( S ( S-TPC-3 ( SBAR-ADV ( IN While ) ( S ( NP-SBJ ( NNP Wall ) ( NNP Street ) ) ( VP ( VBZ is ) ( VP ( VBG retreating ) ( PP-CLR ( IN from ) ( NP ( JJ computer-driven ) ( NN program ) ( NN trading ) ) ) ) ) ) ) ( NP-SBJ-1 ( JJ big ) ( JJ institutional ) ( NNS investors ) ) ( VP ( VBP are ) ( ADJP-PRD ( JJ likely ) ( S ( VP ( TO to ) ( VP ( VB continue ) ( NP ( DT these ) ( NNS strategies ) ) ( PP-MNR ( IN at ) ( NP ( JJ full ) ( NN blast ) ) ) ( S-ADV ( VP ( ADVP ( RB further ) ) ( VBG roiling ) ( NP ( DT the ) ( NN stock ) ( NN market ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( VBG trading ) ( NNS executives ) ) ( VP ( VBP say ) ) )

While Wall Street is retreating from computer-driven program trading big institutional investors are likely to continue these strategies at full blast further roiling the stock market trading executives say


( S ( S-ADV ( VP ( VBG Bowing ) ( PP-CLR ( TO to ) ( NP ( DT a ) ( VBG mounting ) ( NN public ) ( NN outcry ) ) ) ) ) ( NP-SBJ-1 ( NP ( QP ( CD three ) ( JJR more ) ) ( JJ major ) ( NNS securities ) ( NNS firms ) ) ( NP ( NP ( NNP Bear ) ( NNP Stearns ) ( CC & ) ( NNP Co. ) ( NNP Inc. ) ) ( NP ( NNP Morgan ) ( NNP Stanley ) ( CC & ) ( NNP Co. ) ) ( CC and ) ( NP ( NNP Oppenheimer ) ( CC & ) ( NNP Co. ) ) ) ) ( VP ( VBD announced ) ( NP-TMP ( NNP Friday ) ) ( SBAR ( S ( NP-SBJ ( PRP they ) ) ( VP ( MD would ) ( VP ( VB suspend ) ( NP ( NP ( NN stock-index ) ( NN arbitrage ) ( NN trading ) ) ( PP ( IN for ) ( NP ( PRP$ their ) ( JJ own ) ( NNS accounts ) ) ) ) ) ) ) ) ) )

Bowing to a mounting public outcry three more major securities firms Bear Stearns & Co. Inc. Morgan Stanley & Co. and Oppenheimer & Co. announced Friday they would suspend stock-index arbitrage trading for their own accounts


( S ( NP-SBJ ( NNP PaineWebber ) ( NNP Group ) ( NNP Inc. ) ) ( VP ( VBD announced ) ( NP ( NP ( DT a ) ( NN pullback ) ) ) ( PP-TMP ( IN on ) ( NP ( NNP Thursday ) ) ) ( PP-1 ( IN from ) ( NP ( NP ( NN stock-index ) ( NN arbitrage ) ) ( NP ( NP ( DT a ) ( JJ controversial ) ( NN program-trading ) ( NN strategy ) ) ( VP ( VBN blamed ) ( PP ( IN by ) ( NP-LGS ( JJ many ) ( NNS investors ) ) ) ( PP-CLR ( IN for ) ( S-NOM ( VP ( VBG encouraging ) ( NP ( JJ big ) ( NN stock-market ) ( NNS swings ) ) ) ) ) ) ) ) ) ) )

PaineWebber Group Inc. announced a pullback on Thursday from stock-index arbitrage a controversial program-trading strategy blamed by many investors for encouraging big stock-market swings


( S ( SBAR-ADV ( IN Though ) ( S ( NP-SBJ-1 ( DT the ) ( NN trading ) ( NNS halts ) ) ( VP ( VBP are ) ( VP ( VBN offered ) ( PP-CLR ( IN as ) ( NP ( NP ( DT a ) ( NN sign ) ) ( PP ( IN of ) ( NP ( NP ( NN concern ) ) ( PP ( IN about ) ( NP ( JJ recent ) ( NN stock ) ( NN market ) ( NN volatility ) ) ) ) ) ) ) ) ) ) ) ( NP-SBJ-2 ( JJS most ) ( NNP Wall ) ( NNP Street ) ( NNS firms ) ) ( VP ( VBP remain ) ( ADJP-PRD ( JJ open ) ( S ( VP ( TO to ) ( VP ( VB handle ) ( NP ( NN program ) ( NN trading ) ) ( PP ( IN for ) ( NP ( NNS customers ) ) ) ) ) ) ) ) )

Though the trading halts are offered as a sign of concern about recent stock market volatility most Wall Street firms remain open to handle program trading for customers


( S ( NP-SBJ ( VBG Trading ) ( NNS executives ) ) ( VP ( ADVP-MNR ( RB privately ) ) ( VBP say ) ( SBAR ( IN that ) ( S ( NP-SBJ-2 ( NP ( JJ huge ) ( NN stock-index ) ( NNS funds ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBP dwarf ) ( NP ( NNP Wall ) ( NNP Street ) ( NNS firms ) ) ( PP ( IN in ) ( NP ( NP ( NNS terms ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( NN size ) ) ( PP ( IN of ) ( NP ( PRP$ their ) ( NN program ) ( NNS trades ) ) ) ) ) ) ) ) ) ) ) ( VP ( MD will ) ( VP ( VB continue ) ( S ( VP ( TO to ) ( VP ( VB launch ) ( NP ( JJ big ) ( NNS programs ) ) ( PP-CLR ( IN through ) ( NP ( DT the ) ( NN stock ) ( NN market ) ) ) ) ) ) ) ) ) ) ) )

Trading executives privately say that huge stock-index funds which dwarf Wall Street firms in terms of the size of their program trades will continue to launch big programs through the stock market


( S ( S-TPC-1 ( NP-SBJ ( NP ( NNP Wells ) ( NNP Fargo ) ( NNP Investment ) ( NNPS Advisers ) ) ( NP ( NNPS Bankers ) ( NNP Trust ) ( NNP Co. ) ) ( CC and ) ( NP ( NNP Mellon ) ( NNP Capital ) ( NNP Management ) ) ) ( VP ( VBP are ) ( PP-LOC-PRD ( IN among ) ( NP ( NP ( DT the ) ( JJ top ) ( NN stock-index ) ( NN arbitrage ) ( NNS clients ) ) ( PP ( IN of ) ( NP ( NNP Wall ) ( NNP Street ) ) ) ) ) ) ) ( NP-SBJ ( VBG trading ) ( NNS executives ) ) ( VP ( VBP say ) ) )

Wells Fargo Investment Advisers Bankers Trust Co. and Mellon Capital Management are among the top stock-index arbitrage clients of Wall Street trading executives say


( S ( NP-SBJ ( DT These ) ( JJ huge ) ( NN stock-index ) ( NNS funds ) ) ( VP ( VBP build ) ( NP ( NP ( NNS portfolios ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VP ( VBP match ) ( NP ( NP ( DT the ) ( NNP S&P ) ( CD 500 ) ( NN stock ) ( NN index ) ) ( CC or ) ( NP ( JJ other ) ( NN stock ) ( NNS indexes ) ) ) ) ( CC and ) ( VP ( ADVP-TMP ( RB frequently ) ) ( VBP swap ) ( PP-CLR ( IN between ) ( NP ( NNS stocks ) ( CC and ) ( NNS futures ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB capture ) ( NP ( NNS profits ) ) ) ) ) ) ) ) ) ) ) )

These huge stock-index funds build portfolios that match the S&P 500 stock index or other stock indexes and frequently swap between stocks and futures to capture profits


( SINV ( S-TPC-1 ( NP-SBJ ( PRP They ) ) ( VP ( MD will ) ( VP ( VB do ) ( NP ( PRP it ) ) ( NP-TMP ( NP ( DT every ) ( NN chance ) ) ( SBAR ( S ( NP-SBJ ( PRP they ) ) ( VP ( VBP get ) ) ) ) ) ) ) ) ( VP ( VBD said ) ) ( NP-SBJ ( CD one ) ( JJ program-trading ) ( NN executive ) ) )

They will do it every chance they get said one program-trading executive


( S ( S-TPC-2 ( ADVP ( RB Consequently ) ) ( NP-SBJ-1 ( NP ( JJ abrupt ) ( NNS swings ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NN stock ) ( NN market ) ) ) ) ( VP ( VBP are ) ( RB not ) ( ADJP-PRD ( JJ likely ) ( S ( VP ( TO to ) ( VP ( VB disappear ) ( ADVP-TMP ( RB anytime ) ( RB soon ) ) ) ) ) ) ) ) ( NP-SBJ ( PRP they ) ) ( VP ( VBP say ) ) )

Consequently abrupt swings in the stock market are not likely to disappear anytime soon they say


( S ( PP ( IN In ) ( NP ( NN fact ) ) ) ( PP ( IN without ) ( S-NOM ( NP-SBJ ( NNP Wall ) ( NNP Street ) ( NNS firms ) ) ( VP ( VBG trading ) ( PP ( IN for ) ( NP ( PRP$ their ) ( JJ own ) ( NNS accounts ) ) ) ) ) ) ( NP-SBJ ( NP ( DT the ) ( NN stock-index ) ( NN arbitrage ) ( NN trading ) ( NNS opportunities ) ) ( PP ( IN for ) ( NP ( DT the ) ( JJ big ) ( NNS funds ) ) ) ) ( VP ( MD may ) ( VP ( VB be ) ( ADJP-PRD ( ADVP ( PDT all ) ( DT the ) ( RBR more ) ) ( JJ abundant ) ) ) ) )

