May 9, 1997

New York City Housing Authority, facing staunch opposition from public housing tenants and their advocates, retreats from plan to seek waiver from Federal regulations that restrict rents it charges, kind of people it houses and way it spends huge but shrinking Govt subsidies; waiver would have been used experimentally in 16 of city's 341 housing projects only to train and place welfare tenants in jobs, enabling them eventually to become more self sufficient and pay more rent; Ruben Franco, authority chmn, insists that tenant fears that authority would have used waiver to raise rents, evict residents or sell, demolish or privatize some projects that house large numbers of impoverished welfare recipients were based on rumor and misinformation (M)

Stock Market Ends Higher, But Early Gains Are Pared After a big drop the day before, the stock market roared back, only to give up much of its gains late in the session. The Dow industrials, up nearly 130 points during the day, closed up 50.97 points at 7,136.62. The Nasdaq composite closed up 7.92 points at 1,330.83. Technology stocks did particularly well, with I.B.M., Intel and Microsoft all gaining. $(Page D6.$) Mutual fund investors, apparently unfazed by the stock market's rampant volatility, added some $13.5 billion to equity funds last month. And in recent days, it appears that investors have further stepped up their fund purchases. Market Place. $(D6.$) Treasury prices rallied, with the 30-year bond yield falling to 6.93 percent from 6.96. $(D13.$) Retailers Report Sluggish Sales Running counter to recent buoyant economic statistics, retail sales have been sluggish. The Goldman, Sachs Retail Composite Index rose 3 percent in April from a year earlier. Companies operating low-priced stores, like Ross and TJX, did better than owners of expensive stores, like Saks Holdings and Neiman Marcus. $(D4.$) China May Buy Hong Kong Stake China's two state-owned telecommunications providers are interested in acquiring 15 percent of Hong Kong's largest telephone company, investment bankers said: 7 percent from Cable and Wireless, the company's majority owner, and 8 percent from Citic Pacific. $(D2.$) Possible U.S. Trade Victory The European Union's ban on hormone-treated beef is illegal, a World Trade Organization panel has decided in a preliminary ruling, potentially giving the American cattle industry a victory but turning over new ground on issues of national sovereignty. $(A1.$) Thousands of banana farmers in the Caribbean find themselves at the center of another trade dispute between the United States and the European Union. The World Trade Organization has issued a preliminary ruling that a policy of guaranteeing Caribbean banana farmers special access to the European market is an unfair restriction on American companies like Chiquita that produce bananas in Central and South America. $(A6.$) Sony Reports Tenfold Profit Surge Sony's quarterly earnings surged more than tenfold, helped by the weak yen and sales of its Playstation video game. $(D2.$) A Recommendation Against Drug An F.D.A. advisory panel recommended against approval of Cephalon's drug, Myotrophin, for the treatment of Lou Gehrig's disease. $(D2.$) Bre-X Gets Court Protection Bre-X Minerals was granted protection from creditors as it prepares for liquidation after being accused of perpetrating the biggest mining fraud in history. $(D2.$) Simmons Rejects Settlement Harold C. Simmons, the Dallas investor, said that he had refused a $50 million settlement proposed by two of his daughters, who have sued for control of his corporate empire. $(D6.$) I.B.M. to Buy Out Sears in Venture I.B.M. said that it would buy the 30 percent stake in Advantis -- a networking services joint venture with Sears, Roebuck -- that it does not already own, for $450 million. $(D13.$) United Paramount Chief to Leave Lucie Salhaney, the chief executive of United Paramount Network, a fledgling television network, said that she had decided not to renew her contract this fall. $(D3.$) Small Retreat on Privacy Policy Giving ground on the Clinton Administration's computer-data privacy policy, the Commerce Department said that it would begin in some cases to allow export of the most powerful data-scrambling technologies when used for securing transactions. $(A17.$)

Applebee's International Inc has become nation's largest and fastest-growing casual-dining chain in terms of number of stores and is among largest and fastest growing in revenue and earnings; Applebee has sales of $1.5 billion and operates more than 840 restaurants in 45 states, primarily in towns and sprawling suburbs in Midwest and South; company plans to double in size within five years, opening at least 135 restaurants this year; although Applebee's has expanded and its sales have increased, its same-store sales, or sales at restaurants open more than a year, have gone flat; table; photo (L)

