Merrill Lynch Inc

After hearing comments from about two dozen residents, the Dana Point City Council struggled late Tuesday with how best to develop the Headlands, a resort and residential project on a pristine bluff overlooking the Pacific Ocean. "It's been a long, arduous process," Mayor Bill Ossenmacher said, "and I don't anticipate it ending soon." Meanwhile, in Laguna Beach, the City Council postponed action on a proposal for a $100-million luxury resort to be built on a former seaside trailer park.

The latest chapter in the history of Treasure Island will be written Thursday, when the California Coastal Commission reviews a development plan for the scenic coastal strip south of Laguna Beach. Treasure Island most recently housed a mobile home park, which closed a year ago. The area and its breathtaking coastal views once served as the backdrop for movies; it earned its name from a 1937 production of the Robert Louis Stevenson classic filmed there.

The public relations component of the legal battle between Orange County and the brokerage giant Merrill Lynch & Co. Inc. stepped up in recent days. The catalyst was the assertion from Merton H. Miller, a University of Chicago finance professor and Nobel laureate retained by Merrill Lynch, that Orange County really didn't have to declare bankruptcy in late 1994. The county's post-bankruptcy investment strategist from Salomon Bros., Chris Varelas, quickly disputed the premise and the methodology.

Kemper Corp. faced a midnight deadline Sunday to decide whether to accept insurance company Conseco Inc.'s $3.25-billion buyout offer. Kemper's board of directors was expected to discuss the proposal, but a spokesman would not confirm a meeting. Efforts to reach Kemper executives were unsuccessful. "We expect to hear something today because the offer expires today at midnight," Conseco spokesman James Rosensteele said Sunday. He said he had not been informed whether Kemper's board was meeting.

Shearson Lehman Hutton Holdings Inc., a major Wall Street firm hit by turmoil in recent weeks, said today it will cut its work force by about 2,000 during the first quarter in a cost-cutting move designed to save about $400 million a year. Shearson also said it is undertaking a comprehensive strategic review of its operations that could drastically reshape the nation's No. 2 stockbroker.

Eight years of wrangling might seem like a lot over an abandoned mobile home park--except when the land offers some of the most enchanting coastal scenery in Orange County. The Laguna Beach City Council took a step Tuesday toward revamping the former Treasure Island Mobile Home Park when it approved broad development guidelines for the site in south Laguna. "We're laying out raw parameters within which any project must fit," Councilman Paul Freeman said.

Crude oil prices surged on world markets today as fears mounted that Iraq would move against Saudi Arabia after establishing control over Kuwait. On the New York Mercantile Exchange, crude oil futures soared from the opening, with the September contract gaining a record $2.34 to $25.45 in the first two hours of trading.

Infonet Services Corp., an El Segundo-based communications and computer networking company, unveiled plans Wednesday to raise more than $710 million in an initial public stock offering that would be one of the largest in Southern California history. Infonet, a 30-year-old company that was formerly a subsidiary of Computer Sciences Corp., specializes in providing voice and data networking services for companies with overseas operations. The company has 824 employees.

Despite a return to profitability and a promising new venture in Japan, America Online Inc. saw its shares fall more than 10% on Wednesday after the computer online services company reported earnings that disappointed some Wall Street investors. The Vienna, Va.-based firm said it earned $15.1 million in the first three months of the year, contrasted with a net loss of $3.3 million during the same period a year ago.

Why did it happen? What does it mean? Yes, it is true that the stock market's record decline on Monday was caused by panic selling. Investors in record numbers sold stocks or mutual funds out of simple fear that the value of their investments would decline. And their very selling caused further declines in those values. Selling of U.S. stocks began in foreign markets before most Americans were awake and continued throughout the trading day in the United States.