In fact without Wall Street firms trading for their own accounts the stock-index arbitrage trading opportunities for the big funds may be all the more abundant


( SINV ( S-TPC-1 ( NP-SBJ ( JJR More ) ( NNS customers ) ) ( VP ( MD may ) ( VP ( VB come ) ( PP-DIR ( TO to ) ( NP ( PRP us ) ) ) ( ADVP-TMP ( RB now ) ) ) ) ) ( VP ( VBD said ) ) ( NP-SBJ ( NP ( NNP James ) ( NNP Cayne ) ) ( NP ( NP ( NN president ) ) ( PP ( IN of ) ( NP ( NNP Bear ) ( NNP Stearns ) ( NNP Cos ) ) ) ) ) )

More customers may come to us now said James Cayne president of Bear Stearns Cos


( S ( NP-SBJ ( NP ( NNS Executives ) ) ( SBAR ( WHNP-1 ( WP who ) ) ( S ( VP ( VBP manage ) ( NP ( DT these ) ( NNS funds ) ) ) ) ) ) ( VP ( VBP see ) ( NP ( NP ( DT the ) ( JJ current ) ( NN debate ) ) ( PP ( IN over ) ( NP ( NN program ) ( NN trading ) ) ) ) ( PP-CLR ( IN as ) ( NP ( NP ( DT a ) ( NN repeat ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( NN concern ) ) ( VP ( VBN expressed ) ( PP-TMP ( IN after ) ( NP ( DT the ) ( CD 1987 ) ( NN crash ) ) ) ) ) ) ) ) ) )

Executives who manage these funds see the current debate over program trading as a repeat of the concern expressed after the 1987 crash


( S ( NP-SBJ ( PRP They ) ) ( VP ( VBD noted ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NP ( NNS studies ) ) ( VP ( VBN completed ) ( PP-TMP ( IN after ) ( NP ( DT the ) ( CD 1987 ) ( NN crash ) ) ) ) ) ( VP ( VBD exonerated ) ( NP ( NN program ) ( NN trading ) ) ( PP-CLR ( IN as ) ( NP ( NP ( DT a ) ( NN source ) ) ( PP ( IN of ) ( NP ( NN volatility ) ) ) ) ) ) ) ) ) )

They noted that studies completed after the 1987 crash exonerated program trading as a source of volatility


( SINV ( S-TPC-2 ( NP-SBJ ( NP ( DT The ) ( NNS issues ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBP are ) ( PRN ( ADVP-TMP ( RB now ) ) ) ( VP ( VBG being ) ( VP ( VBN raised ) ( PP-MNR ( IN in ) ( NP ( JJ classic ) ( JJ anti-intellectual ) ( NN fashion ) ) ) ) ) ) ) ) ) ( VP ( VBP fly ) ( PP-CLR ( IN in ) ( NP ( NP ( DT the ) ( NN face ) ) ( PP ( IN of ) ( NP ( NP ( DT a ) ( NN number ) ) ( PP ( IN of ) ( NP ( JJ post-crash ) ( NNS studies ) ) ) ) ) ) ) ) ) ( VP ( VBD said ) ) ( NP-SBJ ( NP ( NNP Fred ) ( NNP Grauer ) ) ( NP ( NP ( NN chairman ) ) ( PP ( IN of ) ( NP ( NNP Wells ) ( NNP Fargo ) ( NNP Investment ) ( NNPS Advisers ) ) ) ) ) )

The issues that are now being raised in classic anti-intellectual fashion fly in the face of a number of post-crash studies said Fred Grauer chairman of Wells Fargo Investment Advisers


( S ( NP-SBJ ( DT A ) ( NNPS Bankers ) ( NNP Trust ) ( NN spokesman ) ) ( VP ( VBD said ) ( SBAR ( IN that ) ( S ( NP-SBJ-1 ( NP ( DT the ) ( NN company ) ( POS 's ) ) ( NN investment ) ( NN arm ) ) ( VP ( VBZ uses ) ( NP ( NN stock-index ) ( NN arbitrage ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB enhance ) ( NP ( NP ( NNS investors ) ( POS ' ) ) ( NNS returns ) ) ) ) ) ) ) ) ) )

A Bankers Trust spokesman said that the company 's investment arm uses stock-index arbitrage to enhance investors ' returns


( S ( NP-SBJ ( NP ( NNS Officials ) ) ( PP-LOC ( IN at ) ( NP ( NNP Mellon ) ( NNP Capital ) ) ) ) ( VP ( VBD were ) ( ADJP-PRD ( JJ unavailable ) ( PP ( IN for ) ( NP ( NN comment ) ) ) ) ) )

Officials at Mellon Capital were unavailable for comment


( S ( NP-SBJ ( NN Stock-index ) ( NNS funds ) ) ( VP ( VBP have ) ( VP ( VBN grown ) ( PP-CLR ( IN in ) ( NP ( NN popularity ) ) ) ( PP-TMP ( IN over ) ( NP ( DT the ) ( JJ past ) ( NN decade ) ) ) ( SBAR-TMP ( IN as ) ( S ( NP-SBJ ( NP ( NN pension ) ( NNS funds ) ) ( CC and ) ( NP ( JJ other ) ( JJ institutional ) ( NNS investors ) ) ) ( VP ( VBP have ) ( VP ( VBN sought ) ( NP ( NP ( DT a ) ( NN low-cost ) ( NN way ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB match ) ( NP ( NP ( DT the ) ( NN performance ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( NN stock ) ( NN market ) ) ( PP ( IN as ) ( NP ( DT a ) ( NN whole ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Stock-index funds have grown in popularity over the past decade as pension funds and other institutional investors have sought a low-cost way to match the performance of the stock market as a whole


( S ( NP-SBJ ( NP ( JJ Many ) ( NN money ) ( NNS managers ) ) ( SBAR ( WHNP-501 ( WP who ) ) ( S ( VP ( VBP trade ) ( NP ( NN stock ) ) ( ADVP-MNR ( RB actively ) ) ) ) ) ) ( VP ( VBP have ) ( NP ( NP ( NN trouble ) ) ( S-NOM ( VP ( ADVP-MNR ( RB consistently ) ) ( VBG matching ) ( NP ( NP ( DT the ) ( CD S&P-500 ) ( POS 's ) ) ( NNS returns ) ) ) ) ) ) )

Many money managers who trade stock actively have trouble consistently matching the S&P-500 's returns


( S ( NP-SBJ ( DT Some ) ( NN stock-index ) ( NNS funds ) ) ( VP ( VBP are ) ( ADJP-PRD ( JJ huge ) ) ) )

Some stock-index funds are huge


( S ( NP-SBJ-1 ( NNP Wells ) ( NNP Fargo ) ( NNP Investment ) ( NNPS Advisers ) ) ( PRN ( PP ( IN for ) ( NP ( NN example ) ) ) ) ( VP ( VBD managed ) ( NP ( NP ( NP ( QP ( CD 25 ) ( CD billion ) ) ) ( PP ( IN in ) ( NP ( NN stock ) ( NNS investments ) ) ) ) ) ( S-ADV ( VP ( VBG tracking ) ( NP ( DT the ) ( NNP S&P ) ( CD 500 ) ) ( PP-TMP ( IN at ) ( NP ( NP ( DT the ) ( NN end ) ) ( PP ( IN of ) ( NP ( NNP June ) ) ) ) ) ) ) ( PP ( VBG according ) ( PP ( TO to ) ( NP ( NP ( NNP Standard ) ( CC & ) ( NNP Poor ) ( POS 's ) ) ( NNP Corp ) ) ) ) ) )

Wells Fargo Investment Advisers for example managed 25 billion in stock investments tracking the S&P 500 at the end of June according to Standard & Poor 's Corp


( S ( NP-SBJ ( NNP Mr. ) ( NNP Grauer ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ-1 ( NP ( QP ( CD 2 ) ( CD billion ) ) ) ( PP ( IN of ) ( NP ( WDT that ) ) ) ) ( VP ( VBZ is ) ( VP ( VBN used ) ( PP-CLR ( IN in ) ( NP ( JJ active ) ( NN index ) ( NN arbitrage ) ) ) ) ) ) ) ) )

Mr. Grauer said 2 billion of that is used in active index arbitrage


( S ( S ( NP-SBJ ( NN Stock-index ) ( NNS funds ) ) ( ADVP-TMP ( RB frequently ) ) ( VP ( VBP use ) ( NP ( DT the ) ( NNS futures ) ( NNS markets ) ) ( PP-CLR ( IN as ) ( NP ( DT a ) ( VBG hedging ) ( NN tool ) ) ) ) ) ( CC but ) ( S ( NP-SBJ ( DT that ) ) ( VP ( VBZ is ) ( NP-PRD ( NP ( DT a ) ( ADJP ( RB far ) ( RBR less ) ( JJ aggressive ) ) ( NN strategy ) ) ( PP ( IN than ) ( NP ( NP ( NN stock-index ) ( NN arbitrage ) ) ( SBAR ( WHPP-1 ( IN in ) ( WHNP ( WDT which ) ) ) ( S ( NP-SBJ-2 ( NNS traders ) ) ( VP ( VBP buy ) ( CC and ) ( VBP sell ) ( NP ( NP ( JJ big ) ( NNS blocks ) ) ( PP ( IN of ) ( NP ( NNS stocks ) ) ) ( PP ( IN with ) ( NP ( NP ( VBG offsetting ) ( NNS trades ) ) ( PP-LOC ( IN in ) ( NP ( NN stock-index ) ( NNS futures ) ) ) ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB profit ) ( PP-CLR ( IN from ) ( NP ( NN price ) ( NNS differences ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Stock-index funds frequently use the futures markets as a hedging tool but that is a far less aggressive strategy than stock-index arbitrage in which traders buy and sell big blocks of stocks with offsetting trades in stock-index futures to profit from price differences


