interest rates will fall much any time soon . 
 Instead , Mr. Beach says , investors `` probably should be carrying a very high level of cash , '' by which he means such so-called cash equivalents as money-market funds and Treasury bills . 
 Greg Confair , president of Sigma Financial Inc. in Allentown , Pa. , also recommends that investors go heavily for cash . 
 He is n't sure a recession is coming , but says the other likely alternative -- reignited inflation -- is just as bad . 
 `` This late in an expansion , '' the economy tends to veer off either into damaging inflation or into a recession , Mr. Confair says . 
 The Federal Reserve Board 's plan for a `` soft landing , '' he says , requires the Fed to navigate `` an ever-narrowing corridor . '' 
 A soft landing is n't something that can be achieved once and for all , Mr. Confair adds . 
 It has to be engineered over and over again , month after month . 
 He believes that the task facing Fed Chairman Alan Greenspan is so difficult that it resembles `` juggling a double-bladed ax and a buzz saw . '' 
 And , in a sense , that 's the kind of task individuals face in deciding what to do about stocks -- the mainstay of most serious investors ' portfolios . 
 It comes down to a question of whether to try to `` time '' the market . 
 For people who can ride out market waves through good times and bad , stocks have been rewarding long-term investments . 
 Most studies show that buy-and-hold investors historically have earned an annual return from stocks of 9 % to 10 % , including both dividends and price appreciation . 
 That 's well above what bonds or bank certificates have paid . 
 Moreover , because no one knows for sure just when a recession is coming , some analysts think investors should n't even worry too much about timing . 
 `` Trying to time the economy is a mistake , '' says David Katz , chief investment officer of Value Matrix Management Inc. in New York . 
 Mr. Katz notes that some economists have been predicting a recession for at least two years . 
 Investors who listened , and lightened up on stocks , `` have just hurt themselves , '' he says . 
 Mr. Katz adds that people who jump in and out of the stock market need to be right about 70 % of the time to beat a buy-and-hold strategy . 
 Frequent trading runs up high commission costs . 
 And the in-and-outer might miss the sudden spurts that account for much of the stock market 's gains over time . 
 Still , few investors are able to sit tight when they are convinced a recession is coming . 
 After all , in all five recessions since 1960 , stocks declined . 
 According to Ned Davis , president of Ned Davis Research Inc. in Nokomis , Fla. , the average drop in the Dow Jones Industrial Average was about 21 % , and the decrease began an average of six months before a recession officially started . 
 By the time a recession is `` official '' -LRB- two consecutive quarters of declining gross national product -RRB- , much of the damage to stocks has already been done-and , in the typical case , the recession is already half over . 
 About six months before a recession ends , stocks typically begin to rise again , as investors anticipate a recovery . 
 The average recession lasts about a year . 
 Unfortunately , though , recessions vary enough in length so that the average ca n't reliably be used to guide investors in timing stock sales or purchases . 
 But whatever their advice about timing , none of these experts recommend jettisoning stocks entirely during a recession . 
 For the portion of an investor 's portfolio that stays in stocks , professionals have a number of suggestions . 
 Mr. Katz advocates issues with low price-earnings ratios -- that is , low prices in relation to the company 's earnings per share . 
 `` Low P-E '' stocks , he says , vastly outperform others `` during a recession or bear market . '' 
 In good times , he says , they lag a bit , but overall they provide superior performance . 
 Prof. Arbel urges investors to discard stocks in small companies . 
 Small-company shares typically fall more than big-company stocks in a recession , he says . 
 And in any case , he argues , stocks of small companies are `` almost as overpriced as they were Sept. 30 , 1987 , just before the crash . '' 
 For example , Mr. Arbel says , stocks of small companies are selling for about 19 times cash flow . 
 Cash flow , basically earnings plus depreciation , is one common gauge of a company 's financial health . -RRB- 
 That ratio is dangerously close to the ratio of 19.7 that prevailed before the 1987 stock-market crash , Mr. Arbel says . 
 And it 's way above the ratio -LRB- 7.5 times cash flow -RRB- that bigger companies are selling for . 
 Another major trick in making a portfolio recession-resistant is choosing stocks in `` defensive '' industries . 
 Food , tobacco , drugs and utilities are the classic examples . 
 Recession or not , people still eat , smoke , and take medicine when they 're sick . 
 George Putnam III , editor of Turnaround Letter in Boston , offers one final tip for recession-wary investors . 
 `` Keep some money available for opportunities , '' he says . 
 `` If the recession does hit , there will be some great investment opportunities just when things seem the blackest . '' 
 Mr. Dorfman covers investing issues from The Wall Street Journal 's New York bureau . 
 Some industry groups consistently weather the storm better than others . 
