December 12, 1996

Air Force inquiry clears Brig Gen Terryl J Schwailer, who was in charge of military housing complex in Dhahran, Saudi Arabia, when 19 Americans were killed and 500 wounded in terrorist attack in June '96; says he took reasonable steps to protect against attack and should not be punished in any way; contradicts major conclusion of separate Pentagon investigation that singled out Schwailer for blame; concludes that none of 10 officers responsible for safety of troops violated any laws, Air Force regulations or codes of conduct; photo (M)

U.S. and Europe Agree On Technology Trade Deal The United States and the European Union reached agreement on a deal to liberalize trade in information technology, paving the way for a broader pact incorporating most of the world's big trading nations. After several days of intense negotiations at a meeting of the World Trade Organization in Singapore, the United States and Europe resolved a host of differences over a proposal to eliminate tariffs within three years on computers, software, telecommunications equipment and other products. $(Page A1.$) VW Executive Charged in Germany German prosecutors have indicted Jose Ignacio Lopez de Arriortua, the former General Motors executive who switched to Volkswagen, on charges of embezzlement and theft of confidential documents from G.M., the auto makers said. $(D9.$) Bond Market in Big Slump The prices of Treasury securities dropped sharply yesterday amid concern that interest rates could rise if foreign investors slowed their buying. The yield on the 30-year Treasury bond, which rises when the price falls, increased to 6.62 percent from 6.49 percent, despite favorable reports on inflation and a drop in oil prices. $(D20.$) The Producer Price Index was up only four-tenths of 1 percent last month, even less when volatile energy costs were excluded. $(D2.$) The price of crude oil fell sharply for a third consecutive session on signs that supplies appeared to be more ample just as Iraq was beginning to export oil. $(D17.$) Microsoft's Latest Deal Microsoft and Pointcast have become allies in the fast-growing area known as Internet broadcasting. In return for a featured position in Microsoft's operating system software, Pointcast, a customized information provider, will embrace Microsoft technology and distribute the MSNBC news service. $(D4.$) More Women Hold Directorships Women passed a milestone in the board room in 1996, for the first time holding more than 10 percent of the directors' seats at the nation's 500 largest companies, a survey showed. $(D4.$) Du Pont Farms Out Its Computing Du Pont joined a growing list of companies that have contracted out their computing operations to giant technology-service specialists. $(D4.$) Answering a Rage to Spend Fueled in part by sharply rising incomes of the wealthiest Americans and a rise in the number of people in their peak earning years, luxury goods are selling at a growth rate faster than that for goods and services as a whole. $(A1.$) A Live Big Board Ticker for TV The New York Stock Exchange has made a deal with CNNFN to transmit its ticker live instead of on a delayed basis; the service will be offered to other television channels as well, exchange officials said. $(D8.$) Panel Supports Diabetes Drug An advisory panel recommended that the Food and Drug Administration approve a new type of diabetes drug that could help some diabetics reduce or stop their daily insulin injections. The drug, Rezulin, is being produced and tested by the Parke-Davis division of Warner-Lambert. $(A25.$) Fight Over Tobacco Ads in Canada The Canadian Parliament is on the brink of endorsing stringent curbs on cigarette marketing, but tobacco companies are sure to fight back. Advertising. $(D8.$)

New York State Gov George Pataki, one week after Republican leader in State Senate Joseph L Bruno called for ending most rent regulation by mid-1999, calls that plan too hasty and says he will push for more gradual approach; Pataki says that he still favors general phasing out of rent control and rent stabilization laws provided that it is done in carefully reasoned manner (M)

Department of Veterans Affairs acknowledges that it waited more than five years to begin major research studies on health effects of exposure to low levels of chemical weapons because of Pentagon's repeated--and inaccurate--assurances that there was no evidence that American troops had been exposed during Persian Gulf war in 1991; acknowledgement comes in Congressional hearing, at which lawmakers accuse Pentagon and veterans organization of ignoring accounts of ailing war veterans who reported chemical alarms sounded throughout war, and that chemical detections were ignored by American commanders (M)

US investigators conclude that Pedro Antonio Andrade, former commander of El Salvador's leftist guerrilla army, was given visa to enter US despite certainty among intelligence officials of his involvement in killings of six Americans in 1985; say American officials violated no laws or regulations in allowing Andrade to settle in New Jersey, but strongly suggest he may have been deliberately slipped under radar of officials in Washington who had sought to block his entry because of evidence he helped plan attack in which four US marines, two businessmen and seven Salvadorans died; Sen Richard C Shelby, who commissioned inquiry, criticizes report as incomplete; says it raises more concerns than it answers; other officials comment; photo (M)