Roberta Smith comment on art scene in New York City's SoHo, which continues to be lively and intense despite exodus of some high-end galleries to Chelsea; reviews work of artists at several current shows: Elizabeth Murray at Pace Wildenstein, Nancy Burson at Ricco-Maresca, Mark di Suvero at Gagosian, Sean Landers at Andrea Rosen, Kyle Staver at Bowery, Edward Ruscha at Leo Castelli, Gilbert and George at Sonnabend and Lehmann Maupin, Fred Tomaselli at Jack Tilton, Nedko Solakov at Deitch Projects, Joseph Kosuth at Sean Kelly, Eve Sussman at Bronwyn Keenan and group show at Kenny Schachter; photos (M)

Mayor Rudolph W Giuliani proposes $33.5 billion election-year budget that, for first time in his tenure, calls for increase in spending and in size of municipal work force; much of new money would go to education and other services for children; says rebounding local economy is generating new tax revenues that helped him shape budget that is less austere than his other budgets; proposes that city increase its spending by roughly 2 to 3 percent--or $700 million to $1 billion--and calls for $284 million in new tax cuts, including elimination of city's 4 percent sales tax on clothing under $500; proposes increase of 2,644 municipal employees, to 202,730, mostly because of hiring at Board of Education and Administration for Children's Services; graph; photo (M)

Whether machine or man ultimately wins rematch between IBM computer Deep Blue and world chess champion Garry Kasparov, it is probably just matter of time before computer prevails; what is far less certain is just what to make of such victory; computer's inhuman ability to consider 200 million chess positions in time it takes to furrow eyebrow has enabled it to hold its own against Kasparov, and after four games they are deadlocked; IBM scientists describe Deep Blue as 'glorified calculator' that is less 'intelligent' than even stupidest human; Kasparov describes it as though it is intelligent (M)

US Court of Appeals ruled last fall that villagers of Venetie, Alaska, have right to tax businesses on their land because it qualifies as 'Indian Country' much like reservations in lower 48 states; challenge that Venetie set into motion has such mammoth implications that State of Alaska has apportioned $1 million for appeal to US Supreme Court; state officials say at stake is ability to tax and regulate not only Venetie's territory but also total of 44 million acres of native-owned land--or more than tenth of Alaska; photos (M)

Lebanon's Christians, now less powerful and privileged than at any time since country was created, are anxiously awaiting visit by Pope John Paul II on May 10 and 11; Pope is expected to hail Lebanon's spirit of reconciliation after so many years in which country was torn apart by Christian-Muslim civil war; under agreement that ended war in 1990, Christians now hold half seats in Lebanon's 108-member Parliament and have permanent claim on presidency; rest of legislative body and top political posts are divided between Sunni and Shiite Muslims; arrangement is artifice, obscuring fact that Christians have become small and shrinking minority, with population now estimated at no more than 30 percent of Lebanon's four million people; map; photo (M)

House votes 286 to 132 to offer states $1.5 billion to fight juvenile crime if they change their laws and require that young people accused of violent crimes in state courts be tried as adults; votes to toughen penalties against relatively few juveniles convicted in Federal courts of violent crimes; Senate still has to take up bill, which is supported in general by Clinton Administration (M)

US Airways follows through on recent warnings that it might start shrinking airline by announcing that it will cut jet service to nine cities, close some unneeded operations, ground 22 planes and lay off some pilots; carrier has been negotiating with Air Line Pilots Association for more than a year, but says it has seen little progress (L)

New Jersey stands to get extra $32 million in Federal highway money under measure that was approved by United States Senate; windfall is share of $1 billion in Federal gasoline tax collected that surpassed initial projections (S) (New Jersey Daily Briefing)

Residents of Penns Grove, NJ, hometown of actor Bruce Willis, express dismay that Willis has abandoned his plan for a $50 million riverfront development that they hoped would revitalize their financially distressed municipality; Willis spent about $1 million in 1995 to buy 11 acres along Delaware River and said he planned to build on it; photos; map (M)