World markets rally after Monday's collapse • "ir? pwii. Tokyo, New York, London on rebound NYSE vice-president speaks at HUB By BRAD GIBSON Collegian Staff Writer The New York Stock Exchange's 508-point drop this week is a signal people are questioning whether the bull market is finished, NYSE vice president of business developement said last night. The market will continue to rise back up as it did Tuesday and Wednesday, William M. Earley said. "I do not see any reason why it will not," he said. Earley, a 1969 Liberal Arts grad uate of the University, spoke to a group of about 60 people in the HUB about the spirit of marketing, and took time out to discuss recent stock market developments. Near-collision reports rise by 50 percent By H. JOSEF HEBERT Associated Press Writer WASHINGTON, D.C. The num ber of near-collision reports involving commercial aircraft jumped nearly 50 percent during the first nine months of this year, according to Federal Aviation Administration fig ures. There was disagreement yester day, however, among aviation safety experts on the significance of the increase on air safety. The chairman of the National Transportation Safety Board said the sharp rise in near collisions shows that travelers were exposed to an "increa-ed risk" of an aerial collision during the past summer, but the head of the FAA called the statistical jump "not in itself very meaningful." According to the FAA, the agency received 857 near-collision reports from pilots during the first nine months of the year, a 37 percent increase over last year. The number of such reports involving planes car rying revenue-paying passengers in creased even more sharply from 258 last year to 383 this year, up 48 percent. During the busy summer months June through August there were 159 near-collision reports involving at least one commercial plane, an in crease of 50 percent over the summer of 1986. The sharpest increase 69 percent came in August when there were nearly two such incidents re ported a day, according to the FAA figures. "If you look at near midair colli sions they continued throughout the summer at very high levels," said Jim Burnett, chairman of the NTSB. "Somehow we're going to have to get a handle on that." He said the levels represented "an increased risk" of a mid-air collision to air travelers despite efforts by the FAA during the summer to reduce such risks. But FAA Administrator Allan McArtor said that while the increase during the nine-month period, corn pared to the same months in 1986, is a matter of concern to his agency he does not consider the figures in them selves "very meaningful" because actual collisions continue to be ex tremely rare. "The statistics of near midair colli sions taken by themselves are not good indicators of exposure to risk in the national air system," McArtor maintained in a telephone interview. At the same time, he acknowleged, "We have a very busy air system. We know that. We're taking very aggres sive action to minimize the exposure to risk." He cited agency actions already taken or planned to reduce the mix of commerical and private aircraft and installation of airborne collision-avoidance devices in jetlin ers over the next few years. RUIM*2 index opinion 8 sports 10 weather This afternoon partly sunny but still cold, high 47. Tonight partly cloudy, chance of showers to ward morning, low 33. Friday variable cloudiness with rain showers ending by late af ternoon, high 53....R05s Dickman the daily Consumer spending will be much more cautious because of Monday's record decline, he predicted. The Dow industrials' plunge Monday wiped out 22.6 percent of the index's value a bigger one-day decline than during the crash of 1929. Earley said playing the market takes courage. "Some people have it and some do not," he said. "Some wish they had more," he added. The Dow Jones Industrial Aver age's increase Tuesday and Wednes day is due to companies buying back their own stock, he said. Earley said this purchasing has a two fold effect: it drives stock prices back up and allows companies to regain more control. University retirement plan to get boost By CAROL CHASE Collegian Staff Writer A retirement plan used by two thirds of the University faculty will be worth twice as much as its current value under a bill passed by the state's General Assembly Tuesday. The legislation increases the amount of money the University con tributes to the Teacher's Insurance and Annuity Association/College Re tirement Equities Fund retirement plan from 4.45 percent to 8.95 percent of the employee's gross income. said William J. Walsh, director of the Uni versity salary administration and benefits office. Gov. Robert P. Casey must sign the bill before it will become law. If he approves, it will be retroactive to the 1987-88 fiscal year, Walsh said. Raising the University's contribu tion rate makes the retirement sys tern at the University stable and predictible, he said. Under the TIAA /CREF plan, University employees contribute five percent of their gross income toward retirement. "Adding 8.95 percent from the em ployer will put ( the University ) Collegian His generation is used to market swings of 25 to 50 points, Earley said. In the future, swings of 750 points may not be inconceivable, he said. Yesterday afternoon, James Miles. associate professor of finance, said Monday's record decline will have little long-term affect, and that the market is recovering nicely. Miles said that the market could drop as much as 50 or 60 percent and not cause a national catastrophe sim ilar to the Great Depression of the 19205. - People were 22 percent poorer on Tuesday than on Friday. To them it is a big deal," Miles said. He said he has no idea what caused Monday's crash. smack dab in the middle of the na tional average of 12 to 15 percent.. Walsh said. The plan would keep the University competitive with institutions nation wide. Potential faculty members may base their decision about work ing at Penn State on retirement bene fits. Walsh said. The law would be effective for five years, providing financial security for employees at the University and other state institutions. Walsh said. After five years, the law would be subject to change. he said. Ken Babe. University corporate controller, said the increase will not affect University students' tuition because the extra money has already been planned in the budget. The increase will cost the Universi ty $1.9 million more than the average amount paid yearly to TIAA/CREF since 1974. Frank Forni. University special assistant to the president for govern ment relations, said the bill is going to be very helpful to the University's faculty." Hampton Shirer. associate profes sor of meteorology, said the increase ANllli k Collegian Photo / Jody Stecher William M. Earley will make the University look more University factulty members, is the attractive to incoming professors. State Employee Retirement System. Walsh said TIAA/CREF allows em- Under SERS, employees contribute ployees nationwide to transfer bene- 6.25 percent of their gross income to fits from one university to another. retirement, and the University con- The alternate retirement plan to tributes a rate that is based on em- TIAA/CREF, used by one-third of ployees' salary and length of service. Contributions have varied yearly University contributions toward the Teacher's Insurance and Annuity Association/College Retirement-Equities Fund retirement plan in the past have varied each year, said William J. Walsh, director of the University salary administration and be 'Fits office. University contributions in the pest were based on a rate set by the Slate Employee Retirement System. They were: . 