( S ( NP-SBJ ( NP ( DT The ) ( JJ 190-point ) ( NN plunge ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NN stock ) ( NN market ) ) ) ( NP-TMP ( NNP Oct. ) ( CD 13 ) ) ) ( VP ( VBZ has ) ( VP ( VBN heightened ) ( NP ( NP ( NNS concerns ) ) ( PP ( IN about ) ( NP ( NN volatility ) ) ) ) ) ) )

The 190-point plunge in the stock market Oct. 13 has heightened concerns about volatility


( S ( CC And ) ( SBAR-ADV ( IN while ) ( S ( NP-SBJ ( NP ( NNS signs ) ) ( PP ( IN of ) ( NP ( NP ( DT an ) ( JJ economic ) ( NN slowdown ) ) ( NP ( JJR softer ) ( JJ corporate ) ( NNS earnings ) ) ( CC and ) ( NP ( NP ( NNS troubles ) ) ( PP ( IN with ) ( NP ( NN takeover ) ( VBG financing ) ) ) ) ) ) ) ( ADVP ( DT all ) ) ( VP ( VBP have ) ( VP ( VBN contributed ) ( PP-CLR ( TO to ) ( NP ( NP ( DT the ) ( NN stock ) ( NN market ) ( POS 's ) ) ( JJ recent ) ( NN weakness ) ) ) ) ) ) ) ( NP-SBJ-1 ( JJ many ) ( NNS investors ) ) ( VP ( VBD rushed ) ( S ( VP ( TO to ) ( VP ( VB blame ) ( NP ( NN program ) ( NN trading ) ) ( PP-CLR ( IN for ) ( NP ( VBG aggravating ) ( NN market ) ( NNS swings ) ) ) ) ) ) ) )

And while signs of an economic slowdown softer corporate earnings and troubles with takeover financing all have contributed to the stock market 's recent weakness many investors rushed to blame program trading for aggravating market swings


( S ( NP-SBJ ( NP ( DT The ) ( NNP Wall ) ( NNP Street ) ( NNS firms ) ( POS ' ) ) ( NN pullback ) ) ( VP ( VBD followed ) ( NP ( NP ( PRP$ their ) ( JJ recent ) ( NN blacklisting ) ) ( PP ( IN by ) ( NP ( JJ several ) ( JJ institutional ) ( NNS investors ) ) ) ) ) )

The Wall Street firms ' pullback followed their recent blacklisting by several institutional investors


( S ( NP-TMP ( JJ Last ) ( NNP Tuesday ) ) ( NP-SBJ ( NP ( NNP Kemper ) ( NNP Corp. ) ( POS 's ) ) ( NNP Kemper ) ( NNP Financial ) ( NNPS Services ) ( NNP Inc. ) ( NN unit ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ ( PRP it ) ) ( VP ( MD would ) ( ADVP-TMP ( RB no ) ( RB longer ) ) ( VP ( VB trade ) ( PP-CLR ( IN with ) ( NP ( NP ( NNS firms ) ) ( VP ( VBN committed ) ( PP-CLR ( TO to ) ( NP ( NN stock-index ) ( NN arbitrage ) ) ) ) ( PP ( VBG including ) ( NP ( NP ( DT the ) ( CD three ) ) ( SBAR ( WHNP-1 ( IN that ) ) ( S ( ADVP-TMP ( RB later ) ) ( VP ( VBN suspended ) ( NP ( NN stock-index ) ( NN arbitrage ) ( NN trading ) ) ( PP-TMP ( IN on ) ( NP ( NNP Friday ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Last Tuesday Kemper Corp. 's Kemper Financial Services Inc. unit said it would no longer trade with firms committed to stock-index arbitrage including the three that later suspended stock-index arbitrage trading on Friday


( S ( NP-SBJ ( NP ( NNP Phoenix ) ( NNP Mutual ) ( NNP Life ) ( NNP Insurance ) ( NNP Co. ) ) ( CC and ) ( NP ( NNP Founders ) ( NNP Asset ) ( NNP Management ) ( NNP Inc. ) ) ) ( ADVP ( RB also ) ) ( VP ( VBD cut ) ( PRT ( RP off ) ) ( NP ( NP ( NN brokerage ) ( NNS firms ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBP engage ) ( PP-CLR ( IN in ) ( NP ( NN program ) ( NN trading ) ) ) ) ) ) ) ) )

Phoenix Mutual Life Insurance Co. and Founders Asset Management Inc. also cut off brokerage firms that engage in program trading


( S ( SBAR-ADV ( IN Though ) ( S ( NP-SBJ ( PRP it ) ) ( VP ( VBZ is ) ( ADVP-TMP ( RB still ) ) ( VP ( VBG doing ) ( NP ( NN stock-index ) ( NN arbitrage ) ( NNS trades ) ) ( PP ( IN for ) ( NP ( NNS customers ) ) ) ) ) ) ) ( NP-SBJ-2 ( NP ( NP ( NNP Morgan ) ( NNP Stanley ) ( POS 's ) ) ( NN trading ) ( NN halt ) ) ( PP ( IN for ) ( NP ( PRP$ its ) ( JJ own ) ( NN account ) ) ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ likely ) ( S ( VP ( TO to ) ( VP ( VB shake ) ( PRT ( RP up ) ) ( NP ( NP ( NNS firms ) ) ( PP ( JJ such ) ( IN as ) ( NP ( NNP Kidder ) ( NNP Peabody ) ( CC & ) ( NNP Co. ) ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( ADVP-TMP ( RB still ) ) ( VP ( VBP do ) ( NP ( JJ such ) ( NNS trades ) ) ( PP ( IN for ) ( NP ( PRP$ their ) ( JJ own ) ( NN account ) ) ) ) ) ) ) ) ) ) ) ) )

Though it is still doing stock-index arbitrage trades for customers Morgan Stanley 's trading halt for its own account is likely to shake up firms such as Kidder Peabody & Co. that still do such trades for their own account


( S ( NP-SBJ ( NNP Morgan ) ( NNP Stanley ) ) ( VP ( VBZ has ) ( ADVP-MNR ( RB consistently ) ) ( VP ( VBN been ) ( NP-PRD ( NP ( CD one ) ) ( PP ( IN of ) ( NP ( DT the ) ( JJ top ) ( NN stock-index ) ( NN arbitrage ) ( NNS traders ) ) ) ) ( PP-TMP ( IN in ) ( NP ( JJ recent ) ( NNS months ) ) ) ) ) )

Morgan Stanley has consistently been one of the top stock-index arbitrage traders in recent months


( S ( ADVP ( RB Indeed ) ) ( NP-SBJ ( NP ( NP ( NNP Morgan ) ( NNP Stanley ) ( POS 's ) ) ( NN president ) ) ( NP ( NNP Richard ) ( NNP B. ) ( NNP Fisher ) ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ ( DT the ) ( NN firm ) ) ( VP ( VBZ is ) ( VP ( VBG putting ) ( PRT ( RP up ) ) ( NP ( NP ( NN money ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB form ) ( NP ( NP ( DT a ) ( NN group ) ) ( PP ( IN of ) ( NP ( NP ( NNS regulators ) ) ( NP ( NNS investors ) ) ( CC and ) ( NP ( NN investment ) ( NNS banks ) ) ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB find ) ( PRT ( RP out ) ) ( SBAR-ADV ( IN if ) ( S ( NP-SBJ ( JJ stock-index ) ( NN arbitrage ) ) ( VP ( ADVP-MNR ( RB artificially ) ) ( VBZ induces ) ( NP ( NN stock-market ) ( NN volatility ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Indeed Morgan Stanley 's president Richard B. Fisher said the firm is putting up money to form a group of regulators investors and investment banks to find out if stock-index arbitrage artificially induces stock-market volatility


( S ( S-TPC-4 ( NP-SBJ-3 ( PRP We ) ) ( VP ( VBP have ) ( S ( VP ( TO to ) ( VP ( VP ( VB clear ) ( PRT ( RP up ) ) ( NP ( DT these ) ( NNS issues ) ) ) ( CC and ) ( VP ( VB find ) ( PRT ( RP out ) ) ( SBAR-NOM ( WHNP-2 ( WHNP ( WP what ) ) ) ( S ( VP ( VBZ is ) ( ADJP-PRD ( JJ present ) ) ( SBAR-5 ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBZ is ) ( VP ( VBG creating ) ( NP ( JJ artificial ) ( NN volatility ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( NNP Mr. ) ( NNP Fisher ) ) ( VP ( VBD said ) ) )

We have to clear up these issues and find out what is present that is creating artificial volatility Mr. Fisher said


( S ( NP-SBJ ( EX There ) ) ( VP ( VBZ is ) ( NP-PRD ( NP ( DT no ) ( NN question ) ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NP ( NN investor ) ( NN confidence ) ) ( PRN ( PP ( IN in ) ( NP ( DT the ) ( NN stock ) ( NN market ) ) ) ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ critical ) ) ) ) ) ) ) )