 The following shows the number of times these industries outperformed the Standard & Poor 's 500-Stock Index during the first six months of the past seven recessions . 
 Bond prices posted strong gains as investors went on a bargain hunt . 
 But while the overall market improved , the new-issue junk-bond market continued to count casualties , even as junk-bond prices rose . 
 Yesterday , Prudential-Bache Securities Inc. said it postponed a $ 220 million senior subordinated debenture offering by York International Corp . 
 And Donaldson , Lufkin & Jenrette Securities Corp. scrambled to restructure and improve the potential returns on a $ 475 million debenture offering by Chicago & North Western Acquisition Corp. that was still being negotiated late last night . 
 The issue by Chicago & North Western is one of the so-called good junk-bond offerings on the new-issue calendar . 
 Some analysts said the restructuring of the railroad concern 's issue shows how tough it is for underwriters to sell even the junk bonds of a company considered to be a relatively good credit risk . 
 Since last week 's junk-bond market debacle , many new issues of high-yield , high-risk corporate bonds have either been scaled back , delayed or dropped . 
 On Wednesday , Drexel Burnham Lambert Inc. had to slash the size of Continental Airlines ' junk-bond offering to $ 71 million from $ 150 million . 
 Salomon Brothers Inc. has delayed Grand Union Co. 's $ 1.16 billion junk-bond offering while it restructures the transaction . 
 Last week , the Grand Union offering was sweetened to include warrants that allow bondholders to acquire common stock . 
 Prudential-Bache said the York issue was delayed because of market conditions . 
 `` Everything is going through firehoops right now , and -LCB- Chicago & North Western -RCB- is no exception , '' said Mariel Clemensen , vice president , high-yield research , at Citicorp . 
 Portfolio managers say sweeteners like equity kickers and stricter protective covenants may increasingly be required to sell junk-bond deals . 
 Dan Baldwin , managing director of high-yield investments at Chancellor Capital Management , said the Chicago & North Western offering was restructured in part because `` several large insurance buyers right now are demanding equity as part of the package . 
 If you 're going to take the risk in this market , you want something extra . '' 
 Mr. Baldwin likes the offering . 
 But several mutual-fund managers , nervous about the deteriorating quality of their junk-bond portfolios and shy about buying new issues , said they 're staying away from any junk security that is n't considered first rate for its class . 
 While they consider the Chicago & North Western issue to be good , they do n't view it as the best . 
 To lure buyers to the Chicago & North Western bonds , portfolio managers said Donaldson Lufkin sweetened the transaction by offering the bonds with a resettable interest rate and a 10 % equity kicker . 
 The bonds are expected to have a 14 % coupon rate . 
 The equity arrangement apparently would allow bondholders to buy a total of 10 % of the stock of CNW Corp. , Chicago & North Western 's parent company . 
 Donaldson Lufkin declined to comment on the restructuring . 
 According to some analysts familiar with the negotiations , the 10 % of equity would come directly from Donaldson Lufkin and a fund affiliated with the investment bank Blackstone Group , which would reduce their CNW equity holdings by 5 % each . 
 That would leave the Blackstone fund with a 60 % stake and Donaldson Lufkin with 15 % . 
 Despite the problems with new issues , high-yield bonds showed gains in the secondary , or resell , market . 
 Junk bonds ended about one-half point higher with so-called high-quality issues from RJR Capital Holdings Corp. and Petrolane Gas Service Limited Partnership rising one point . 
 In the Treasury market , the benchmark 30-year bond rose seven-eighths point , or $ 8.75 for each $ 1,000 face amount . 
 The gain reflects fresh economic evidence that inflation is moderating while the economy slows . 
 That raised hopes that interest rates will continue to move lower . 
 The Labor Department reported that consumer prices rose just 0.2 % last month , slightly lower than some economists had expected . 
 But there were also rumors yesterday that several Japanese institutional investors were shifting their portfolios and buying long-term bonds while selling shorter-term Treasurys . 
 Short-term Treasury securities ended narrowly mixed , with two-year notes posting slight declines while three-year notes were slightly higher . 
 Yesterday , the Fed executed four-day matched sales , a technical trading operation designed to drain reserves from the banking system . 
 The move was interpreted by some economists as a sign that the Fed does n't want the federal funds rate to move any lower than the 8 % at which it has been hovering around during the past week . 
 The closely watched funds rate is what banks charge each other on overnight loans . 
 It is considered an early signal of Fed credit policy changes . 
 `` The fact that they did four-day matched sales means they are not in a mood to ease aggressively . 
 They are telling us that -LCB- 8 % -RCB- is as low as they want to see the fed funds rate , '' said Robert Chandross at Lloyds Bank PLC . 
