May 3, 2005

Chairman of Joint Chiefs of Staff Gen Richard B Myers reportedly tells Congress in classified report that Pentagon's ability to deal with potential armed conflicts around world would be limited because of concentration of American troops and weapons in Iraq and Afghanistan; says any major combat operations elsewhere in world would probably be more protracted and produce higher American and foreign civilian casualties as result; says factors that would limit Pentagon's ability to prevail as quickly as war planners once predicted in other potential conflicts include reduced stockpiles of precision weapons, which were depleted during invasion of Iraq, and stress on reserve units, which fulfill bulk of combat support duties in Iraq; but despite limitations, Myers is unwavering in his assessment that American forces would win any major combat operation and are 'fully capable' of meeting all Washington's military objectives; just last week Pres Bush claimed that number of American troops in Iraq would not limit Washington's military options elsewhere; photo (M)

Growth in Medical Copters Makes for Crowded Skies Competing helicopter services are locked in air wars across the country as medical airlifting grows more profitable and common. As with other health care services that have become routine, the public price tag is soaring and helicopters are being used when ambulances might do. An estimated 700 medical helicopters operate nationally, about twice the number flying a decade ago. [Page A1.] No 2nd Payday for Neiman Holders Neiman Marcus shareholders expressed their disappointment that the private equity firms buying the company for $5 billion were also buying its credit card business. They had hoped for a separate sale. [C2.] $1.6 Billion Deal for Fitness Chain Forstmann Little agreed to buy 24 Hour Fitness, a private company that operates 345 fitness clubs, for $1.6 billion. [C2.] Ground Zero Project Chief Resigns Kevin M. Rampe, left, the man overseeing the multibillion-dollar rebuilding effort at the World Trade Center site, is leaving to become global ethics and compliance officer for Ace Ltd., a Bermuda-based property and casualty insurer. His departure comes at a sensitive moment for a rebuilding effort that has been plagued by bad news and delays. For example, the construction of the Freedom Tower is months behind schedule. [A1.] Group Sues Over Meat Alternative A consumer activist group says Quorn products, which are marketed as healthful alternatives to meat, are anything but healthy for some people. The group is suing Quorn's manufacturer and its largest United States retailer, Whole Foods Market. [C2.] Time Warner Employee Data Is Lost Time Warner reported the loss of computer backup tapes containing sensitive data including the names and Social Security numbers of about 600,000 people. [C4.] Power Rangers Meet Pac-Man Bandai, the Japanese maker of the Power Ranger action figures, will buy Namco, Pac-Man's creator, in a $1.7 billion deal. [C8.] Nortel Profit Drops 75% in Quarter Profits at Nortel Networks, the telecommunications equipment maker, fell 75 percent in the fourth quarter as sales declined. The company is still dealing with financial restatements as well as criminal and securities investigations. Nortel's net income declined to $133 million, from $528 million in the same quarter a year earlier. [C16.] Circulation Falls at Many Papers The newspaper industry reported its most serious declines in circulation in more than a decade. Only 3 of 10 newspapers gained in daily circulation. [C4.] On Sony Device, Commercials to Go Heavy.com, a Web host of short films and animation, has started making advertiser-supported clips available as free content for the PlayStation Portable. Advertising. [C5.] Small Gains for Stock Market Stocks closed higher despite a sharp rise in oil prices. The Dow rose 59.19 points, to 10,251.70. The S.&P. was up 5.31 points, at 1,162.16, and the Nasdaq gained 7 points, to 1,928.65. [C10.] When Babies Go on Business Trips More women are taking young children along when they travel for work. [C7.] Take the Gun, Leave the Nail File Airport security checkpoints inspire laughter and tears. Joe Sharkey: On the Road. [C7.]

Even before Mike Mussina's 6-2 victory over the Tampa Bay Devil Rays on Monday, the Yankees had decided it was time for major changes. On Tuesday at Tropicana Field, they will unveil those changes, with new or displaced players at four positions. Robinson Cano, a top prospect batting .333 at Class AAA Columbus, will be promoted to start at second base. The ripples will be felt throughout the roster, with Tony Womack shifting from second base to left field, where he said he had never played.

Congress moves quickly toward setting strict rules on how states issue driver's licenses, requiring them to verify whether applicants are in country legally in effort to deter terrorist attacks; requirement, which would apply to all 50 states and other jurisdictions that issue licenses, is in supplemental appropriations bill for Iraq; state officials complain that new requirement will add costly, complicated burden to issuance of driver's licenses; civil rights organizations and privacy advocates voice concern that standardized driver's license would amount to national identification card and that central database would be vulnerable to identity theft; proposed regulation would replace provision of intelligence bill passed in Dec that did not specifically require states to check citizenship or immigration status of applicants; 11 states now grant driver's licenses to noncitizens who do not have visas; photo (M)

Market Place column on American International Group's previous accounting methods as company's most recent inventory of accounting improprieties shows it will probably reduce its net worth by $2.7 billion, $1 billion more than it had previously estimated; says Maurice R Greenberg, ousted as chief executive and chairman in March, now resembles man behind the curtain, working furiously with handful of colleagues at top to maintain awesome image to investing world that was not quite reality; charts; photo (M)