There is no question that investor confidence in the stock market is critical


( S ( S-ADV ( VP ( VBG Joining ) ( NP ( NP ( DT the ) ( NN call ) ) ( PP ( IN for ) ( NP ( NP ( DT some ) ( NN kind ) ) ( PP ( IN of ) ( NP ( NP ( NN study ) ) ( CC or ) ( NP ( JJ regulatory ) ( NN action ) ) ) ) ) ) ) ) ) ( NP-SBJ-2 ( NNP Merrill ) ( NNP Lynch ) ( CC & ) ( NNP Co. ) ) ( VP ( VBD recommended ) ( NP ( NP ( JJ program-trading ) ( NNS reforms ) ) ) ( NP-TMP ( JJ late ) ( NNP Friday ) ) ( PP-1 ( VBG including ) ( NP ( NP ( NP ( JJR higher ) ( NNS margins ) ) ( PP ( IN on ) ( NP ( NN stock-index ) ( NNS futures ) ) ) ) ( CC and ) ( NP ( JJR greater ) ( JJ regulatory ) ( NN coordination ) ) ) ) ) )

Joining the call for some kind of study or regulatory action Merrill Lynch & Co. recommended program-trading reforms late Friday including higher margins on stock-index futures and greater regulatory coordination


( S ( ADVP-MNR ( RB Separately ) ) ( NP-SBJ ( NP ( NNP Mr. ) ( NNP Cayne ) ) ( PP ( IN of ) ( NP ( NNP Bear ) ( NNP Stearns ) ) ) ) ( VP ( VBD said ) ( SBAR ( S ( NP-SBJ-1 ( PRP$ his ) ( NN firm ) ) ( VP ( VBZ is ) ( VP ( VBG working ) ( PP-CLR ( IN with ) ( NP ( NNS regulators ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB balance ) ( NP ( NN margin ) ( NNS requirements ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB enhance ) ( NP ( NN stabilization ) ) ) ) ) ) ) ) ) ) ) ) ) )

Separately Mr. Cayne of Bear Stearns said his firm is working with regulators to balance margin requirements to enhance stabilization


( S ( NP-SBJ ( NN Margin ) ( NNS rules ) ) ( VP ( VBP determine ) ( NP ( NP ( DT the ) ( JJ minimum ) ( NN amount ) ) ( PP ( IN of ) ( NP ( NN cash ) ) ) ( SBAR ( S ( NP-SBJ-2 ( DT an ) ( NN investor ) ) ( VP ( MD must ) ( VP ( VB put ) ( PRT ( RP up ) ) ( SBAR-TMP ( WHADVP-3 ( WRB when ) ) ( S ( VP ( VBG buying ) ( NP ( DT a ) ( NN security ) ) ) ) ) ) ) ) ) ) ) )

Margin rules determine the minimum amount of cash an investor must put up when buying a security


( S ( NP-SBJ ( JJ Current ) ( NNS rules ) ) ( VP ( VBP permit ) ( S ( NP-SBJ ( NNS investors ) ) ( VP ( TO to ) ( VP ( VB put ) ( PRT ( RP up ) ) ( NP ( NP ( JJR less ) ( NN cash ) ) ( PP ( IN for ) ( NP ( NNS futures ) ) ) ( PP ( IN than ) ( PP ( IN for ) ( NP ( NNS stocks ) ) ) ) ) ) ) ) ) )

Current rules permit investors to put up less cash for futures than for stocks


( S ( NP-SBJ ( DT Some ) ( NNS observers ) ) ( VP ( VBP say ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NP ( JJ different ) ( NNS rules ) ) ( VP ( VBG governing ) ( NP ( NN stock ) ( CC and ) ( NNS futures ) ( NNS markets ) ) ) ) ( VP ( VBP are ) ( ADJP-PRD ( RB partly ) ( JJ responsible ) ( PP ( IN for ) ( NP ( NN volatility ) ) ) ) ) ) ) ) )

Some observers say that different rules governing stock and futures markets are partly responsible for volatility


( S-2 ( NP-SBJ ( DT These ) ( NNS rules ) ) ( PRN ( S ( NP-SBJ ( PRP they ) ) ( VP ( VBP say ) ) ) ) ( VP ( VBP permit ) ( NP ( NP ( NP ( ADJP ( JJR faster ) ( CC and ) ( JJR cheaper ) ) ( NN trading ) ) ( PP ( IN in ) ( NP ( NNS futures ) ) ) ( PP ( IN than ) ( PP ( IN in ) ( NP ( NNS stocks ) ) ) ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( ADVP-TMP ( RB frequently ) ) ( VP ( VBZ knocks ) ( NP ( DT the ) ( CD two ) ( NNS markets ) ) ( PP-CLR ( IN out ) ( PP ( IN of ) ( NP ( NN line ) ) ) ) ) ) ) ) ) )

These rules they say permit faster and cheaper trading in futures than in stocks which frequently knocks the two markets out of line


( S ( S ( NP-SBJ-1 ( NN Stock-index ) ( NN arbitrage ) ) ( PRN ( SBAR-PRP ( IN because ) ( S ( NP-SBJ ( PRP it ) ) ( VP ( VP ( VBZ sells ) ( NP ( DT the ) ( ADJP ( JJR more ) ( JJ expensive ) ) ( NN market ) ) ) ( CC and ) ( VP ( VBZ buys ) ( NP ( DT the ) ( JJR cheaper ) ( CD one ) ) ) ) ) ) ) ( VP ( VBZ attempts ) ( S ( VP ( TO to ) ( VP ( VB reestablish ) ( NP ( NP ( DT the ) ( NN link ) ) ( PP ( IN between ) ( NP ( DT the ) ( NN stock ) ( CC and ) ( NNS futures ) ( NNS markets ) ) ) ) ) ) ) ) ) ( CC and ) ( S ( NP-SBJ ( DT the ) ( NNS adjustments ) ) ( VP ( VBP are ) ( ADVP-TMP ( RB often ) ) ( ADJP-PRD ( JJ abrupt ) ) ) ) )

Stock-index arbitrage because it sells the more expensive market and buys the cheaper one attempts to reestablish the link between the stock and futures markets and the adjustments are often abrupt


( S ( CC But ) ( NP-SBJ ( JJ unequal ) ( NN trading ) ( NNS rules ) ) ( VP ( VBP allow ) ( S ( NP-SBJ ( DT the ) ( NNS futures ) ( NN market ) ) ( VP ( TO to ) ( VP ( VB trade ) ( ADVP-MNR ( RB differently ) ( PP ( IN from ) ( NP ( NNS stocks ) ) ) ) ) ) ) ( SBAR-ADV ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBZ invites ) ( NP ( NP ( JJ frequent ) ( NNS bouts ) ) ( PP ( IN of ) ( NP ( NN stock-index ) ( NN arbitrage ) ) ) ) ( PP-TMP ( IN in ) ( NP ( DT the ) ( JJ first ) ( NN place ) ) ) ) ) ) ) )

But unequal trading rules allow the futures market to trade differently from stocks which invites frequent bouts of stock-index arbitrage in the first place


( SINV ( S-TPC-2 ( NP-SBJ-1 ( EX There ) ) ( VP ( VBZ has ) ( S ( VP ( TO to ) ( VP ( VB be ) ( NP-PRD ( JJR better ) ( NN coordination ) ) ( PP ( IN on ) ( NP ( DT a ) ( JJ regulatory ) ( NN basis ) ) ) ) ) ) ) ) ( VP ( VBD said ) ) ( NP-SBJ ( NP ( NNP Christopher ) ( NNP Pedersen ) ) ( NP ( NP ( NN director ) ) ( PP ( IN of ) ( NP ( NN trading ) ) ) ( PP-LOC ( IN at ) ( NP ( NNP Twenty-First ) ( NNPS Securities ) ( NNP Corp ) ) ) ) ) )

There has to be better coordination on a regulatory basis said Christopher Pedersen director of trading at Twenty-First Securities Corp


( S ( NP-SBJ ( CD One ) ( NN agency ) ) ( VP ( MD should ) ( VP ( VB have ) ( NP ( NP ( DT the ) ( NN authority ) ) ( PP ( IN over ) ( NP ( DT all ) ( NN equity ) ( NNS products ) ) ) ) ) ) )

One agency should have the authority over all equity products


( S ( NP-SBJ ( NP ( DT A ) ( NN state ) ( NN trial ) ( NN judge ) ) ( PP-LOC ( IN in ) ( NP ( NNP Illinois ) ) ) ) ( VP ( VBD gave ) ( NP ( JJ preliminary ) ( NN approval ) ) ( PP-DTV ( TO to ) ( NP ( NP ( DT a ) ( VBN proposed ) ( NN settlement ) ) ( PP ( IN of ) ( NP ( NP ( DT a ) ( NN suit ) ) ( PP ( IN against ) ( NP ( NP ( DT a ) ( NAC ( NNP Bank ) ( PP ( IN of ) ( NP ( NNP New ) ( NNP York ) ( NNP Co. ) ) ) ) ( NN unit ) ) ( NP ( NNP Irving ) ( NNP Trust ) ( NNP Co. ) ) ) ) ( PP ( IN over ) ( NP ( NP ( DT the ) ( NN interest ) ( NNS rates ) ) ( PP ( IN on ) ( NP ( NP ( NNP Irving ) ( POS 's ) ) ( JJ former ) ( CD One ) ( NNP Wall ) ( NNP Street ) ( NNP Account ) ( JJ money-market ) ( NN deposit ) ( NNS accounts ) ) ) ) ) ) ) ) ) ) )

