Newspaper article THE JOURNAL RECORD

Worldwide Briefly

Newspaper article THE JOURNAL RECORD

Worldwide Briefly

Article excerpt

WASHINGTON (AP) - The U.S. trade deficit shrank in August to its lowest level for the year, with some economists hailing the reported decline Friday as evidence that the country has finally seen the worst of its trade woes.

However, other analysts were not as optimistic, contending that much of the improvement in the past two months has come from a temporary drop in oil demand.

The Commerce Department report showed that the difference between what the United States imported and what it exported fell to a $9.9 billion imbalance in August, the lowest monthly total since last December.

The August deficit was 5.8 percent below the July figure and a sharp 26 percent lower than the $13.4 billion June imbalance, the largest this year.

""The decline in the dollar is beginning to have an impact. This turnaround is for real,'' said Michael Evans, head of a Washington economic forecasting firm.

* * *

NEW YORK (AP) - Trans World Airlines Inc. said it reached agreement with financier Carl C. Icahn, who owns a majority of the carrier's stock, for Icahn to acquire the remaining shares.

The definitive agreement was approved Thursday by TWA's board of directors, most of whom then quit the board as part of the accord with Icahn.

The agreement calls for Icahn's investor group, which currently owns more than 52 percent of TWA's total common shares outstanding, to pay $19.50 in cash and $4.50 of a new TWA preferred stock for each remaining share.

The terms match the offer Icahn previously had made during his bitter battle with Texas Air Corp. to acquire TWA.

Texas Air, the Houston-based parent of Continental Airlines, had offered $26 in cash and securities for each TWA share, but Icahn acquired more than 50 percent of TWA's stock before Texas Air's offer could be submitted to TWA's stockholders.

TWA said its shareholders are expected to vote on its merger agreement with Icahn by mid-December, with the acquisition to be completed ""shortly thereafter.''

* * *

NEW YORK (AP) - The nation's basic money supply contracted for the first time in two months, raising hopes for an end to an explosive growth pattern that has raised the threat of higher U.S. inflation.

The Federal Reserve Board said Thursday that M1, the basic money supply measure representing funds readily available for spending, fell $3.3 billion in the week ended Sept. 16 to a seasonally adjusted $610.4 billion.

M1 had soared $21.9 billion over the previous eight weeks.

Analysts said that even though the latest decline was bigger than expected, M1 still was too far above the growth targets the Fed has set to encourage a non-inflationary economic expansion. …

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