August 7, 1989

LEAD: The indictments last week of dozens of traders at the Chicago Board of Trade and the Chicago Mercantile Exchange, the nation's two largest commodity exchanges, signaled an important expansion in the use of the Racketeer Influenced and Corrupt Organizations law, known as RICO. Legal experts expect the new application to spill over into other prosecutions of white-collar crime.

LEAD: The Pentagon is ending its two-decade shuttle collaboration with NASA because it considers manned spaceships too risky. Page A13.

LEAD: The airline industry is short of experienced mechanics, largely because it must cope with aging fleets and is rushing to accommodate more travelers.

LEAD: The captors of an American hostage offered today for the first time to free him immediately, but only if Israel released a kidnapped Shiite Muslim cleric and 450 Arab prisoners.

LEAD: After months of discussion and wrangling, top executives at The Philadelphia Inquirer and The Philadelphia Daily News and their parent company, Knight-Ridder Inc., reached an agreement in principle last week on a new five-year plan for the papers. It was not easy.