October 29, 1993

The economy perked up during the summer, expanding at a 2.8 percent annual rate despite floods and drought that cut farm output, the Commerce Department reported today. At the same time, inflation subsided to a 1.8 percent annual rate, the weakest rise for a quarter since oil prices collapsed in 1986.

The enforcement staff of the Securities and Exchange Commission has recommended civil action against at least five former and current executives of Prudential Securities, including three top former retail executives, people with knowledge of the inquiry said yesterday. The five executives have been informed by S.E.C. lawyers that the commission staff is recommending charges that they failed to insure that brokers under their supervision complied with the Federal securities regulations, people involved in the case said. As many as a dozen former and current Prudential executives are under S.E.C. investigation, other people in the case said. None of them is a part of Prudential's current senior management.

IN the next two weeks, the attention of the New York art world shifts away from the galleries and the museums and toward the auction houses during the fall sales of Impressionist, modern and contemporary art. This twice-a-year ritual, some of the best free theater in town, offers a variety of entertainment this season. Among the offerings, which go on view this weekend at the auction houses, are everything from the experimental to revivals, as paintings, sculptures and drawings with estimates totaling more than $207 million appear for the art market's autumn pulse-taking. The usual pre-auction anxiety is evident as collectors, dealers and experts from all over the world flock to Sotheby's and Christie's to see works by artists ranging from Picasso and Renoir to Gorky and Hockney. Just how the market will fare in these economic times is the question everyone is asking. While this fall's auction catalogues are much leaner than those of the boom years in the 1980's, and the atmosphere is noticeably sadder, the experts who put the sales together are also far wiser.

The Federal Bureau of Investigation is reviewing the allegations of an informer who said after the World Trade Center explosion that he had warned law-enforcement agents of a plot to build a bomb, and that if they had worked with him, they would have prevented the blast, officials said. But some officials disputed important parts of the informant's account yesterday, saying that conversations with him took place half a year before the attack on the trade center, and months before the bomb was actually built.

Three days after Senator Bob Packwood warned that releasing his diaries would embarrass other senators, the chairman of the Senate Select Committee on Ethics said today that the diaries suggested that Mr. Packwood might have been involved in criminal activities. The chairman, Senator Richard H. Bryan, Democrat of Nevada, did not say what is in the diary, what accusations are under investigation or how serious they may be. But his assertion was the first indication that the ethics panel was looking into possible criminal wrongdoing by Mr. Packwood that was unrelated to the initial reasons for the ethics inquiry, accusations of sexual misconduct.