October 11, 1984

The Caterpillar Tractor Company announced today that it would slash its quarterly dividend to 12.5 cents, from 37.5 cents. It also said it would freeze hiring, accelerate plant closings and pare manufacturing capacity and production schedules. In addition, Caterpillar said it expected a loss for the fourth quarter ending Dec. 31. On Sept. 13, it predicted losses for the third quarter and the year. Caterpillar, one of the world's largest producers of earthmoving, construction and materials- handling equipment, lost $345 million in 1983, on sales of $5.42 billion.

Vice President Bush and his Democratic rival, Geraldine A. Ferraro, will debate in Philadelphia Thursday night in an event that has taken on new importance as the two campaigns try to improve on the results of last Sunday's Presidential debate. Strategists on both sides say that while the election will turn on Presidential preferences, the outcome of the first and only Vice-Presidential debate of the 1984 campaign could further alter the dynamics of the race at a time when some voters could be ready to reassess their feelings toward President Reagan and his Democratic challenger, Walter F. Mondale. In the wake of the first Presidential debate, which rejuvenated Mr. Mondale's candidacy and left the Reagan campaign in a defensive posture, Mr. Bush is under pressure, as one Republican strategist put it, to ''win one for the Gipper'' and slow the opposition's new- found momentum. Political anaylsts say the performances turned in by Mr. Bush and Mrs. Ferraro could have a greater effect on their own political futures than on the outcome of this year's Presidential contest. Unlike Mr. Reagan and Mr. Mondale, who will debate again on Oct. 21, the Vice-Presidential candidates will not get a rematch. The impression each makes in 90 minutes before a national television audience that night could shape the political identity of each debater more than anything they do on the campaign trail.

THURSDAY, OCTOBER 11, 1984 Companies Caterpillar Tractor said it would cut its dividend , freeze hiring, accelerate plant closings and pare manufacturing capacity. The company, one of the world's largest makers of heavy equipment, linked the cost-cutting efforts to increased competition, the industry's overcapacity and high interest rates. Caterpillar also predicted a loss for the fourth quarter; it had earlier forecast losses for the third quarter and full year. (Page D1.) The Government will drop some charges against a former reporter for The Wall Street Journal. The charges were based on the novel legal theory that the reporter breached his duty to his readers by failing to disclose that he traded in the securities about which he wrote. The reporter and two others, however, still face Federal charges of securities fraud and conspiracy. (D1.)

For several years, the world's steelmakers have felt that they were in a bottomless pit, dug by excess capacity and deepened by falling demand. But the dozens of steel executives who assembled here this week for the annual conference of the International Iron and Steel Institute, seemed to feel they had reached bottom and were coming up again. The steelmakers at the conference, which ended today, are still plagued by worldwide overcapacity, which is depressing prices and decimating profits, and are concerned about protectionist pressures. But there was a distinct note of optimism at the gathering, which included steelmakers from both developing and industrialized nations. ''I think we will find not too far away a new balance between supply and demand,'' said Jacques P. Michel, associate director general of Usinor, France's largest steelmaker. An optimistic estimate, he said, ''will be in just two or three years, but maybe it will take several more.''

Secretary of State George P. Shultz today warmly praised the offer by President Jose Napoleon Duarte of El Salvador to meet guerrilla leaders next Monday. After meeting here with Mr. Duarte for two hours, Mr. Shultz said that ''the United States was delighted to support'' the peace initiative. Earlier, when he arrived for a four- hour visit, the first stop on a three-day trip to Central America, Mr. Shultz said that Mr. Duarte's initiative ''has our unqualified support.'' 'Power Is Not at Stake' Mr. Duarte, after the meeting with Mr. Shultz, said that his talks with rebel leaders next week would ''not involve power-sharing.''