A state trial judge in Illinois gave preliminary approval to a proposed settlement of a suit against a Bank of New York Co. unit Irving Trust Co. over the interest rates on Irving 's former One Wall Street Account money-market deposit accounts


( S ( NP-SBJ ( NP ( NNP Judge ) ( NNP Albert ) ( NNP Green ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NNP Cook ) ( NNP County ) ( NNP Circuit ) ( NNP Court ) ) ( PP-LOC ( IN in ) ( NP ( NNP Chicago ) ) ) ) ) ) ( ADVP ( RB also ) ) ( VP ( VBD recognized ) ( NP ( NP ( DT the ) ( NN suit ) ) ( VP ( VBN filed ) ( NP-TMP ( JJ last ) ( NNP May ) ) ( PP ( IN by ) ( NP-LGS ( NNP Robert ) ( CC and ) ( NNP Cynthia ) ( NNP Langendorf ) ) ) ) ) ( PP-CLR ( IN as ) ( NP ( NP ( DT a ) ( NN class ) ( NN action ) ) ( VP ( VBG covering ) ( NP ( NP ( NNS thousands ) ) ( PP ( IN of ) ( NP ( NNP Irving ) ( NNS customers ) ) ) ) ) ) ) ) )

Judge Albert Green in Cook County Circuit Court in Chicago also recognized the suit filed last May by Robert and Cynthia Langendorf as a class action covering thousands of Irving customers


( S ( NP-SBJ ( DT The ) ( NNS plaintiffs ) ) ( VP ( VBD accused ) ( NP-2 ( NNP Irving ) ) ( PP-CLR ( IN of ) ( S-NOM ( VP ( VBG paying ) ( NP ( NP ( JJR less ) ( NN interest ) ) ( SBAR ( IN than ) ( S ( VP ( VBN promised ) ( PP-LOC ( IN in ) ( NP ( DT a ) ( NN marketing ) ( NN brochure ) ) ) ) ) ) ) ) ) ) ) )

The plaintiffs accused Irving of paying less interest than promised in a marketing brochure


( S ( NP-SBJ ( NNP Irving ) ) ( VP ( VBD maintained ) ( PRN ( CC and ) ( ADVP-TMP ( RB still ) ) ( VP ( VBZ does ) ) ) ( SBAR ( IN that ) ( S ( NP-SBJ ( PRP$ its ) ( NNS actions ) ) ( VP ( VBD were ) ( ADJP-PRD ( JJ proper ) ) ( PP-LOC ( IN under ) ( NP ( NP ( PRP$ its ) ( NN account ) ( NNS agreements ) ) ( PP ( IN with ) ( NP ( NNS customers ) ) ) ) ) ) ) ) ) )

Irving maintained and still does that its actions were proper under its account agreements with customers


( S ( PP-LOC ( IN Under ) ( NP ( DT the ) ( VBN proposed ) ( NN settlement ) ) ) ( NP-SBJ ( NP ( NNS customers ) ) ( PP ( IN with ) ( NP ( NP ( JJ valid ) ( NNS claims ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB be ) ( VP ( VBN submitted ) ( PP-TMP ( IN by ) ( NP ( NNP Dec. ) ( CD 15 ) ) ) ) ) ) ) ) ) ) ) ( VP ( MD will ) ( VP ( VB receive ) ( NP ( NP ( JJ valuable ) ( NN bank ) ( NNS services ) ) ( PP ( JJ such ) ( IN as ) ( NP ( NP ( NN credit ) ( NNS cards ) ) ( PP ( IN with ) ( NP ( VBN reduced ) ( NN finance ) ( NNS charges ) ) ) ) ) ) ( PP-TMP ( IN for ) ( NP ( CD two ) ( NNS years ) ) ) ) ) )

Under the proposed settlement customers with valid claims to be submitted by Dec. 15 will receive valuable bank services such as credit cards with reduced finance charges for two years


( S ( NP-SBJ ( NP ( NNP Larry ) ( NNP Drury ) ) ( NP ( NP ( NN attorney ) ) ( PP ( IN for ) ( NP ( DT the ) ( NNS plaintiffs ) ) ) ) ) ( VP ( VBD valued ) ( NP ( DT the ) ( NN settlement ) ) ( PP-CLR ( IN at ) ( NP ( QP ( IN between ) ( CD 6 ) ( CD million ) ( CC and ) ( CD 8 ) ( CD million ) ) ) ) ) )

Larry Drury attorney for the plaintiffs valued the settlement at between 6 million and 8 million


( S ( NP-SBJ ( NP ( NP ( DT A ) ( NAC ( NNP Bank ) ( PP ( IN of ) ( NP ( NNP New ) ( NNP York ) ) ) ) ( NN spokesman ) ) ( PP-LOC ( IN in ) ( NP ( NNP Manhattan ) ) ) ) ( NP ( NNP Owen ) ( NNP Brady ) ) ) ( VP ( VBD said ) ( S ( NP-SBJ ( DT That ) ) ( VP ( VBZ 's ) ( NP-PRD ( DT the ) ( JJ maximum ) ( JJ outside ) ( NN figure ) ) ) ) ) )

A Bank of New York spokesman in Manhattan Owen Brady said That 's the maximum outside figure


( S ( SBAR-TMP ( WHADVP-1 ( WRB When ) ) ( S ( NP-SBJ ( NNP Westinghouse ) ( NNP Electric ) ( NNP Corp. ) ) ( VP ( VBD shuttered ) ( NP ( NP ( PRP$ its ) ( JJ massive ) ( NN steam ) ( NN turbine ) ( NN plant ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NNP Lester ) ) ( NP ( NNP Pa. ) ) ) ) ) ( ADVP-TMP ( NP ( CD three ) ( NNS years ) ) ( IN ago ) ) ) ) ) ( NP-SBJ ( PRP it ) ) ( VP ( VBD seemed ) ( SBAR-CLR ( IN like ) ( S ( NP-SBJ ( DT the ) ( NN company ) ) ( VP ( VBD had ) ( VP ( VBN pulled ) ( NP ( DT the ) ( NN plug ) ) ( PP-CLR ( IN on ) ( NP ( PRP$ its ) ( JJ century-old ) ( NN power ) ( NN generation ) ( NN business ) ) ) ) ) ) ) ) )

When Westinghouse Electric Corp. shuttered its massive steam turbine plant in Lester Pa. three years ago it seemed like the company had pulled the plug on its century-old power generation business


( S ( CC But ) ( ADVP-TMP ( RB now ) ) ( NP-SBJ ( NNP Westinghouse ) ) ( VP ( VP ( VBZ is ) ( VP ( VBG enjoying ) ( NP ( NP ( DT a ) ( NN resurgence ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NN demand ) ) ( PP ( IN for ) ( NP ( DT both ) ( NN steam ) ( CC and ) ( NN combustion ) ( NNS turbines ) ) ) ) ) ) ) ) ( CC and ) ( VP ( MD may ) ( ADVP ( RB even ) ) ( VP ( VB join ) ( NP ( NP ( DT the ) ( VBG growing ) ( NN legion ) ) ( PP ( IN of ) ( NP ( JJ independent ) ( JJ electric ) ( NNS producers ) ) ) ) ) ) ) )

But now Westinghouse is enjoying a resurgence in demand for both steam and combustion turbines and may even join the growing legion of independent electric producers


( S ( CC And ) ( PP ( IN with ) ( NP ( NP ( PRP$ its ) ( JJ new ) ( NN venture ) ) ( PP ( IN with ) ( NP ( NP ( NNP Japan ) ( POS 's ) ) ( NNP Mitsubishi ) ( NNP Heavy ) ( NNPS Industries ) ( NNP Ltd. ) ) ) ( VP ( VBD announced ) ( NP-TMP ( JJ last ) ( NN week ) ) ) ) ) ( NP-SBJ-1 ( PRP it ) ) ( VP ( VBZ is ) ( VP ( VBN poised ) ( S ( VP ( TO to ) ( VP ( VB penetrate ) ( NP ( NP ( VBG growing ) ( NNS markets ) ) ( ADVP-LOC ( RB overseas ) ) ) ) ) ) ) ) )

And with its new venture with Japan 's Mitsubishi Heavy Industries Ltd. announced last week it is poised to penetrate growing markets overseas


( S ( PP-TMP ( IN For ) ( NP ( NP ( DT the ) ( JJ first ) ( NN time ) ) ( PP-TMP ( IN since ) ( NP ( DT the ) ( CD mid-1970s ) ) ) ) ) ( NP-SBJ ( NNP Westinghouse ) ) ( NP-TMP ( DT this ) ( NN year ) ) ( VP ( VBZ has ) ( VP ( VBN seen ) ( NP ( NP ( DT a ) ( JJ significant ) ( NN increase ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NNS orders ) ) ( PP ( IN for ) ( NP ( NN power ) ( NNS plants ) ) ) ) ) ) ) ) )

For the first time since the mid-1970s Westinghouse this year has seen a significant increase in orders for power plants


