Reagan economic outlook grim By OWEN ULLMANN Associated Press Writer WASHINGTON In an uncommonly pessimistic outlook for 1983, the Reagan administration is predicting the slowest recovery from a recession since World War 11, with unemployment staying above 10 percent. The still-internal forecast, confirmed yesterday by administration sources, is more bearish than nearly all the major private forecasting firms and marks a complete reversal from the administration's decidedly optimistic but wrong economic predictions of the prior two years. In 1981 and 1982, the Reagan administration had been ridiculed by private economists and the financial community for making rosy predictions beyond the range of reasonable expectation. This time, President Reagan's new chief economist, Martin S. Feldstein, has insisted that the Dow Jones average rises to 1,070.92 By The Associated Press NEW YORK Stock prices soared to record highs yesterday in the heaviest trading in two months amid what analysts described as increasing confidence in the outlook for an economic recovery. Buyers flocked to oil, metals, chemical and other basic industrial issues which would stand to benefit especially from a rebound from the recession. The Dow Jones average of 30 industrials jumped 26.03 to 1,070.92, topping the previous closing high of 1,070.55 it reached on Dec. 27. Volume on the New York Stock Exchange came to 129.41 million shares, the ninth largest total ever and the heaviest since a record 149.35 million were traded last Nov. 4. After recent stirrings of life in housing, retailing and auto sales, analysts said many professional investors were growing increasingly convinced that recovery would soon begin to spread through the economy. "People feel they can't wait until there's hard evidence of an improvement," said Hugh Johnson at First Albany Corp., a regional brokerage firm. "They're afraid the stocks will be long gone by then." • One bit of support for recovery hopes was provided by Labor - • a a a .. By MIKE NETHERLAND activity. unattractive sores called lesions. two or three weeks." an address. Collegian Staff Writer The virus, for unknown reasons, Because the public is increasingly more This is when people turn to the University virologist John Dougherty, withdraws through nerve fibers to ganglia . informed about herpes, the lesions cannot marketplace. Profits are, by and large, the who is engaged in herpes experiments and While the human race has long since been near the spine and brain. Thus far, drugs be passed off as a simple acne blemish or best incentive to produce anything. And who analyzes herpes samples from the immunized against the horrors of smallpox designed to kill herpes are not effective with "I don't know what it is." with a potential market of 20 million Ritenour Health Center, is confident that a and the crippling effects of polio, the future when the virus is latent. Many people know what a herpes lesion is Americans and countless others, the profits cure is unlikely. He doubts the effectiveness is bleak for immunization of 20 million ' When conditions are favorable for and, more importantly, they know that are there for the taking. of a proposed vaccine being developed by Americans afflicted with the various strains reproducing or replicating activity some when lesions are present the virus are Ads in nationally circulated magazines researchers of the British drug of the herpes simplex virus. doctors say even stress or changes in contagious. and newspapers solicit everything from manufacturer Burroughs Wellcome, called Efforts to eradicate the virus have met emotional states tend to bring the virus out People are further frustrated when they outright cures and treatments to therapy Acyclovir. with little success. Medical science is of latency the victim panics. finally decide to go to their physician and and encounter services. , The company, located at Research frustrated : by the virus's latency When the virus begins replicating, cells of hear, "I'm sorry. There is nothing lor The companies placing these ads, Triangle Park, N.C., is a unit of the London characteristic —.the ability to go into hiding the genital region and of mucous mebranes anyone can do for you. But not to worry. however, are not open to solicitation and based Wellcome Foundation Ltd. • when conditions do not favor its reproducing / are killed wholesale, building up Your lesions will be completely healed in thus information about them is restricted to Please see RESEARCH, Page 12. - inside Search team alerted • No time for a "Fast Break"? Try "Dough tp Go" Page 3 e We're No.l and all for satellite crash across town and campus, items proclaiming the fact are selling By R. GREGORY NOKES regular diplomatic channels to like hotcakes Page 24 Associated Press Writer express their concern and to try to learn more about the condition of weather WASHINGTON The the satellite and its trajectory. government's Nuclear " it may come Cloudy and turning windy and Emergency Search Team is on down," They say Hughes said. " not Our colder, with occasional snow standby alert to rush to any area information is different and we showers this morning, and a few in the United States where a want to talk about that with them sunny intervals later today. Tern- falling nuclear-powered Soviet spy and of course we want to make peratures will fall after a morning satellite might crash, the State known our concern." high of 32. Partly cloudy windy Department said yesterday. In Moscow, Vladimir and cold tonight with a chance John Hughes, the department Kotelnikov, first vice president of of snow flurries, low of 18. Partly spokesman, said there is a "70 the Soviet Academy of Sciences cloudy and cold tonight, high percent chance" the satellite will and a member of the board of the near 28. Clear and cold tomorrow fall into the ocean. He said the State Committee for Science and night, low in the teens. nuclear fuel probably would burn Technology, told reporters, —by Craig Wagner up in the upper atmosphere and "Look, we are making any danger would be from experiments, operations which index radioactive debris. , Hughes disputed a Soviet claim have been envisaged. There is no Arts 22 danger, we have no alarm about that the satellite was not falling, the fate of this satellite." Comics/crossword 23 While that would be "a happy He made the comment in News briefs 7 development," Hughes said, the answering a question drawn from Opinions 10 • United States believes otherwise. Sports 13 Me said U.S. officials are in a box of questions submitted by reporters at a news conference for State/nation/world 6 contact with the Soviets through .two Soviet cosmonauts. Weekend 20 , the daily administration issue an honest forecast to regain its economic credibility. • The new forecast, prepared