July 24, 2002

Pres Bush condemns as 'heavy handed' Israeli bombing attack that killed Hamas leader Sheik Salah Shehada and 14 civilians in Gaza; administration says that Israelis knew apartment building hit with one-ton bomb was filled with ordinary Palestinians, including children; Shehada founded military wing of Hamas and was blamed for string of deadly suicide attacks, but scale of damage and televised scenes of infant's body being carried through streets prompt Bush to issue condemnation; photo; Israel says it had no choice and regrets civilian deaths, but military officials, reacting to international criticism, say they did not anticipate extent of collateral damage; top Israeli military envoys met in Washington with Sec Colin Powell and security adviser Condoleezza Rice hours before attack but gave no warning and may not have known (M)

Stocks fall again amid growing concerns about telecommunications and energy-trading segments, as Sec Paul O'Neill goes to Wall Street to talk with senior brokerage executives; photos; graphs; banks and energy stocks account for most of 1.1 percent drop in Dow Jones industrial average, which closes at 7,702.34, lowest since Sept 1998; two areas are hurt by latest Enron revelations, with Citigroup and J P Morgan Chase executives at Senate hearing deny helping Enron cover up its debt; Standard & Poor's 500-stock index falls 2.7 percent to five-year low; Nasdaq is off 4.2 percent, to 1,229.05, and is now down more than 75 percent from peak (M)

Citigroup is latest giant company to fall from grace among investors, as Congress examines its deals with Enron Corp and market participants grow concerned that its many businesses pose many risks; stock falls 16 percent, shaving $26 billion off Citigroup's market value and leaving it down 47 percent for year; stock closes at $27, down $5.04; shares of J P Morgan Chase, also in spotlight at Senate hearing, falls $4.44, or 18 percent, to $20.08 per share; Morgan has been plagued by questions about its ties to Enron since Ernon filed for bankruptcy in December; Citigroup is only now being forced to defend activities of its investment bank Salomon Smith Barney; analysts say Citigroup should have financial resources to deal with any legal or regulatory liability, but no one can estimate what potential liability might be (Market Place column) (M)

Worlr

Organizers of annual National Black Arts Festival discuss Atlanta, GA, event's current success after years of growing pains; festival sponsors plan further expansion of event; photos (M)