( S ( S ( NP-SBJ ( JJS Most ) ) ( VP ( VBP are ) ( PP-PRD ( IN from ) ( NP ( NP ( JJ independent ) ( NNS producers ) ) ( CONJP ( RB instead ) ( IN of ) ) ( NP ( JJ regulated ) ( NNS utilities ) ) ) ) ) ) ( CC and ) ( S ( NP-SBJ ( NNP Westinghouse ) ) ( VP ( VBZ believes ) ( SBAR ( S ( NP-SBJ ( PRP it ) ) ( VP ( MD will ) ( VP ( VB ride ) ( NP ( NP ( DT a ) ( NN wave ) ) ( PP ( IN of ) ( NP ( NN demand ) ) ) ( VP ( VBG stretching ) ( PP-CLR ( IN over ) ( NP ( DT the ) ( JJ next ) ( CD six ) ( NNS years ) ) ) ) ) ) ) ) ) ) ) )

Most are from independent producers instead of regulated utilities and Westinghouse believes it will ride a wave of demand stretching over the next six years


( S ( NP-SBJ-1 ( NNS Analysts ) ) ( VP ( VBP agree ) ( S-ADV ( VP ( VBG predicting ) ( SBAR ( IN that ) ( S ( NP-SBJ ( DT the ) ( VBN revived ) ( NN market ) ) ( VP ( MD could ) ( VP ( ADVP-MNR ( RB significantly ) ) ( VB boost ) ( NP ( NP ( NNP Westinghouse ) ( POS 's ) ) ( NN bottom ) ( NN line ) ) ( PP-TMP ( IN in ) ( NP ( VBG coming ) ( NNS years ) ) ) ) ) ) ) ) ) ) )

Analysts agree predicting that the revived market could significantly boost Westinghouse 's bottom line in coming years


( SINV ( S-TPC-1 ( NP-SBJ-2 ( NP ( NNP Westinghouse ) ( POS 's ) ) ( NNS earnings ) ) ( VP ( MD could ) ( VP ( VB be ) ( VP ( ADVP-MNR ( RB materially ) ) ( VBN enhanced ) ( UCP-TMP ( PP ( IN in ) ( NP ( DT the ) ( CD mid-1990s ) ) ) ( CC or ) ( ADVP ( RBR sooner ) ) ) ) ) ) ) ( VP ( VBZ says ) ) ( NP-SBJ ( NP ( NNP Russell ) ( NNP L. ) ( NNP Leavitt ) ) ( PP ( IN of ) ( NP ( NNP Salomon ) ( NNPS Brothers ) ( NNP Inc ) ) ) ) )

Westinghouse 's earnings could be materially enhanced in the mid-1990s or sooner says Russell L. Leavitt of Salomon Brothers Inc


( S ( NP-SBJ ( DT The ) ( NN company ) ) ( VP ( VBZ expects ) ( NP ( NP ( DT a ) ( NN need ) ) ( PP ( IN for ) ( NP ( NP ( CD 140,000 ) ( NNS megawatts ) ) ( PP ( IN of ) ( NP ( JJ new ) ( NN generation ) ) ) ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NNP U.S. ) ) ) ( PP-TMP ( IN over ) ( NP ( DT the ) ( JJ next ) ( NN decade ) ) ) ) ) )

The company expects a need for 140,000 megawatts of new generation in the U.S. over the next decade


( S ( ADVP-TMP ( RB Already ) ) ( NP-TMP ( DT this ) ( NN year ) ) ( NP-SBJ ( PRP it ) ) ( VP ( VBZ has ) ( VP ( VBN received ) ( NP ( NP ( NP ( NP ( NNS orders ) ) ( PP-1 ( IN for ) ( NP ( CD four ) ( JJ 150-megawatt ) ( JJ advanced ) ( NN combustion ) ( NNS turbines ) ) ) ( PP-2 ( IN from ) ( NP ( NNP Florida ) ( NNP Power ) ( CC & ) ( NNP Light ) ( NNP Co. ) ) ) ) ( CC and ) ( NP ( PP=1 ( IN for ) ( NP ( CD two ) ( JJ 300-megawatt ) ( NNS plants ) ) ) ( PP=2 ( IN from ) ( NP ( NNP Intercontinental ) ( NNP Energy ) ( NNP Corp. ) ) ) ) ) ( PP-LOC ( IN among ) ( NP ( NNS others ) ) ) ) ) ) )

Already this year it has received orders for four 150-megawatt advanced combustion turbines from Florida Power & Light Co. and for two 300-megawatt plants from Intercontinental Energy Corp. among others


( S ( NP-SBJ ( NP ( NP ( NNP Westinghouse ) ( POS 's ) ) ( JJ own ) ( NN role ) ) ( PP ( IN as ) ( NP ( DT a ) ( NN supplier ) ) ) ) ( ADVP ( RB also ) ) ( VP ( VBZ is ) ( VP ( VBG changing ) ) ) )

Westinghouse 's own role as a supplier also is changing


( S ( PP-TMP ( IN In ) ( NP ( DT the ) ( NN past ) ) ) ( NP-SBJ ( DT the ) ( NN company ) ) ( ADVP-TMP ( RB usually ) ) ( VP ( VBD took ) ( NP ( NP ( JJ token ) ( NN equity ) ( NNS positions ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NN power ) ( NNS plants ) ) ( SBAR ( S ( NP-SBJ-2 ( PRP it ) ) ( VP ( VBD supplied ) ( PP-CLR ( IN as ) ( NP ( DT a ) ( NN kicker ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB close ) ( NP ( NNS deals ) ) ) ) ) ) ) ) ) ) ) ) )

In the past the company usually took token equity positions in power plants it supplied as a kicker to close deals


( S ( CC But ) ( NP-SBJ ( NP ( JJ last ) ( NNP June ) ( POS 's ) ) ( NN annnouncement ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NNP Westinghouse ) ) ( VP ( MD would ) ( VP ( VB put ) ( PRT ( RP up ) ) ( NP ( NP ( DT all ) ) ( PP ( IN of ) ( NP ( DT the ) ( QP ( CD 70 ) ( CD million ) ) ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB build ) ( NP ( DT a ) ( JJ new ) ( JJ 55-megawatt ) ( NN plant ) ) ) ) ) ) ) ) ) ) ) ) ( VP ( MD could ) ( VP ( VB herald ) ( NP ( DT a ) ( JJ new ) ( NN age ) ) ) ) )

But last June 's annnouncement that Westinghouse would put up all of the 70 million to build a new 55-megawatt plant could herald a new age


( S ( NP-SBJ ( NP ( NNP Westinghouse ) ( POS 's ) ) ( NN plant ) ) ( VP ( MD will ) ( VP ( VP ( VB provide ) ( NP-1 ( JJ electrical ) ( NN power ) ) ( PP-CLR-2 ( TO to ) ( NP ( DT the ) ( NNP Southern ) ( NNP California ) ( NNP Edison ) ( NNP Co. ) ) ) ) ( CC and ) ( VP ( NP=1 ( NP ( JJ backup ) ( NN power ) ) ( CC and ) ( NP ( NN steam ) ) ) ( PP-CLR=2 ( TO to ) ( NP ( DT the ) ( NNP U.S. ) ( NNP Borax ) ( CC & ) ( NNP Chemical ) ( NNP Co ) ) ) ) ) ) )

Westinghouse 's plant will provide electrical power to the Southern California Edison Co. and backup power and steam to the U.S. Borax & Chemical Co


( SINV ( S-TPC-1 ( S ( NP-SBJ ( PRP We ) ) ( VP ( VBP have ) ( RB n't ) ( VP ( VBN decided ) ( PP-CLR ( IN on ) ( NP ( DT a ) ( NN strategy ) ) ) ( ADVP-TMP ( RB yet ) ) ) ) ) ( CC but ) ( S ( NP-SBJ ( PRP we ) ) ( VP ( MD could ) ( VP ( VB become ) ( NP-PRD ( DT an ) ( JJ independent ) ( NN producer ) ) ( PP ( VBG depending ) ( PP ( IN on ) ( SBAR ( IN whether ) ( S ( NP-SBJ ( PRP we ) ) ( VP ( VBP 're ) ( NP-PRD ( NP ( DT the ) ( NN developer ) ) ( CC or ) ( NP ( RB just ) ( DT the ) ( NN supplier ) ) ) ) ) ) ) ) ) ) ) ) ( VP ( VBZ says ) ) ( NP-SBJ ( NP ( NNP Theodore ) ( NNP Stern ) ) ( NP ( NP ( JJ executive ) ( NN vice ) ( NN president ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( NN company ) ( POS 's ) ) ( NN energy ) ( CC and ) ( NN utility ) ( NNS systems ) ( NN group ) ) ) ) ) )

We have n't decided on a strategy yet but we could become an independent producer depending on whether we 're the developer or just the supplier says Theodore Stern executive vice president of the company 's energy and utility systems group


( S ( PP-TMP ( IN At ) ( NP ( DT the ) ( JJ same ) ( NN time ) ) ) ( NP-SBJ ( NNP Westinghouse ) ) ( VP ( VBZ hopes ) ( SBAR ( S ( NP-SBJ-1 ( NP ( PRP$ its ) ( NN venture ) ) ( PP ( IN with ) ( NP ( NNP Mitsubishi ) ) ) ) ( VP ( MD will ) ( VP ( VB help ) ( S ( VP ( VB fend ) ( PRT ( RP off ) ) ( NP ( NP ( VBG growing ) ( NN competition ) ) ( PRN ( PP-LOC ( ADVP ( RB particularly ) ) ( IN in ) ( NP ( DT the ) ( NNP U.S. ) ) ) ) ( PP ( IN from ) ( NP ( NP ( JJ such ) ( JJ European ) ( NNS competitors ) ) ( PP ( IN as ) ( NP ( NP ( NNP Asea ) ( NNP Brown ) ( NNP Boveri ) ( NNP AG ) ) ( NP ( NNP Siemens ) ( NNP AG ) ) ( CC and ) ( NP ( NNP British ) ( NNP General ) ( NNP Electric ) ( NNP Co ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

