                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Wednesday, January 11, 1995            TAG: 9501110394
SECTION: BUSINESS                 PAGE: D2   EDITION: FINAL 
SOURCE: (Associated Press)
                                             LENGTH: Long  :  215 lines

WHOLESALE INFLATION RISES SLIGHTLY

Wholesale inflation was held in check in 1994 for the fourth consecutive year, a performance analysts said will be difficult to repeat if the economy keeps soaring and unemployment remains low. The Labor Department said Tuesday that its Producer Price Index rose a modest 1.7 percent last year, compared with a 0.2 percent advance in 1993. Declining energy costs helped offset a weather-related spike in food prices to end last year on a positive note - a 0.2 percent increase for the PPI in December. The gauge measures price pressures before they reach the consumer.

Johnson & Johnson subsidiary pleads guilty: A Johnson & Johnson subsidiary will plead guilty to destroying thousands of documents during a federal investigation into whether it promoted Retin-A as a wrinkle remover. Ortho Pharmaceutical, based in Raritan, N.J., will plead guilty today to obstruction of justice and conspiracy, Johnson & Johnson said in a statement. The investigation started after the Food and Drug Administration grew alarmed that doctors were prescribing the acne drug for wrinkles. The company has agreed to pay a $5 million fine and $2.5 million to cover the cost of the investigation, the statement said. Three senior Ortho employees were fired after the shredding was discovered in late 1992. (AP)

Up to $8 million lost by sheriff: The Palm Beach County, Fla., sheriff's office lost as much as $8 million on risky derivative investments and the department may have to borrow money to cover everyday expenses. Auditors discovered the loss last week when examining books for the fiscal year ended Sept. 30. Rising interest rates deflated the value of the mortgage-backed derivatives and wiped out up to a third of the $22 million fund that invested tax revenue and capital improvement funds. The losses were much smaller than the $2 billion that Orange County, Calif., another wealthy municipality, lost. (AP)

Singapore firm wants to buy stake in Trump Plaza Hotel: A Singapore company plans to buy a major stake in Donald Trump's Plaza Hotel from a consortium of banks led by Citibank, a spokesman for Trump said. CDL Hotels International and the Plaza's owners have agreed in principle to the deal, said Abe Wallach, an executive vice president in the Trump Organization. The Straits Times newspaper in Singapore reported CDL will pay $300 million for the consortium's 49 percent share of the New York hotel. Trump will retain his 51 percent interest in the Plaza and continue to manage the hotel, according to a statement from the Trump Organization. (AP)

Arkansas Supreme Court sides with Wal-Mart: Two-for-one offers and just about any other form of retail pricing used to boost store traffic got a green light from Arkansas' highest court. In a closely watched decision, the Arkansas Supreme Court said those tactics don't translate into ``predatory pricing,'' even if they're practiced by Wal-Mart Stores Inc., the nation's largest and arguably most aggressive retailer. The justices overturned a 1993 lower court ruling that had found Wal-Mart guilty of predatory pricing and awarded nearly $300,000 to three small pharmacies in the state. A circuit court, in the David vs. Goliath case, had found Wal-Mart guilty of selling merchandise below cost in an effort to drive smaller stores out of business. The state Supreme Court disagreed. (Chicago Tribune)

Finder keepers, losers weepers: Well, not in this case. A couple who found $60,000 worth of U.S. savings bonds in a mobile home won't get to keep the cash - unless the Supreme Court decides otherwise. A state appellate court panel recently upheld a lower court decision that the proceeds from the bonds ``belonged to the unwitting seller rather than the unwitting buyer.'' The dispute began after Norma Grace Thelma Onan died in 1992, leaving behind a cluttered mobile home. Roy and Delores Shoemaker, who bought the home, found the bonds tucked away in a closet. The Shoemakers sued Helen Wooten, Onan's niece, seeking title to the bonds. And then, Wooten sued them. Wooten won. ``If they had been a little bit nicer, they probably would have come out with some money,'' said Gordon Hollingsworth, Wooten's attorney. (Knight-Ridder)

Greenspan criticizes new way of estimating federal revenue: Federal Reserve Chairman Alan Greenspan and his predecessor, Paul Volcker, say a proposed new way of estimating federal revenue could undermine confidence in the economy and bring higher interest rates. ``We must avoid resting key legislative decisions on controversial estimates of revenues and outlays,'' Greenspan said at a joint hearing of the House and Senate Budget Committees. The new system, called ``dynamic scoring,'' tries to take into account not only the direct effects of a proposed tax changes, but also anticipated changes in taxpayer behavior as a result of the changes. Many Republicans say the system is better than the ``static scoring'' now used. But critics say the proposed method could lead to major errors. (Bloomberg Business News)

