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Friday December 20 5:49 AM EST

Reuters Business Summary

Blue-Chip Stocks Soar - The Dow Jones industrial average opens higher today after soaring to its second biggest point gain ever yesterday. The activity was spurred by a powerful bond market rally and a flurry of options-related buying. The 30-stock Dow opens up 126.87 points at 6,473.64, its biggest rise since the blue-chip index soared 184.86 on Oct. 21, 1987. The powerful rally yesterday saw 26 of the 30 Dow components close higher. In the broader market, advancing issues swamped declines 1,806 to 753 on heavy volume of 522 million shares on the New York Stock Exchange. The Nasdaq Composite index rose 10.48 points to 1,295.86. In Tokyo, stocks closed moderately higher today after fluctuating nervously. The Nikkei average closed 119.79 points higher at 19,690.46 after see-sawing in positive and negative territory toward the close. The dollar was trading a bit higher at 114.25 yen.

Railroad Bidding Wars Continue - Norfolk Southern, keeping the heat on rival Conrail bidder CSX Corp., has raised its bid for Conrail Inc. to about $10.47 billion from $10 billion. The increase came the same day that CSX raised its cash-and-stock offer in its friendly merger deal with Conrail by $870 million to about $9.5 billion. The Norfolk, Va.-based company said its $115 per-share offer would give Conrail shareholders a premium of more than $14 per share over the remaining blended value of CSX's revised cash-and-stock offer. Conrail and CSX were not immediately available for comment after Norfolk Southern raised its bid.

States Sue Contact Lens Cos. - Twenty-two states have filed an antitrust suit against contact lens companies and a national optometric association alleging they conspired to eliminate the supply of contact lenses to lower priced retail outlets. The suit, filed in Brooklyn federal court, names as defendants Vistakon, a unit of Johnson & Johnson, Bausch & Lomb Inc., and CIBA Vision Corp. The suit also names the American Optometric Association and eight optometrists. "This lawsuit is without merit and we will vigorously contest it," Johnson & Johnson said. The suit alleges that the defendants conspired to restrict consumer access to prescriptions they need to obtain replacement lenses from distributors other than licensed eye care professionals.

Job Cuts at Peregrine - Peregrine Inc. may lay off up to half of the 5,500 hourly employees at the four former General Motors component plants it purchased last month, according to the new company's top executive. Peregrine CEO Edward Gulda, in a briefing with reporters, said workers not needed at Peregrine would be able to transfer back to GM. Peregrine was formed by the New York investment firm Joseph Littlejohn & Levy to purchase four plants in Michigan and Ontario, Canada, from GM's Delphi Automotive Systems unit. Peregrine formally takes over the plants Jan. 1.

Plan to Cut Overseas Phone Rates - Federal regulators have unveiled plans to force foreign phone companies to reduce the rates they charge U.S. carriers to complete calls from the United States. The Federal Communications Commission proposal is the second piece in a two-pronged strategy to save American consumers and businesses billions of dollars in foreign calls. The latest plan primarily targets state-run phone monopolies by cajoling them to cut rates, or risk losing U.S. dollars. Last month, the FCC waived rules that limit the ability of U.S. carriers to negotiate cheaper calling rates with an overseas phone company whose own market is considered open.

Adviser Sentenced, Fined - A federal judge has sentenced former Lazard Freres & Co. partner Mark Ferber to 33 months in prison and a $1 million fine for fraud and corruption. In a separate action yesterday, the Securities and Exchange Commission said Ferber agreed to pay $650,000 in fines and be permanently barred from the $1.3 trillion municipal bond market. The 43-year-old lawyer and financial adviser was convicted in August on 58 of 61 counts of fraud and corruption involving a contract he maintained with Merrill Lynch & Co. to advise government clients in the municipal bond market.

States: Prudential Offer Unfair - Four states have urged a federal judge to reject a proposed class-action settlement of consumer complaints against Prudential Insurance, calling the deal unfair to consumers. Florida, Massachusetts, Texas and California said yesterday that they filed objections to the settlement, which calls for Prudential to pay at least $410 million to as many as 10.7 million policyholders who say they were victims of deceptive sales practices. The states said the settlement offer was inadequate and placed too much of a burden on customers to prove that fraudulent misrepresentations were made when they purchased their policies. Prudential defended the settlement.

Hoffa Asks For Vote Probe - Labor lawyer James Hoffa, refusing to concede defeat in the Teamsters union presidential election nearly a week after his opponent claimed victory, has called for a congressional investigation into the vote. Hoffa has formally asked U.S. Attorney General Janet Reno to impound the ballots and initiate an FBI investigation into "serious irregularities" in the election. "We really have what I call Teamstergate," Hoffa told reporters at a news conference at the Teamsters' Detroit offices, where his legendary father, the late Jimmy Hoffa, ruled the union in the 1950s and '60s.

Royally Soiling the Caribbean? - A federal grand jury has indicted Royal Caribbean Cruises on charges it conspired to dump waste oil in U.S. waters and made false statements to the Coast Guard, according to the Justice Department. The 10-count indictment from a grand jury in San Juan, Puerto Rico, also charged the cruise line and two high-level employees with obstruction of justice, accusing it of tampering with witnesses and destroying evidence that a cruise ship was bypassing pollution control procedures, the department said. The indictment, stemming from a Coast Guard surveillance operation in 1994, charged that engineers on a cruise ship routinely dumped oily bilge waste overboard.

Airline Ticket Scam Discovered - The Manhattan District Attorney's Office says two New York travel agency managers who allegedly $1.2 million worth of phony discount airline tickets have been arrested and arraigned. The two brothers were preparing to flee to Pakistan when they were caught by New York City police. The scam was discovered when passengers showed up at airports throughout the country and were told that their tickets, issued by Amsag Travel Corporation on Madison Avenue were "stolen" and invalid. While some airlines honored the tickets, many passengers were left stranded.

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