Nation digest 09/18/02

Production in industrial sector drops in August

WASHINGTON -- The nation's industrial sector -- hardest hit by last year's recession -- stumbled in August, with production falling for the first time in eight months.

While the Federal Reserve's report Tuesday disappointed economists, most viewed the development more as a rough patch than a sign that the economy might slide back into recession.

Turning in its worst performance this year, output at the nation's factories, utilities and mines fell by 0.3 percent in August from the previous month.

Much of the weakness came from a sharp, 2.5 percent drop in output at gas and electric utilities, something economists didn't view as worrisome because these figures tend to bounce around from month to month.

McDonald's reduces estimate of 2002 profits

CHICAGO -- McDonald's Corp. said Tuesday that weaker-than-expected sales in the United States and Europe this summer have prompted it to reduce its estimate of 2002 profits, dropping its stock to a seven-year low.

The hamburger giant also said it will slow the pace of new restaurant openings abroad.

McDonald's shares fell $2.39, or 11 percent, to $19.30 in early afternoon trading on the New York Stock Exchange -- the lowest level since October 1995.

McDonald's hopes to jump-start U.S. sales and its declining stock price with a plan that initially calls for selling two sandwiches -- the Big 'N' Tasty and McChicken -- for $1 each next month, followed by an eight-item "dollar menu" in November.

Lawyer accused of having sex with client sued

SEATTLE -- King County filed suit against a public defender accused of having sex with her murder-defendant client in jail and against her employer, seeking $800,000 to cover expected trial delay costs.

The civil lawsuit filed Thursday against Theresa Olson and The Defender Association, the largest of four groups that contract with the county to represent indigent clients, alleges the public defense contract was violated.

The damage figure reflects what the county already has paid for the defense of Sebastian Burns, who is charged with three counts of aggravated first-degree murder in three 1994 beating deaths.

A jail sergeant said he saw Olson, 43, having sex with Burns, 26, in a jailhouse conference room on Aug. 10.

E-mail ending of affair preceded murder-suicide

NEW YORK -- An insurance executive who killed two co-workers and himself in an apparent love-triangle slaying had recently received an e-mail from the woman ending their relationship, investigators said Tuesday.

The shootings took place at Empire Blue Cross and Blue Shield's offices near Times Square, where the health insurance company temporarily relocated after the Sept. 11 terrorist attacks. The employees found dead had escaped from the World Trade Center.

John Harrison, 53, a former FBI agent and assistant vice president at Empire Blue Cross, apparently called subordinates Vincent LaBianca, 34, and Isabel Munoz, 36, into his office Monday morning, before most employees had arrived.

-- From wire reports