At the same time Westinghouse hopes its venture with Mitsubishi will help fend off growing competition particularly in the U.S. from such European competitors as Asea Brown Boveri AG Siemens AG and British General Electric Co


( S ( PP-LOC ( IN Under ) ( NP ( DT the ) ( NN agreement ) ) ) ( NP-SBJ-1 ( NNP Westinghouse ) ) ( VP ( MD will ) ( VP ( VB be ) ( ADJP-PRD ( JJ able ) ( S ( VP ( TO to ) ( VP ( VP ( VB purchase ) ( NP ( JJR smaller ) ( NN combustion ) ( NNS turbines ) ) ( PP-CLR ( IN from ) ( NP ( PRP$ its ) ( JJ Japanese ) ( NN partner ) ) ) ) ( CC and ) ( VP ( VB package ) ( CC and ) ( VB sell ) ( NP ( PRP them ) ) ( PP-CLR ( IN with ) ( NP ( PRP$ its ) ( JJ own ) ( NX ( NX ( NNS generators ) ) ( CC and ) ( NX ( JJ other ) ( NN equipment ) ) ) ) ) ) ) ) ) ) ) ) )

Under the agreement Westinghouse will be able to purchase smaller combustion turbines from its Japanese partner and package and sell them with its own generators and other equipment


( S ( NP-SBJ ( NNP Westinghouse ) ) ( ADVP ( RB also ) ) ( VP ( ADVP-MNR ( RB jointly ) ) ( MD will ) ( VP ( VB bid ) ( PP-CLR ( IN on ) ( NP ( NNS projects ) ) ) ( PP ( IN with ) ( NP ( NNP Misubishi ) ) ) ( S-ADV ( VP ( VBG giving ) ( NP ( PRP it ) ) ( NP ( DT an ) ( NN edge ) ( PP-LOC ( IN in ) ( NP ( VBG developing ) ( JJ Asian ) ( NNS markets ) ) ) ) ) ) ) ) )

Westinghouse also jointly will bid on projects with Misubishi giving it an edge in developing Asian markets


( S ( PP ( IN In ) ( NP ( NN addition ) ) ) ( NP-SBJ-1 ( DT the ) ( CD two ) ( NNS companies ) ) ( VP ( MD will ) ( VP ( VP ( VB develop ) ( NP ( NP ( JJ new ) ( NN steam ) ( NN turbine ) ( NN technology ) ) ( PP ( JJ such ) ( IN as ) ( NP ( NP ( DT the ) ( NNS plants ) ) ( VP ( VBN ordered ) ( PP ( IN by ) ( NP-LGS ( NNP Florida ) ( NNP Power ) ) ) ) ) ) ) ) ( CC and ) ( ADVP ( RB even ) ) ( VP ( VB utilize ) ( NP ( NP ( DT each ) ( JJ other ) ( POS 's ) ) ( NNS plants ) ) ( PP-TMP ( IN at ) ( NP ( NNS times ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB take ) ( NP-CLR ( NN advantage ) ) ( PP-CLR ( IN of ) ( NP ( NN currency ) ( NNS fluctuations ) ) ) ) ) ) ) ) ) )

In addition the two companies will develop new steam turbine technology such as the plants ordered by Florida Power and even utilize each other 's plants at times to take advantage of currency fluctuations


( S ( S-TPC-1 ( SBAR ( RB Even ) ( IN though ) ( S ( NP-SBJ ( PRP we ) ) ( VP ( MD 'll ) ( ADVP-TMP ( RB still ) ) ( VP ( VB compete ) ( PP-CLR ( IN against ) ( NP ( NNP Mitsubishi ) ) ) ) ) ) ) ( S ( NP-SBJ ( PRP we ) ) ( VP ( MD can ) ( ADVP ( RB also ) ) ( VP ( VB work ) ( ADVP-MNR ( RB jointly ) ) ( PP-LOC ( IN on ) ( NP ( DT some ) ( NNS projects ) ) ) ) ) ) ( CC and ) ( S ( NP-SBJ ( PRP we ) ) ( VP ( MD 'll ) ( VP ( VB gain ) ( NP ( NP ( DT a ) ( NN lot ) ) ( PP ( IN of ) ( NP ( VBG sourcing ) ( NN flexibility ) ) ) ) ) ) ) ) ( NP-SBJ ( NNP Mr. ) ( NNP Stern ) ) ( VP ( VBZ contends ) ) )

Even though we 'll still compete against Mitsubishi we can also work jointly on some projects and we 'll gain a lot of sourcing flexibility Mr. Stern contends


( S ( NP-SBJ-1 ( DT The ) ( NNP Westinghouse-Mitsubishi ) ( NN venture ) ) ( VP ( VBD was ) ( VP ( VBN designed ) ( PP-CLR ( IN as ) ( NP ( DT a ) ( JJ non-equity ) ( NN transaction ) ) ) ( PP ( VBG circumventing ) ( NP ( DT any ) ( JJ possible ) ( JJ antitrust ) ( NNS concerns ) ) ) ) ) )

The Westinghouse-Mitsubishi venture was designed as a non-equity transaction circumventing any possible antitrust concerns


( S ( NP-SBJ ( NNP Westinghouse ) ) ( VP ( ADVP-MNR ( RB carefully ) ) ( VBD crafted ) ( NP ( DT the ) ( NN agreement ) ) ( SBAR-PRP ( IN because ) ( S ( NP-SBJ ( DT the ) ( NNP Justice ) ( NNP Department ) ) ( NP-TMP ( RBR earlier ) ( DT this ) ( NN year ) ) ( VP ( ADVP-MNR ( RB successfully ) ) ( VBD challenged ) ( NP ( NP ( DT a ) ( VBN proposed ) ( NN steam ) ( NN turbine ) ( NN joint ) ( NN venture ) ) ( PP ( IN with ) ( NP ( NNP Asea ) ( NNP Brown ) ( NNP Boveri ) ) ) ) ) ) ) ) )

Westinghouse carefully crafted the agreement because the Justice Department earlier this year successfully challenged a proposed steam turbine joint venture with Asea Brown Boveri


( S ( NP-SBJ ( PRP It ) ) ( VP ( VBZ is ) ( VP ( VBN expected ) ( SBAR ( IN that ) ( S ( NP-SBJ-2 ( NP ( DT the ) ( JJ current ) ( NN surge ) ) ( PP-LOC ( IN in ) ( NP ( NP ( NN demand ) ) ( PP ( IN for ) ( NP ( JJ new ) ( NN power ) ) ) ) ) ) ( VP ( MD will ) ( VP ( VB be ) ( VP ( VBN filled ) ( PP ( ADVP ( RB primarily ) ) ( IN by ) ( NP-LGS ( NP ( JJ independent ) ( NNS producers ) ) ( SBAR ( WHNP-3 ( WDT which ) ) ( S ( PP ( IN unlike ) ( NP ( NNS utilities ) ) ) ( VP ( VP ( VBP are ) ( RB n't ) ( VP ( VBN regulated ) ) ) ( CC and ) ( VP ( ADVP ( RB therefore ) ) ( VBP do ) ( RB n't ) ( VP ( VB need ) ( NP ( NN government ) ( NN approval ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB construct ) ( NP ( JJ new ) ( NNS plants ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

It is expected that the current surge in demand for new power will be filled primarily by independent producers which unlike utilities are n't regulated and therefore do n't need government approval to construct new plants


( S ( NP-SBJ ( NNP Westinghouse ) ) ( VP ( VBZ expects ) ( S ( NP-SBJ ( NP ( QP ( IN about ) ( NN half ) ) ) ( PP ( IN of ) ( NP ( NP ( PRP$ its ) ( JJ new ) ( NNS orders ) ) ( PP ( IN for ) ( NP ( NNS turbines ) ) ) ) ) ) ( VP ( TO to ) ( VP ( VB come ) ( PP-DIR ( IN from ) ( NP ( JJ independent ) ( NNS producers ) ) ) ( PP-TMP ( IN for ) ( NP ( QP ( IN at ) ( JJS least ) ( DT the ) ( JJ next ) ( CD six ) ) ( NNS years ) ) ) ) ) ) ) )

Westinghouse expects about half of its new orders for turbines to come from independent producers for at least the next six years


( S ( PP ( IN Despite ) ( NP ( NP ( NNS shutdowns ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( NN company ) ( POS 's ) ) ( NNP Lester ) ( CC and ) ( NNP East ) ( NNP Pittsburgh ) ( NNS plants ) ) ) ) ) ( NP-SBJ ( DT the ) ( NN company ) ) ( VP ( VBZ believes ) ( SBAR ( S ( NP-SBJ ( PRP it ) ) ( VP ( VBZ has ) ( NP ( NP ( JJ sufficient ) ( NN capacity ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB meet ) ( NP ( JJ near-term ) ( NN demand ) ) ( PP ( IN with ) ( NP ( NP ( PRP$ its ) ( ADJP ( ADJP ( JJ much ) ( JJR smaller ) ) ( CC and ) ( ADJP ( RBR more ) ( JJ efficient ) ) ) ( VBG manufacturing ) ( NNS facilities ) ) ( PP-LOC ( IN in ) ( NP ( NNP North ) ( NNP Carolina ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Despite shutdowns of the company 's Lester and East Pittsburgh plants the company believes it has sufficient capacity to meet near-term demand with its much smaller and more efficient manufacturing facilities in North Carolina