as part of the fiscal 1984 budget plan President Reagan will send Congress Jan. 31, predicts the economy after adjusting for inflation will grow at an anemic rate of only 1.4 percent on average for all of 1983, compared with 1982. By comparison, first-year recoveries from the previous seven post-war recessions typically have shown growth rates of 4 percent or more Because economic growth is expected to be so slow, unemployment is predicted to decline only slightly from its current level, now at a '42-year high of 10.8 percent. In early 1981, the administration predicted the economy would grow 4.2 percent'in 1982 and 5 percent in 1983, with unemployment averaging 7.2 percent in 1982 and 6.6 percent in 1983. As it turned out, the economy contracted by The New York Stock Exchange was bustling yesterday as the market surged upward to new record highs. Department figures showing that new claims for unemployment compensation had declined in four of the last five reporting weeks. That gave rise to speculation that monthly unemployment statistics due to be released this morning might show some measure of improvement. Typical of the showing in basic industry stocks was Aluminum Co. of America, the day's most active issue, whieh jumped 2 to 31 1 / 2 in trading that included a 2.5 million- olle • ian share block at that price. Among other metals stocks, Amax gained 1 3 / 4 to 25'/4; Kaiser Aluminum 1 1 / 2 to 17 1 / 4 ; Asarco 2 1 / 8 to 33; Alcan Aluminium 1 3 / 4 to 28 7 / 8 , and Inco 1 to 13. In the chemical group, DuPont climbed 3 1 / 4 to 40 1 / 2 ; Dow Chemical 2 to 29; Hercules 1 1 / 2 to 29 5 /x, and Union Carbide 3 to 56. Among energy issues, meanwhile, a rally that began early this week continued. about 1.7 percent in 1982, the sharpest decline since 1947. At his news conference Wednesday night, Reagan said the economy "is getting better, not getting worse," but he conceded unemployment would be slow to recede. According to the forecast, the jobless rate will remain above 10 percent by the fall of 1983 and above 9 percent in the fall of 1984, when Reagan will be facing re-election should he decide to seek A second term. Reagan, who took office when the unemployment rate was 7.4 percent, had campaigned for the presidency promising to create jobs. Instead, the country has been in a severe recession throughout most of his presidency. According to the forecast, unemployment will not recede to 7 percent until 1988. Volume Shares 147,271,280 Issues Tra 1,961 Up • 1,451 Unchan 208 Down 303 •N.Y.S.E. Index 83.71 + 1.95 •S.&P. Comp. 145.27 + 3.31 *Dow Jones Ind. Ap 1,070.92 + 26.03 Mine fire Highway and natural gas company officials in Centralia, Columbia County, have begun around•the•clock surveillance of state Route 61, where an underground mine fire is threatening a 6•inch gas pipeline and the borough's major thoroughfare. Temperatures in boreholes on both sides of the highway shot past 600 degrees Wednesday, indicating the fire had moved beneath the highway. , 4.4:` Friday, Jan. 7, 1983 Vol. 83, No. 99 24 pages University Park, Pa. 16802 Published by students of The Pennsylvania State University Soviet bloc nations reveal peace plan, call for negotiation BY LARRY GERBER Associated Press Writer PRAGUE, Czechoslovakia The Soviet bloc unveiled an encyclopedic package of peace proposals yesterday calling for an East-West non-aggression treaty and negotiations on virtually every phase of•military activity. Warning that the threat of nuclear war is increasing and that mankind would not survive one, the 24-page declaration adopted by the Warsaw Pact's biennial summit conference Wednesday said: "The Warsaw Treaty member states are not seeking military superiority over the NATO states and have no intention to attack these states or any other country in or outside Europe. "NATO member states also declare that they have no aggressive, intentions. In these conditions there should be no reasons preventing the member states of either alliance to undertake corresponding mutual commitments of the international law character." The declaration appeared to contain no proposals that had not been made at one time or another in the past. But it wrapped up a comprehensive package of Communist ideas for lowering military tension. Its keystone proposal for a non aggression pact, first made by the Warsaw group in 1958 and then rejected by the North Atlantic Treaty Organization, called for the two rival alliances to "conclude a treaty on the mutual non-use of military force and on the maintenance of relations of peace." "The core of the treaty," the declaration continued, "could be the mutual commitment of the member states of both alliances not to be the first to use either nuclear or conventional weapons against each other and therefore not to be the first to use against each other.any military force at all." It said the treaty should also include a commitment not to use force against countries outside the two alliances, that other "interested" European nations could participate in'the drafting and could sign it, and that all other nations of the world could adhere as equal parties. The British and West German governments said they would to study the declaration carefully before commenting. But the French Foreign Ministry said another non-aggression pact was redundant. Turning to individual issues between the Soviet bloc and the Western alliance, the Prague declaration called for: • Immediate adoption by all other nuclear powers of the unilateral Soviet commitment not to be the first nation to use nuclear weapons. • "Resolute activization of , ongoing talks and resumption of interrupted talks on the entire range of questions of ending the arms race, and persevering and patient work to reach agreements on reduction and elimination of weapons, particularly nuclear weapons." • A mutual quantitative freeze on Soviet and American strategic (long-range) nuclear arms and the "maximum possible restrictions on their modernization." o The drafting of a program of stage-by-stage nuclear disarmament and agreements to end the development and production of new systems of nuclear weapons and the production of means to deliver. co Fresh impetus to talks to prohibit all nuclear weapon tests, prohibitanci eliminate chemical weapons, ban neutron weapons, prohibit deployment of all weapons in outer space and prohibit radiological weapons. • New efforts "to substantially lower the present level of conventional arms and armed forces both on a global scale and in individual regions" and to limit the sale and supply of conventional weapons. • "Fresh efforts on an international scale for the dismantling of foreign military bases and the withdrawal of troops from foreign territories." ,;4u"~:~ f s> ; ~~~~: , 4 „
Significant historical Pennsylvania newspapers