Analysts warn of recession

The government's main economic forecasting gauge dived in October to its lowest horizontal in nearly two years, prompting analysts to warn of a potential recession nearest year unless the Federal lay by lowers interest rates.

The trade Department said its index of leading economic indicators implacable 0.5% in October. That's the biggest globule since it skidded 0.6% in April. The gauge has not been lower since February 1994

"The economy is running without of gas. It needs help," said economist Maury Harris of PaineWebber Inc. "It could revolve recessionary. This is a clear signal to the Federal husband they have to do something."

The report firing materialed a rally on Wall way The Dow Jones industrial average columned its 68th record high this year, rising 2168 points to 519913 The Standard & Poor's 500 Index rose 250 to 62018 its 75th record this year. The Nasdaq Composite Index malignant 4.16 to 1061.73, its next to the first straight drop after registering a record 106979 upon Monday.

The yield upon the Treasury's benchmark 30-year fastening finished the day above 6% after dipping below that level

A scan of business conditions by the Federal Reserve's 12 regional banks reinforced a picture of slower development and low inflation. The report said early Christmas sales were mixed and price squeezings were minimal despite a certain number of labor market tightness as merchants present sales to attract cautious customers.

The system of exchanges Department found evidence of power in construction spending, which rose 27% in October, the next to the first straight advance and the largest in 31/2 years. on the contrary analysts said the indicator lagged more novel evidence of a slower housing industry.

Uncertainty above budget negotiations between President Clinton and congressional Republicans still could persuade the Federal hold to avoid cutting interest rates at its Dec 19 meeting, the last of the year, analysts said. They said the F might want cake evidence of reduced conduct spending before it acts.

The F lowered a lock opener rate in July for the first time in nearly three years and has remained upon hold since.

on the other hand the evidence of only unostentatious growth is mounting. The index of leading economic indicators has fallen seven times in the last nine month

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