2- The Michigan Daily - Wednesday, October 29, 1997
NATION/WORLD
Dow
rebounds
on da ofd
bargins
The Washington Post
Stock prices on Wall Street came roar-
ing back yesterday, in a dramatic day of
trading marked by wild swings in prices,
record-shattering volume and a rush by
investors to buy stocks at bargain prices.
Yesterday's 337-point gain by the
Dow Jones industrial average was the
.jrgest in history, wiping out nearly
two-thirds of Monday's record losses.
In percentage terms, it was a more mod-
est 4.7 percent gain - still a relief to
traders who had feared another free fall.
Wall Street's rebound came at the end
bf a global trading day when most of the
" world's markets had been buckled by
heavy selling pressure. The U.S. markets'
resilience may halt, at least for the
moment, the wave of panic selling that
began last week in Asia and has been
::everberating on world markets since.
The abrupt turnaround in sentiment in
,he United States sparked a relief rally in
} ,early trading overseas. Tokyo's Nikkei
225 stock index jumped 2.77 percent in
the first half hour of trading Wednesday
morning. Analysts expected selling pres-
sure to ease in other markets, too.
AROUND THE NATI K
Clinton urges crackdown on schools
CHICAGO _ President Clinton yesterday firmly called on all
public schools to end the "social promotion" of poorly perform-
ing students, even as his conflict with Congress over voluntary
national education standards neared a turning point.
Clinton endorsed a pioneering program under which the city
of Chicago has tested tens of thousands of students for promo-
tion and held back unprecedented numbers who failed to meet
academic standards.
At the same time, Clinton directed the Education Department
to help other school districts replicate another cornerstone of the
Chicago reform: aggressive intervention by local school offi- Clinton
cials to seize control of failing schools.
"I want what is happening in Chicago to happen all over America,' Clinton said
in an appearance at an elementary school here. "I challenge every school district
to adopt high standards, to abolish social promotion, to move aggressively to help
students make the grade through tutoring and summer schools, and to hold schools
accountable for results...."
Clinton's embrace of the Chicago reforms sharpened lines in a dispute over education
standards setting him against both liberal Democrats and conservative Republicans.
AP PHOTO
Traders celebrate a comeback day on Wall Street outside the New York Stock Exchange after the close of trading yesterday.
The stock market roared back yesterday from its worst drop since the 1987 crash with a record-breaking point gain.
As Americans woke yesterday, televi-
sion and radio carried the ominous
news that Hong Kong's stock market
was down nearly 14 percent, Tokyo's
was down 4.3 percent and London's
was down as much as 9 percent.
So great was the apprehension that
Wall Street would see a similar blood
bath that when the opening bell sound-
ed at 9:30 a.m., there was a massive
Hong Kong's stock
market plummets
HONG KONG - Panic selling sent Hong Kong stocks crashing to their biggest
point loss ever yesterday, with the blue chip Hang Seng Index losing 13.7 percent
of its value and triggering another global market sell-off felt throughout Asia and
Europe.
The Hang Seng closed 1,438 points down, after massive selling sent the index
crashing through the 10,000-point barrier, ending the day at 9,059. It was the worst
day yet in a series of sharp market declines that have sent the Hang Seng down an
incredible 45 percent since its August peak.
"It's a nightmare;' said David Robinson, vice president of Sofaer Capital, a local
x .hedge fund. "It's basically bears - stampeding bears. Everything in the whole
(expletive) world is down. I've been creamed today. I've been crucified."
With the local market in turmoil -- and some personal fortunes now at risk of
,bging wiped out - all eyes here turned to Hong Kong's wealthiest tycoons, the
,property barons, as anxious investors waited to see whether and when the local bil-
libnaires would decide the market had dropped far enough to begin buying up dis-
counted shares.
trading imbalance. So many people
were trying to sell and so few wanting
to buy that trading in many stocks
couldn't open. The Dow industrials
plunged 189 points, falling through the
7,000 mark.
"The opening wasn't as bad as I
thought it would be, it (was) worse,"
said Bob Fagenson, a 27-year member
of the New York Stock Exchange.