 The benchmark 30-year bond was quoted late at a price of 101 to yield 7.955 % , compared with 100 to yield 8.032 % Wednesday . 
 The latest 10-year notes were quoted late at 100 to yield 7.937 % , compared with 99 to yield 8.007 % . 
 Short-term rates rose yesterday . 
 The discount rate on three-month Treasury bills rose to 7.56 % from 7.51 % Wednesday , while the rate on six-month bills rose to 7.57 % from 7.53 % . 
 Meanwhile , the Treasury sold $ 9.75 billion of 52-week bills yesterday . 
 The average yield on the bills was 7.35 % , down from 7.61 % at the previous 52-week bill auction Sept. 21 . 
 Yesterday 's yield was the lowest since 7.22 % on July 27 . 
 Here are details of the auction : 
 Rates are determined by the difference between the purchase price and face value . 
 Thus , higher bidding narrows the investor 's return while lower bidding widens it . 
 The percentage rates are calculated on a 360-day year , while the coupon-equivalent yield is based on a 365-day year . 
 Junk bond price climbed yesterday despite skittishness in the new-issue market for high-yield securities . 
 Dealers said junk bond issues on average were up by to point with so-called quality issues from RJR Capital Holdings Corp. and Petrolane Gas Service Limited Partnership posting one-point gains . 
 Petrolane Gas Service 's 13 % debentures traded at 102 , after trading around par earlier this week , and RJR 's 13 % subordinated debentures of 2001 were at 101 after trading at below par earlier this week . 
 Investment-grade bonds were unchanged . 
 Activity was brisk in the high-grade general obligation market , as a series of sell lists hit the Street and capped upward price movement in the sector . 
 Traders estimated that more than $ 140 million of high-grade bonds was put up for sale via bid-wanted lists circulated by a handful of major brokers . 
 There was speculation that the supply was coming from a commercial bank 's portfolios . 
 According to market participants , the bonds were met with decent bids , but the volume of paper left high grades in the 10-year and under maturity range unchanged to 0.05 percentage point higher in yield . 
 Away from the general obligation sector , activity was modest . 
 Long dollar bonds were flat to up point . 
 New Jersey Turnpike Authority 's 7.20 % issue of 2018 was up at 98 bid to yield about 7.32 % , down 0.03 percentage point . 
 The debt of some California issuers pulled off lows reached after Tuesday 's massive earthquake , although traders said market participants remained cautious . 
 California expects to rely on federal emergency funds and its $ 1.06 billion in general fund reserves to meet the estimated $ 500 million to $ 1 billion in damages resulting from the quake , according to a state official . 
 It 's also unclear precisely how the state will rebuild its reserve , said Cindy Katz , assistant director of California 's department of finance , although she noted that a bond offering for that purpose is n't anticipated . 
 Meanwhile , new issuance was slow . 
 The largest sale in the competitive arena was a $ 55.7 million issue of school financing bonds from the Virginia Public School Authority . 
 A balance of $ 25.8 million remained in late order-taking , according to the lead manager . 
 Mortgage securities generally ended to point higher , but lagged gains in the Treasury market because of a shift in the shape of the Treasury yield curve and rumored mortgage sales by thrifts . 
 Premium Government National Mortgage Association securities with coupon rates of 13 % and higher actually declined amid concerns about increased prepayments because of a plan being considered by Congress to speed the refinancing of government-subsidized mortgages . 
 Ginnie Mae 13 % securities were down about at 109 . 
 If the refinancing plan clears Congress , there could be fairly heavy prepayments on the premium securities , hurting any investor paying much above par for them . 
 In the current-coupon sector , a shift in the Treasury yield curve resulting from the better performance of long-dated issues over short-dated securities hurt major coupons because it will become more difficult to structure new derivative securities offerings . 
 Ginnie Mae 9 % securities ended at 98 , up 9 , 9 % 
 % to a 12-year average life assumption , as the spread above the Treasury 10-year note widened 0.03 percentage point to 1.48 . 
 While Remic issuance may slow in the coming days because of the shift in the Treasury yield curve , underwriters continued to crank out new real estate mortgage investment conduits structured when the yield curve was more favorable . 
 Two new Remics totaling $ 900 million were announced by Freddie Mac yesterday . 
 British government bonds ended little changed as investors awaited an economic policy address last night by Chancellor of the Exchequer Nigel Lawson . 
 The Treasury 11 % bond due was down at 111 to yield 10.09 % , while the 11 % notes due 1991 were unchanged at 98 to yield 12.94 % . 
 In Japan , the bellwether No. 111 4.6 % bond of 1998 ended off 0.03 at 95.72 , to yield 5.32 % , and in West Germany , the 7 % benchmark issue due October 1999 ended 0.05 point lower at 99.85 to yield 7.02 % . 
