June 29, 2002

Russia Rethinks the Draft Russia's lower house of Parliament passed legislation that would provide conscientious objectors with an alternative to the draft, but under conditions critics call onerous. PAGE A7 Israelis Attack in Hebron Troops blasted away part of the Palestinian Authority offices in an attempt to end a four-day standoff with a dozen Palestinians who are believed to be hiding inside. PAGE A6

New York City is installing radiation-detection sensors outside several public buildings, starting with police headquarters; photo; Comr Raymond Kelly explains (S)

Exodus of workers from telecommunications industry swells as companies cut labor force by laying off or buying out workers and forcing retirements; industry accounts for 167,000 jobs cuts, over ten percent of lost jobs in nation since recession began in Mar 2001; industry analysts believe that elimination of another ten percent of industry's employees is required and that no rehiring will be necessary when economy rebounds; graphs; photographs (M)

William C Rhoden Sports of The Times column challenges notion that European basketball players' ability to hit outside shot better than Americans explains increasing presence of European players in American basketball; photo (M)

Securities and Exchange Commission investigation into Martha Stewart's sale of 3,928 shares of ImClone stock for $227,000 on Dec 27, 2001 will focus on content of conversation between her and Merrill Lynch employees Peter Bacanovic and Douglas Faneuil; will attempt to discover whether trade was predicated on insider information (M)

On Wall Street, it is called backing in. Each quarter, analysts at securities firms forecast the profit per share of the companies they cover. Companies whose profit falls short of the consensus estimate can be severely punished, their stocks falling 10 percent or more in a day.

After months of criticism about its missteps and delays in distributing financial help to New Yorkers affected by the Sept. 11 terror attack, the Federal Emergency Management Agency announced yesterday that it was formally changing its eligibility criteria to allow aid to thousands more people who suffered economic hardship as a result of the disaster. Under the new guidelines, the agency said, anyone who lived or worked in Manhattan and suffered financially because of the attack may now be eligible for the financial assistance needed to avoid being evicted from an apartment or home. Others in the surrounding boroughs who worked for businesses that were economically dependent on Lower Manhattan, from cabdrivers to factory workers, may also be eligible.

''These cardinals,'' said Joaquín Navarro-Valls with mock chagrin as he swept a visitor into his office just off St. Peter's Square. ''They come by without any appointment. You cannot say no. So it's, 'Yes, your eminence, just have a seat.' '' Nineteen years into his career as papal spokesman, Dr. Navarro-Valls, now 65, still has occasional headaches with the centuries-old papal bureaucracy, the Roman Curia.

Trying to Make the Books Fit the Earnings Forecasts Each quarter, analysts forecast the earnings per share of the companies they cover. Shares of companies whose earnings fall short can be severely punished, so companies try to make sure they do not miss the estimate. Instead of figuring out their sales and subtracting expenses to calculate the profit, they work backward, starting with the profit investors are expecting and manipulating sales and expenses to make sure the numbers come. In last decade's boom, as executive pay was increasingly based on how a company's stock performed, backing in became widespread. Just how much so is only now becoming clear. [Page A1.] Mexico Changes Strategy of Plants The closing of more than 350 foreign-owned assembly plants in Mexico is a reflection of the harsh economics of globalization. Cheap as Mexico's labor is, it is not as cheap as that in Asia or Eastern Europe. So to compete, Mexico is trying to attract factories that require more skilled workers. [A3.] Consumer Confidence Slips in May The index of consumer confidence fell to 92.4 in June from 96.9 in May. The drop was the second in three months and compares with a low of 81.8 in September. The Commerce Department reported that personal income rose 0.3 percent in May but that consumer spending dropped 0.1 percent. [C5.] The Dow Jones industrial average closed down 26.66 points, at 9,243.26. The Dow suffered its sixth consecutive weekly decline. The Nasdaq composite index rose 5.73 points, to 1,464.93, and the Standard & Poor's 500-stock index slipped 0.82 points, to 989.82. [C5.] Drug Bill Is Part of a Major Shift A House vote to help elderly people buy prescription drugs was a major moment for American health care and politics. The vote foreshadows a deepening federal commitment to the elderly and the aging baby boom generation, as well as a significant expansion in the role of government. News Analysis. [A11.] Banks Sued for S. Africa Dealings Three banks are facing a legal challenge over their financial assistance to South Africa's former apartheid government. A lawsuit filed in Manhattan against Credit Suisse Group, Citigroup and UBS contends that the banks' financial dealings prolonged the white-only rule in violation of international law. [C4.] Internet Group Approves Overhaul The group that manages the Internet's address system has approved the outline of a plan intended to streamline operations and allow for faster decision-making. But the efforts to reorganize have sparked a debate over how the group should deal with policy questions regarding domain names. [C4.] Major Central Banks Sell Yen The Federal Reserve, the European Central Bank and the Bank of Japan sold yen on behalf of the Japanese government in an effort to stem a rally that threatens a recovery in Japan. The sales only drove the yen down briefly against the dollar. [C5.] In Russia, Illness or Conspiracy? Instead of triumphantly conducting the yearly meeting of shareholders of Gazprom, the chief executive, Alexei Miller, never showed up. Mr. Miller was ill, according to a dryly worded statement. But in a country where illnesses, real or imagined, have often served as a cover for political maneuvering, the announcement raised eyebrows. [C4.] 2 Companies Share F.A.A. Project Raytheon and Lockheed Martin will share two Federal Aviation Administration contracts with a value of $2.7 billion to settle a complaint over the handling of a project. The deal gives Raytheon a piece of a $1 billion project to improve software in 20 F.A.A. centers that direct planes at high altitudes. [C5.]

Bankers holding $2.65 billion in unsecured WorldCom loans contact investors and competitors to gauge their interest in buying major pieces of embattled telecommunications company and to assess how much money those pieces might fetch if sold; WorldCom executives struggle to keep company out of bankruptcy following recent disclosure of $3.8 billion in accounting discrepancies as they begin implementing 17,000 layoffs worldwide; photo; table of key salable assets (M)

New York Yankees defeat New York Mets, 11-5; photos (M)

President Bush said today that he would transfer the powers of the presidency to Vice President Dick Cheney for a short time on Saturday while he was under sedation for what he described as a routine colonoscopy. The White House counsel, Alberto R. Gonzales, said Mr. Cheney would be acting president ''for a matter of hours'' under a clause in the 25th Amendment. That clause has been invoked at only one other time, in July 1985, when President Ronald Reagan underwent surgery for colon cancer and transferred powers for about nine hours to Mr. Bush's father, who was then vice president.