February 8, 2002

Credit-rating agencies, independent securities analysts that pass judgment on company's financial fitness, saw signs of Enron Corp's deteriorating finances last May, but agencies--Moody's Investors Service, Standard & Poor's and Fitch Ratings--did little to warn investors until at least five months later, long after more problems had emerged and Enron's slide into bankruptcy had accelerated; role of ratings agencies, which are unregulated and consider themselves publishers rather than self-regulating professionals like accountants or lawyers, has come under scrutiny since Enron filed for bankruptcy protection in December; Arthur Andersen chief executive Joseph F Berardino says Congress should examine actions of agencies, saying that they 'played a significant role' in Enron's failure; Securities and Exchange Commission chairman Harvey L Pitt has testified that agency is 'looking at how rating agencies perform,' given their 'enormous impact on the stock market'; graph (M)

Air Canada reports fourth-quarter net loss of 380 million Canadian dollars ($236.9 million) compared with loss of 274 million Canadian dollars year earlier; chief executive Robert Milton pledges aggressive program of cost and debt reduction; photo (S)

Enron's Ex-Chief Testifies But Is Sharply Contradicted Lawmakers heard sharply conflicting testimony from Enron's former chief executive, Jeffrey K. Skilling, who portrayed himself as ignorant of the company's questionable practices, and other executives who said he received numerous and specific warnings that Enron's off-the-books partnerships were improper. Mr. Skilling's testimony, met by hostile questioning and harsh skepticism from lawmakers, came after a parade of current and former Enron executives who invoked their Fifth Amendment right against self-incrimination rather than explain the partnerships at the center of Enron's collapse. [Page A1.]

Many pastors of Lutheran Church-Missouri Synod sharply criticize Rev David Benke, Lutheran leader in New York, for participating in national prayer service at Yankee Stadium following Sept 11 terrorist attacks; he is accused of tolerating syncretism, or combining of Christian and non-Christian views, and such charges could lead to his dismissal; Benke rejects accusations, but church will investigate further; photos (M)

Japan's Home Affairs Ministry reports residential land prices will probably fall 5 percent in fiscal year beginning April 1, continuing 10-year decline (S)