May 4, 1994

Companies Two giant pharmaceutical makers took aggressive steps to help them compete in the rapidly changing market for prescription drugs. SmithKline Beecham is buying Diversified Pharmaceutical Services, a discount drug marketer, for $2.3 billion. And Pfizer is creating a managed health care unit with Value Health. [ Page D1. ] Kodak will sell off noncore businesses like its Sterling Winthrop drug unit and concentrate on its photography operations. [ D1. ] Nynex and Times Mirror formed a joint venture to offer electronic shopping services in the New York City area. [ D1. ] Electronic Arts and Broderbund called off the planned merger between the two software makers. [ D5. ] Kemper will consider putting itself up for sale if its stock does not rise by at least 13 percent in the next year. [ D5. ] What amounts to a real estate merchant bank was formed by Hicks, Muse, Tate & Furst and Donaldson, Lufkin & Jenrette. [ D5. ] Junior bondholders of R. H. Macy oppose two competing reorganization proposals. [ D6. ] I.B.M. won an unusual endorsement from China for its PowerPC chip technology. [ D8. ] Viacom is exploring the sale of Madison Square Garden. [ D20. ] NBC will receive $2.5 million from a foundation to broadcast a special program on health care. [ A1. ] A Federal appeals panel, reversing its own opinion, threw out an author's libel suit against The New York Times. [ A21. ] The Economy Top business executives have contradictory feelings about the Federal Reserve's recent interest rate increases, the latest New York Times/CBS News Poll shows. On one hand, a majority praised the Fed's efforts to control inflation. But a majority also expressed alarm that the rising rates could hurt their sales. [ D1. ] Members of Congress engaged in partisan wrangling over rising rates. [ D2. ] The Government's economic forecasting gauge jumped 0.7 percent in March. [ D1. ] International Ecuador and its creditor banks have reached a foreign debt agreement that will restructure the country's payments on $7.6 billion in debt and overdue interest over the next 30 years. [ D15. ] Business Technology New York City is looking at a waste-disposal technology that a small Italian concern is promoting in Europe and the United States. The process involves shredding garbage, heating it and pressing it into ice-cube-sized bricks, and then steaming the bricks until they emit a gas that can be burned to make electricity. [ D7. ] Markets Stock prices were mixed, with blue chips advancing as a result of late computerized buying. The Dow Jones industrial average gained 13.39 points, to close at 3,714.41. [ D8. ] Treasury prices declined and interest rates rose after a Government report pointed to economic strength. The yield on the Treasury's 30-year bond rose to 7.35 percent. [ D16. ] The dollar continued to fall as traders questioned the Clinton Administration's commitment to defending it. [ D18. ] Coffee prices sprinted to a 2 1/2-year high amid continuing concerns about tight supplies. [ D18. ] Today's Columns Investors in Media Vision Technology learned that it is sometimes risky to believe a profit number before the auditors get through with the books. Floyd Norris: Market Place. [ D8. ] Bartle Bogle Hegarty of London is gambling that it can grow rapidly by helping American marketers explain what makes themselves specially American. Stuart Elliott: Advertising. [ D20. ]

State motor vehicle laws do little to keep thousands of New York City's worst drivers -- speeders and drunks and those who have no licenses at all -- off the road. Officials say the system has long penalized drivers who play by the rules, paying tickets when they get them and showing up for court dates, and has little power to stop those who ignore the laws and continue to drive.

Clinton Defends World Policy In a television program beamed around the world, President Clinton sought to explain why it has been so hard for him to take action in trouble spots like Haiti and Bosnia. Page A12. Unresolved: Suicide Debate Dr. Jack Kevorkian's acquittal has settled his legal status, but the debate over assisted suicide remains unresolved on many fronts. Page A16. Mostly Mozart No More? At Lincoln Center, there is talk of eliminating the Mostly Mozart Festival, which is to have its 28th season this summer. Page C15. Close (Budget) Call in Orbit Pentagon officials were ready to close down Clementine, a low-budget spacecraft that mapped the Moon, with its mission half done. But they relented under pressure. Page A18. Mixed Review on Rates Top business executives have contradictory feelings about recent interest-rate increases, a New York Times/ CBS News poll shows. Page D1.

Continuing the rapid change in the prescription drug industry, two of the world's largest pharmaceutical manufacturers announced moves yesterday to help them compete in the evolving environment of lower-priced drugs. SmithKline Beecham, a British-American company based in London, said it had agreed to buy Diversified Pharmaceutical Services, one of the largest marketers of discount-priced drugs to managed health care companies, for $2.3 billion in cash.

Prime Minister Yitzhak Rabin of Israel and Yasir Arafat, the chairman of the P.L.O., agreed early this morning on the final details of Palestinian self-rule in the Gaza Strip and in Jericho, clearing the way for a signing ceremony later today. "Everything is solved," said Nabil Shaath, the chief Palestinian negotiator. "Everything is agreed."