STOCKS
Continued from Page 1
OK."
However, Martinez said he is not
completely confident that his stocks
will continue to be stable.
"If it keeps falling, then I'll worry,"
Martinez said.
Some students who invest in the
stock market found a bright side to Wall
Street's drop.
"Every time the market drops, I see it
as a good time to buy," said LSA senior
Perry Ballard. "But I'm still holding out
for the Fed to raise the interest rates."
The crash "did not have a tremen-
dous effect" because his portfolio con-
tained stocks of many small companies,
Ballard said.
"The 500 points is for some of the
larger companies," Ballard said.
The dramatic decrease in the
Then, at 10:30 a.m., IBM
announced that it would spend as
much as S3.5 billion to buy back its
own stock, which had fallen 15 per-
cent in price in recent days. The con-
fident move by the giant computer
maker - backed by a chorus of Wall
Street strategists recommending that
clients get back into stocks - firmed
the tone of the market.
value of stocks in Hong Kong and
the Southeast Asian economy was
one of the major causes of the mar-
ket crash.
"Hong Kong had some problems
with the exchange rate," Nimalendran
said. "I don't think anybody in the U.S.
expected this to happen."
The Dow's drop Monday triggered
two circuit breakers on the New York
Stock Exchange that had never been
set off since they were installed after
the 1987 crash. The first circuit
breaker, at 350 points, closed the
market for 30 minutes. The second,
at 550 points, halted trading for the
day.
Nimalendran said that while the
stock market's future cannot be predict-
ed, it is inevitable that "there will be a
lot of volatility."
-The Associated Press contributed to
this report.
Brain may trigger
religious response
NEW ORLEANS - No one knows
why humanity felt its first religious
stirrings, but researchers at University
of California at San Diego, reported
yesterday that the human brain may be
hard-wired to hear the voice of heaven,
in what researchers said was the first
effort to directly address the neural
basis of religious expression.
In an experiment with patients suf-
fering from an unusual form of epilep-
sy, researchers at the UC San Diego
brain and perception laboratory deter-
mined that the parts of the brain's tem-
poral lobe - which the scientists
quickly dubbed the "God module" -
may affect how intensely a person
responds to religious beliefs.
People suffering this type of seizure
have reported mystical and religious expe-
riences as part of their attacks but are pre-
occupied with mystical thoughts between
seizures. That led this team to use these
patients as a way of investigating the rela-
tionship between the physical structure of
the brain and spiritual experiences.
In an experiment, researchers deter-
mined that patients' seizures strength-
ened involuntary response to religious
words.
Congress abandonO
border drug plans
WASHINGTON - An ambitious
proposal to enlist 10,000 U.S. soldiers
in the war against drugs on the
Southwest border has died a quiet death
on Capitol Hill, the victim of continu-
ing disagreement over whether the
Pentagon should have any role in fight-
ing the Mexican narcotic cartels.
The proposal, which twice won o
whelming support in the House, was
never embraced by the Senate. It was
stricken late last week from a conference
committee report agreed to by Senate
and House negotiators on the 1998
defense authorization bill.
Yesterday, the House passed the bill
without the amendment to vastly
increase the U.S. military presence on
the border.
AROUND THE L
,.MILLER
iContinued from Page 1
lion.
"That's really just basic repairs on a
building that hasn't been touched in 60
years,' Muir said.
Bollinger also said he wants to put
Money into renovating all the campus
libraries because they were overlooked
by the campaign's fundraising efforts.
"These are our commons;' Bollinger
said. "They don't fall within the pervue
of any particular school, and I think that
as a university, we need to pay special
attention to them."
University Planner Fred Mayer said
advancement in computer technology,
as well as normal wear and tear, make
the campus libraries good candidates
for renovation.
"Any building that has been sitting
around and has been used as much as
the libraries needs renovation," Mayer
said, adding that the Harlan Hatcher
Graduate Library is in particular dire
straits and hasn't been refurbished since
the early 1970s.