Post sells stake in affiliate: The Washington Post Co. says it has sold most of its stake in an affiliate that received a controversial price break on a new mobile phone license. It sold 49 percent of American Personal Communications Inc. to Sprint and three cable companies, and another 19.5 percent back to APC, company officials said. The sales totaled $33 million. APC and two other companies benefited from trade legislation provisions that reduced the price they were to pay for licenses to provide wireless phone service in the Washington-Baltimore area. The controversial provision in the General Agreement on Tariffs and Trade replaced a Federal Communications Commission plan. Still, the resulting price break was not enough to persuade the Post Co. to keep its full investment in APC. (AP)

Two more Aegis destroyers, please: Litton Industries Inc. said Tuesday that its Ingalls Shipbuilding division received a $739 million contract from the Navy to build two missile-destroying ships. Ingalls will build two Arleigh Burke-class Aegis guided missile destroyers, the second and third ships in a two-year plan announced by the Navy last July. The shipyard is in Pascagoula, Miss. Los Angeles-based Litton said three Ingalls-built Aegis destroyers are now in active military service. In a separate move, Litton also said it completed its purchase of Teledyne Inc.'s Southern California-based Teledyne Electronic Systems operations. The price was not disclosed. (Dow Jones News)

Wholesale inflation rises slightly: Wholesale inflation was held in check in 1994 for the fourth consecutive year, a performance analysts said will be difficult to repeat if the economy keeps soaring and unemployment remains low. The Labor Department said Tuesday that its Producer Price Index rose a modest 1.7 percent last year, compared with a 0.2 percent advance in 1993. Declining energy costs helped offset a weather-related spike in food prices to end last year on a positive note - a 0.2 percent increase for the PPI in December. The gauge measures price pressures before they reach the consumer. (Associated Press)

Manufacturer discontinues sponge: The maker of the Today Sponge, once the most popular over-the-counter contraceptives for women, is discontinuing the product, saying it can't meet stringent new government safety rules. Whitehall-Robins Healthcare, which voluntarily suspended production of the sponges last year, said it would cost too much to upgrade its manufacturing plant to meet the rules. Whitehall is the only maker of contraceptive sponges in the world. The Food and Drug Administration last year questioned the purity of water and air at the plant where the sponges are made. Birth control advocates bemoaned the loss of the sponge, saying it further restricts contraceptive choices that women can control. (AP)

Greenspan criticizes new way of estimating federal revenue: Federal Reserve Chairman Alan Greenspan and his predecessor, Paul Volcker, say a proposed new way of estimating federal revenue could undermine confidence in the economy and bring higher interest rates. ``We must avoid resting key legislative decisions on controversial estimates of revenues and outlays,'' Greenspan said at a joint hearing of the House and Senate Budget Committees. The new system tries to take into account not only the direct effects of a proposed tax changes, but also anticipated changes in taxpayer behavior as a result of the changes. Many Republicans say the system is better than the ``static scoring'' now used. But critics say the proposed method could lead to major errors. (Bloomberg Business News)

Two more Aegis destroyers, please: Litton Industries Inc. said Tuesday that its Ingalls Shipbuilding division received a $739 million contract from the Navy to build two missile-destroying ships. Ingalls will build two Arleigh Burke-class Aegis guided missile destroyers, the second and third ships in a two-year plan announced by the Navy last July. The shipyard is in Pascagoula, Miss. Los Angeles-based Litton said three Ingalls-built Aegis destroyers are now in active military service. Litton also said it completed its purchase of Teledyne Inc.'s Southern California-based Teledyne Electronic Systems operations. (Dow Jones News)

Northwest won't have to raise $235 million: Northwest Airlines Corp. said Tuesday that it has been relieved of an obligation to raise $235 million by selling stock or debt by next year. That obligation had been part of the company's 1993 agreement with labor leaders and creditors to raise $500 million by July 1996 to avoid bankruptcy. The company raised $265 million in a stock sale last year. The original terms of the agreement called for 17.3 million shares of Northwest stock to be transferred from their original owners to trusts held by the unions if the company didn't reach the goal. Northwest said it was relieved of the requirement because of its extensive $1.7 billion in financings last year and its improving financial condition. (Dow Jones) by CNB