7.83% UlB3 54.0% MIL 6.85% INS . 6.42% SU. 3.60% lOW 4.45% co ions are five percent of gross income; their _ -00110410011110 w re =a the same ender the proposed law. University have fixed at LOS percent of the employee's gross -Ity illMe bill palmed by the General Assembly Tuesday. The was elsteradned by the Public Employee Retirement Study Thursday, Oct. 22, 1987 Vol. 88, No. 72 16 pages University Park, Pa. 16802 Published by students of The Pennsylvania State University = 1987 Collegian Inc. By PETER COY AP Business Writer NEW YORK Investors flocked back to the world's stock markets yesterday, shaking off a trillion-dol lar panic and sending indexes to record gains in New York. London and Tokyo. The Dow Jones industrial average, climbing halfway back from Mon day's historic 508-point collapse, rose 186.84 points to 2.027.85. The index had risen a record 102.27 points Tues day. A partial recovery in New York on Tuesday contributed to record point gains yesterday in indexes on the Tokyo and London stock exchanges. The improved attitude carried over into trading in the United States. "They're bouncing. They're really bouncing," said Andrew Lanyi, ma naging director at Ladenburg, Thal mann & Co. Inc. Analysts speculated that investors may have been pleased by world leaders' response to the market's panic, which erased more than $5OO billion from the value of U.S. stocks and more than $1 trillion from world stocks in 24 hours. The Dow industrials' plunge Mon day wiped out 22.6 percent of the index's value a bigger one-day decline than during the crash of 1929. West Germany took a small step Exiled guerilla calls for end to Salvadoran aid By MAUREEN QUINN Collegian Stall Writer The United States must stop eco nomic support of the El Salvadoran government for peace to come to the war-torn region, an exiled member of the country's opposition forces said last night. . "The only support the president of El Salvador has is from the United States and the huge military and economic support given to continue this war," Ernesto Godoy told an audience of 80 in the HUB. The eight-year old civil war be tween Salvadoran troops and leftist guerilla, or opposition, troops has killed 63,000 Salvadoran citizens and 23,000 government troops, Godoy said. The $5OO million in U.S. aid sent to the Duarte government to date has mostly helped Salvadoran troops, and not the economic crisis racking the Central American nation, Godoy said. One and one-half million dollars per day is given to the Salvadoran gov ernment, yet the country has a 32 percent inflation rate and 50 percent unemployment rate, Godoy added. "In the entire history of the coun try, there's never been a crisis like this," he said, adding that citizen's wages can't cover even basic neces sities. Opposition forces hope to stop the many human rights violations that Godoy said most Americans never hear about. The abductions, killings and detentions of political prisoners are downplayed by the U.S. govern- this week to hold down its interest rates, and President Reagan and leaders of Congress recommitted themselves to whittling away the federal budget deficit. Reagan said yesterday he has not eased his opposition to higher tax rates and his chief budget adviser said flat out that the president "is not going to take a tax increase. - Nevertheless, economists said there was no major news event to account for either the plunge or the partial recovery. Advancing issues outnumbered de clining ones by a 8-to-i margin on the New York Stock Exchange in very heavy trading. That contrasted with Tuesday, when the Dow industrials gained but losers outnumbered gain ers 5-to-2. Stocks also gained on the American Stock Exchange and in the over-the counter market, reversing sharp losses both Monday and Tuesday. "Today it's a much broader rally. You're getting buying from all of the country and the world," said Peter DaPuzzo, head of stock trading for Shearson Lehman Brothers Inc. Some of the money flowing into stocks had probably been in limbo after having been yanked out of the market in the preceding days. Da- Puzzo said. It takes five days to settle a transaction, he said. hoto / Bruce E. Moody Ernesto Godoy ment, which portrays a different image of the Salvadoran government to justify military aid, he said. The Central American Peace Plan signed in August by five Central American presidents. including Duarte, established a favorable con text for each Central American gov ernment. Godov said. Duarte's government had set condi tions before it would speak with thy guerilla forces, he added. but outside pressures have forced the govern ment to negotiate with the rebel group. Godoy said he is sure. with the popular support of the people, that opposition forces can eventually con quer the Duarte troops. Flag to mark completion of hotel exterior An American flag Nv iII be displayed today atop Atherton Hotel on South Atherton Street. marking the end of a year and a half of exterior construc tion at the site. A construction industry tradition calls for the placement of a good-luck object at the top of a new building, said Pam Stewart. head of advertis ing for the Atherton Street Part nership and Atherton Hotel. Following tomorrow's 'topping off . ceremony. construction workers are expected to begin moving away the giant crane that was needed for the exterior stage of construction. Stewart said Atherton Street will be blocked Monday while the crane is dismantled. The project was undertaken by the Atherton Street Partnership and the Hughes Crawford division of K.C. Orr Contractors. Construction will now begin on a fitness room, cocktail lounge, kitchen, dining room and guest rooms. —by Ted Sickler
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