July 11, 1986

In yet another restructuring move, the Ralston Purina Company announced today that it had agreed to sell Purina Mills, the nation's largest animal feed business, to BP Nutrition Ltd. Ralston, which was founded as a feed company in 1894 along the St. Louis riverfront, declined to disclose how much it would receive from BP Nutrition, the food and agriculture subsidiary of the British Petroleum Company. Alan Greditor, an analyst with Drexel Burnham Lambert Inc., estimated that the price would be around $500 million.

The National Institute on Drug Abuse, saying that the public needs to know more about cocaine, said today that there had been dramatic increases in cocaine-related injuries and deaths in recent years. Reports from medical examiners in 25 metropolitan areas show that 185 cocaine-related deaths were reported in 1981 and 580 in 1984, and that the incomplete count for 1985 stands at 563 and is expected to go higher after all the reports are received. The compilation was made public at a news conference today. Many of those people died of heart problems as a result of cocaine use, and the Government said it issued the statistics because of the publicity resulting from the recent cocaine-related deaths of Len Bias, the University of Maryland basketball star, and of Don Rogers, a defensive back for the Cleveland Browns football team. Both athletes were found to have died of cardiac arrest as a result of cocaine intoxication.

The Economy The Fed cut the discount rate by half a percentage point, to 6 percent, citing a ''relatively slow'' economy and low inflation. The long-awaited reduction was the third this year, and it brought the benchmark lending rate to its lowest level since early 1978. Economists and business executives had been urging the Fed for months to reduce interest rates to revive the economy, which grew at a lackluster rate of just 2.9 percent in the first quarter. But Wall Street economists doubted that the rate cut would lift the laggard economy much; they said another cut would be needed to influence the economy in any signficant way. [ Page A1. ] The credit markets responded moderately to the rate cut, which had been anticipated. Short-term rates fell slightly, but a significant rally failed to materialize. [ D10. ] The dollar declined against most currencies, then fell even further after the rate cut was announced. Gold fell 75 cents, to a late bid of $347.25 in New York. [ D12. ]

A Palestinian who confessed to the murder of Leon Klinghoffer, an American tourist aboard the liner Achille Lauro, was convicted and sentenced today to 30 years in prison for his actions during the ship's hijacking in October. In passing sentence, an Italian jury rejected a prosecution demand that the defendant, Magid al-Molqi, be given a life term, Italy's maximum sentence, for killing Mr. Klinghoffer, a 69-year-old New Yorker who used a wheelchair. Mr. Molqi and two confederates were found guilty of a ''kidnapping for terrorist ends that caused the killing of a person.'' The other two were given prison terms of 24 years and 15 years. Life Terms for 3 Fugitives The jury, however, ordered life sentences for three fugitives - the Palestinian leader Mohammed Abbas and two associates - who were tried in absentia and whom Italian officials acknowledge they are unlikely to apprehend. All were convicted for their role in organizing the hijacking.

Hundreds of inmates at the District of Columbia's sprawling prison complex in nearby Lorton, Va., set fire to a dozen crowded dormitories early today, forcing the temporary evacuation of more than 800 prisoners to more crowded, higher-security cellblocks. Twenty-nine inmates and nine guards were injured, city correction officials said. One prisoner was seriously wounded by gunfire and others were affected by tear gas or hurt by attacks by other inmates, officials said. There were no escapes.