DIGEST

ABC News and Starwave launched ABCNEWS.com, joining the Internetnews fray with a 24-hour news service that will draw on theresources of ABC's news division. The service, which will besupported by advertising revenue and available free to onlinecomputer users, will be distributed by ABC's partners, AmericaOnline and Netscape Communications.Mortgage rates fell this week. A Federal Home Loan Mortgage Corp.survey showed the interest rate on 30-year fixed-rate mortgages fellto 7.91 this week from 7.94 percent last week. Rates on 15-yearfixed mortgages fell to 7.44 percent from 7.47 percent, and theaverage initial rate on adjustable-rate loans fell to 5.78 percentfrom 5.82 percent.

General Dynamics named James E. Turner Jr. to be president andchief operating officer effective June 1. Turner had been executivevice president in charge of the Falls Church company's Marine Group.It hasn't had anyone in those jobs since 1994, when James R. Mellorrose from those posts to become chairman and chief executive.Swiss Bank agreed to buy Wall Street investment bank Dillon Readfor about $600 million, the latest merger in the rapidlyconsolidating global securities business. The announcement came aday after Holland's ING Group, which owns 25 percent of Dillon Read,broke off talks to buy the other 75 percent from the firm'spartners.House Ways and Means Committee Chairman Bill Archer (R-Tex.) toldPresident Clinton in a letter that White House dithering had made itunlikely that Congress would find the time to consider and passlegislation authorizing new trade agreements this year. Butadministration officials said they will press ahead with plans toask Congress for the legislation sometime this year.Dow Chemical said it will acquire Eli Lilly's 40 percent stake intheir agricultural chemicals venture, Dow Elanco, for $900 millionplus $300 million in undistributed earnings. The transaction willmake Dow the sole owner of the Indianapolis operation, which wasformed in 1989 and has annual sales of about $2 billion.EARNINGSKmart reported a profit of $14 million for the first quarter,compared with a loss of $99 million a year earlier, as costsdeclined while sales grew.Gap reported higher earnings on an 11 percent increase in sales.Profit rose to $84.3 million from $81.6 million.Hewlett-Packard's profit rose 8 percent, to $784 million, in thelatest quarter, but fell short of Wall Street expectations amidsluggish growth in orders for personal computers and printers.Staples said first-quarter profit fell 35 percent, to $8.4 million,because of high costs related to a proposed merger with OfficeDepot, which was rejected by regulators.Navistar International, a Chicago maker of trucks, engines andschool buses, said its fiscal second-quarter earnings rose 15percent, to $30 million, on strong diesel engine sales andcontinuing productivity improvement.LOCAL BUSINESSCharles E. Smith Residential Realty of Arlington announced that ithas arranged to sell $71.5 million worth of convertible nonvotingpreferred stock to a major institutional investor, which the companywould not identify. The apartment building company said it will usethe money to expand in the Washington area and in other U.S. cities.Tracor's Vitro unit in Arlington received a five-year contractworth as much as $106.6 million from the Navy's Naval Sea SystemsCommand to help test and support systems for ships fitted with theAegis weapons system.Capital One Financial's stock dropped $3.50 a share after thecompany warned that its second-quarter net income will be lower thanexpected. Shares of the Falls Church-based company, the nation's10th-largest issuer of credit cards, fell to $36.37 1/2 on heavytrading of 2.9 million shares.Digex, an Internet service provider in Beltsville, said it lost$9.6 million in the first quarter, compared with a $2.0 million lossa year earlier. Revenue in the quarter increased 292 percent to $8.7million. The company attributed the bigger loss to the costs ofbuilding its data network.Hadron, an Alexandria information technology company, reported aloss of $57,000 in its fiscal third quarter, ended March 31,compared with earnings of $49,900 in the same quarter last year. Thecompany said the cost of developing and marketing one of itssoftware products was responsible for the loss.