BUSINESS DIGEST
By Unknown Author
Inflation Is Benign As Sales Rise Modestly Consumer prices remained under control in December and for all of 1996. For the year, the core inflation rate, which excludes the volatile food and energy categories, was up only 2.6 percent. Along with an increase of the same size in 1994, that was the lowest core inflation since 1965. Over all, prices were up 3.3 percent in 1996. And the Government's survey of retail sales confirmed what merchants had suggested for weeks: The holiday season produced gains, but they were smaller than retailers had hoped. Sales climbed six-tenths of 1 percent in December, to a level 4.4 percent above that of December 1995. $(Page D2.$) Broad Rally in Stocks The moderate inflation seen in the consumer price report encouraged buying in the stock and bond markets. The Dow Jones industrial average gained 53.11 points, to 6,762.29, its sixth record close in two weeks. Broader indexes also surged. $(D8.$) Bond prices revived after a two-day slump. Yesterday's economic data eased fears that Federal Reserve policy makers would raise interest rates next month. The yield on the 30-year Treasury bond fell to 6.77 percent from 6.85 percent on Monday. $(D18.$) Struggle for Gold Deposit Increases A fierce struggle for control of a rich gold deposit in Indonesia intensified, as Placer Dome proposed a $5 billion stock merger with Bre-X Minerals, which made the find in 1995. Bre-X has a competing offer from Barrick Gold of Toronto. $(D2.$) Acquisition in Chip Industry In a deal that would unite two strong niche makers of semiconductors, KLA Instruments said that it had agreed to acquire Tencor Instruments for $1.27 billion. $(D4.$) Barnett to Buy Leasing Company Barnett Banks agreed to acquire Oxford Resources, the largest automobile leasing company in the United States, for about $570 million in stock. $(D4.$) Digital Wiretap Plan Reduced Scaling back its earlier plans for electronic surveillance in the digital age, the F.B.I. released a new proposal that would make it easier for the bureau to place legal wiretaps on advanced telephone networks, but not with the scope previously contemplated. $(A11.$) Fund Group Accused of Fraud The S.E.C. accused the managers of the Permanent Portfolio family of mutual funds of violating fund investment policies and wrongly billing investors in the funds for thousands of dollars of expenses. $(D20.$) Paper Destruction at UBS Shortly after the Swiss Government ordered its banks to preserve any remaining records of their dealings with Nazi Germany, a suspicious security guard at the Union Bank of Switzerland halted the destruction of a range of World War II-era papers, including some that appeared to document ''forced auctions'' of property in Berlin in the 1930's. $(A1.$) N.C.A.A. Attacks Gambling Ads The National Collegiate Athletic Association has threatened USA Today and a number of other newspapers that it will deny them access to the college basketball championships unless they drop gambling ads that mention college sports. $(A10.$) Shanghai Surprises To American money managers who visit bustling Shanghai, China looks like a tempting place to invest. Yet when they dig beneath the surface, they find that it remains difficult for responsible investors to do so. Even for fund managers willing to stretch the boundaries of their normal investing precautions, China offers precious few public places to park their cash. Market Place. $(D8.$) Chrysler Draws From Cars' Images Chrysler's first corporate ad campaign in four years is continuing with new spots. The new TV ads, created by Bozell Worldwide, describe the genesis of the company's autos, using the tales to make a broader point about Chrysler. Advertising. $(D6.$)