CHINA
Continued from Page 1
China's energy shortages could
become critical as its economy grows
over the next decade, and the government
plans already to invest billions in new
generating capacity. China has been a net
importer of petroleum since 1993, a gap
that seems certain to grow as the coun-
try's 1.2 billion people spend part of their
rising incomes on automobiles. At pre-
sent, only about 3 million automobiles
circulate in the country.
Secretary of State Madeleine
Albright and other officials have been
telling the Chinese that as their need for
oil rises, so will their interest in politi-
cal stability in the Persian Gulf and
Caspian Sea regions. The United States
has charged that Chinese sales of
weapons technology to Iran and else-
where is a destabilizing influence.
SeciaI Progranms pt
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.41,,ALIL n"
"We all face a common danger from
Iran in terms of their potential develop-
ment of missiles," Albright said yester-
day in an interview with Washington
Post editors and reporters. "In terms of
China, in terms of being dependent for
their energy supply on that region, that
potentially is dangerous."
Chinese restraint on proliferation, in
turn, is expected to lead Clinton to cer-
tify that China is no longer supplying
nuclear technology to Iran. By issuing
that certification, the president would
clear the way for U.S. nuclear power
reactors to compete in the Chinese mar-
ket, potentially reducing the trade
deficit as well as increasing China's
interdependence with the United States,
a cherished administration goal.
The Clinton administration has been
lobbied by the American nuclear power
industry to allow sales to China, poten-
tially bringing billions of dollars to U.S.
nuclear firms.
"The Chinese very much want to have
access to U.S. nuclear technology, which
is still the safest in the world," a senior
administration official said yesterday.
China has been purchasing nuclear equip-
ment from France, Russia and Canada,
but officials believe China would prefer
U.S. technology if it were available.
Because Chinese cities and industrial
areas are suffocating in some of the
world's most polluted air and will need
to burn still more coal to produce more
electric power, Jiang has agreed to an
energy and environmental partnership,
to be signed this afternoon, that could
lead to increased U.S. sales of non-pol-
luting energy-generating equipment,
senior officials said.
"What's already destined to happen
is a massive increase in the consump-
tion of coal," a senior administration
official said. "Their scientists have
understood where this is heading."
Energy Secretary Federico Pena and
Chinese officials will sign today an
agreement to activate an energy and
environmental partnership proposed by
Vice President Gore when he was in
Beijing in March.
Under the partnership, the United
States will seek to persuade the Chinese
to purchase U.S.-made pollution control
equipment, energy efficiency technology
and clean-burning coal-fired generators.
l ii
,V7
Mexican ambassador
to improve relations
MEXICO CITY - An economist
who belongs to a prominent Mexican
political family was sworn in as ambas-
sador to the United States on yesterday
and vowed to improve prickly relations
with the U.S. Congress.
Jesus Reyes Heroles, 45, a former
energy minister, also declared that his
government would spend more money
to help Mexican migrants in the United
States.
"The policy is to intensify the efforts
to protect our countrymen," he told
reporters.
Reyes Heroles takes on Mexico's
most important ambassadorial post at a
time when relations have sagged from
their heights of a few years ago. Under
former President Carlos Salinas de
Gortari, Mexico dramatically opened
its economy and pursued a closer rela-
tionship with the powerful neighbor it
had long mistrusted.
But during their nation's 1994-96
economic crisis, Mexican authorities
turned inward, analysts say. And while
President Ernesto Zedillo enjoys a
good relationship with President
Clinton, Mexico has been assailed
repeatedly in the U.S. Congress fo s
inability to curb drug traffick.
Mexicans also have smarted as
Washington has cracked down on
migration.
Poland working to
improve air quality
ZAKOPANE, Poland - The beat is
on in Eastern Europe to clean the airo
water - to prepare for talks in eb
on accession to the European Union,
and, in Poland's case, partly in hope of
becoming the first ex-Communist coun-
try to host an Olympics.
Poland has emerged as a leader in
improving air quality in a region that
was devastated during the Communist
era by pollutant-belching industries. Its
effort in southern Poland includes a
multi-million-dollar geothermal pro-
ject to sweep this valuable tourist*
clean of sulfur dioxide.
- Compiled from Daily wire reports.
Urtn
':
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