( S ( ADVP ( RB Still ) ) ( NP-SBJ ( NNP Westinghouse ) ) ( VP ( VBZ acknowledges ) ( SBAR ( IN that ) ( S ( NP-SBJ ( NP ( NN demand ) ) ( PP ( IN from ) ( NP ( JJ independent ) ( NNS producers ) ) ) ) ( VP ( MD could ) ( VP ( VB evaporate ) ( SBAR-ADV ( SBAR ( IN if ) ( S ( NP-SBJ ( NP ( NNS prices ) ) ( PP ( IN for ) ( NP ( NP ( NN fuel ) ) ( PP ( JJ such ) ( IN as ) ( NP ( NP ( JJ natural ) ( NN gas ) ) ( CC or ) ( NP ( NN oil ) ) ) ) ) ) ) ( VP ( VBP rise ) ( ADVP-MNR ( RB sharply ) ) ) ) ) ( CC or ) ( SBAR ( IN if ) ( S ( NP-SBJ-3 ( NP ( NNS utilities ) ) ( SBAR ( WHNP-2 ( WDT which ) ) ( S ( VP ( VBP have ) ( VP ( VBN been ) ( VP ( VBN pressured ) ( PP ( IN by ) ( NP-LGS ( NNS regulators ) ) ) ( S ( VP ( TO to ) ( VP ( VB keep ) ( S ( ADJP-PRD ( IN down ) ) ( NP-SBJ ( NNS rates ) ) ) ) ) ) ) ) ) ) ) ) ( VP ( VBP are ) ( ADVP-TMP ( RB suddenly ) ) ( VP ( VBN freed ) ( S ( VP ( TO to ) ( VP ( VB add ) ( NP ( JJ significant ) ( VBG generating ) ( NN capacity ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Still Westinghouse acknowledges that demand from independent producers could evaporate if prices for fuel such as natural gas or oil rise sharply or if utilities which have been pressured by regulators to keep down rates are suddenly freed to add significant generating capacity


( S ( SBAR-ADV ( RB Even ) ( IN if ) ( S ( NP-SBJ ( DT that ) ( NN scenario ) ) ( VP ( VBZ occurs ) ) ) ) ( NP-SBJ ( NNP Westinghouse ) ) ( VP ( VBZ figures ) ( SBAR ( S ( NP-SBJ-1 ( PRP it ) ) ( VP ( VBZ is ) ( VP ( VBN prepared ) ) ) ) ) ) )

Even if that scenario occurs Westinghouse figures it is prepared


( S ( NP-SBJ ( DT The ) ( NN company ) ) ( ADVP-TMP ( RB already ) ) ( VP ( VBZ is ) ( VP ( VBG gearing ) ( PRT ( RP up ) ) ( PP-CLR ( IN for ) ( NP ( NP ( DT a ) ( NN renaissance ) ) ( PP ( IN of ) ( NP ( JJ nuclear ) ( NN power ) ) ) ) ) ( SBAR-ADV ( RB even ) ( IN though ) ( S ( NP-SBJ ( PRP it ) ) ( VP ( VBZ has ) ( RB n't ) ( VP ( VBN received ) ( NP ( NP ( DT an ) ( NN order ) ) ( PP ( IN for ) ( NP ( DT a ) ( JJ domestic ) ( JJ nuclear ) ( NN plant ) ) ) ) ( PP-TMP ( IN in ) ( NP ( DT a ) ( NN decade ) ) ) ) ) ) ) ) ) )

The company already is gearing up for a renaissance of nuclear power even though it has n't received an order for a domestic nuclear plant in a decade


( S ( NP-SBJ ( NP ( NNP John ) ( NNP C. ) ( NNP Marous ) ) ( NP ( NP ( NN chairman ) ) ( CC and ) ( NP ( NN chief ) ( NN executive ) ( NN officer ) ) ) ) ( VP ( VBZ says ) ( SBAR ( S ( NP-SBJ ( PRP he ) ) ( VP ( VBZ expects ) ( NP ( NP ( DT a ) ( JJ commercial ) ( NN order ) ) ) ( PP-TMP ( IN by ) ( NP ( CD 1995 ) ) ) ( PP-2 ( IN for ) ( NP ( NP ( NP ( DT the ) ( NN company ) ( POS 's ) ) ( NN AP600 ) ( JJ nuclear ) ( NN power ) ( NN plant ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBZ is ) ( PP-LOC-PRD ( IN under ) ( NP ( NN development ) ) ) ) ) ) ) ) ) ) ) ) )

John C. Marous chairman and chief executive officer says he expects a commercial order by 1995 for the company 's AP600 nuclear power plant which is under development


( S ( SBAR-TMP ( RB Once ) ( S ( NP-SBJ ( PRP we ) ) ( VP ( VBP see ) ( NP ( DT an ) ( NN order ) ) ) ) ) ( NP-SBJ ( PRP we ) ) ( VP ( VBP expect ) ( SBAR ( S ( NP-SBJ ( PRP it ) ) ( VP ( MD 'll ) ( VP ( VB be ) ( PP-LOC-PRD ( IN on ) ( NP ( NN line ) ) ) ( PP-TMP ( IN by ) ( NP ( CD 2000 ) ) ) ) ) ) ) ) )

Once we see an order we expect it 'll be on line by 2000


( S ( SBAR-TMP ( WHADVP-1 ( WRB When ) ) ( S ( NP-SBJ ( NNP Michael ) ( NNP S. ) ( NNP Perry ) ) ( VP ( VBD took ) ( NP ( DT the ) ( NN podium ) ) ( PP-LOC ( IN at ) ( NP ( DT a ) ( JJ recent ) ( NNS cosmetics ) ( NN industry ) ( NN event ) ) ) ) ) ) ( NP-SBJ ( NP ( QP ( JJR more ) ( IN than ) ( CD 500 ) ) ( NNS executives ) ) ( VP ( VBG packing ) ( NP ( DT the ) ( NN room ) ) ) ) ( VP ( VBD snapped ) ( PP-CLR ( TO to ) ( NP ( NN attention ) ) ) ) )

When Michael S. Perry took the podium at a recent cosmetics industry event more than 500 executives packing the room snapped to attention


( S ( NP-SBJ-2 ( NP ( NNP Mr. ) ( NNP Perry ) ) ( SBAR ( WHNP-1 ( WP who ) ) ( S ( VP ( VBZ runs ) ( NP ( NP ( NNP Unilever ) ( NNP Group ) ( POS 's ) ) ( JJ world-wide ) ( JJ personal-care ) ( NN business ) ) ) ) ) ) ( VP ( VBD paused ) ( S-PRP ( VP ( TO to ) ( VP ( VB scan ) ( NP ( DT the ) ( NN crowd ) ) ) ) ) ) )

Mr. Perry who runs Unilever Group 's world-wide personal-care business paused to scan the crowd


( S ( S-TPC-1 ( NP-SBJ ( PRP I ) ) ( VP ( VBP see ) ( SBAR ( S ( NP-SBJ ( PRP we ) ) ( VP ( VBP have ) ( S ( NP-SBJ ( QP ( IN about ) ( PDT half ) ) ( DT the ) ( NN audience ) ) ( VP ( VBG working ) ( PP-CLR ( IN for ) ( NP ( PRP us ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( PRP he ) ) ( VP ( VBD said ) ( NP-MNR ( NP ( NN tongue ) ) ( PP-LOC ( IN in ) ( NP ( NN cheek ) ) ) ) ) )

I see we have about half the audience working for us he said tongue in cheek


( S ( NP-TPC-1 ( DT The ) ( JJ other ) ( NN half ) ) ( NP-SBJ ( PRP we ) ) ( VP ( MD may ) ( VP ( VB have ) ( PP-TMP ( IN before ) ( NP ( JJ long ) ) ) ) ) )

The other half we may have before long


( S ( S ( NP-SBJ ( NP ( NNS Members ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN audience ) ) ) ) ( VP ( VP ( VBD gasped ) ) ( CC or ) ( VP ( VBD laughed ) ( ADVP-MNR ( RB nervously ) ) ) ) ) ( S ( NP-SBJ-1 ( PRP$ their ) ( NN industry ) ) ( VP ( VBZ has ) ( VP ( VBN been ) ( VP ( VBN unsettled ) ( ADVP-TMP ( RB recently ) ) ( PP ( IN by ) ( NP-LGS ( NNS acquisitions ) ) ) ) ) ) ) )

Members of the audience gasped or laughed nervously their industry has been unsettled recently by acquisitions


( S ( ADVP-TMP ( JJ First ) ) ( NP-SBJ-1 ( NP ( NNP Unilever ) ) ( NP ( DT the ) ( NNP Anglo-Dutch ) ( NNS packaged-goods ) ( JJ giant ) ) ) ( VP ( VBD spent ) ( NP ( QP ( CD 2 ) ( CD billion ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB acquire ) ( NP ( NP ( NNS brands ) ) ( PP ( JJ such ) ( IN as ) ( NP ( NP ( NNP Faberge ) ) ( CC and ) ( NP ( NNP Elizabeth ) ( NNP Arden ) ) ) ) ) ) ) ) ) )

First Unilever the Anglo-Dutch packaged-goods giant spent 2 billion to acquire brands such as Faberge and Elizabeth Arden


( S ( NP-SBJ ( PRP It ) ) ( ADVP-TMP ( RB now ) ) ( VP ( VBZ holds ) ( NP ( NP ( DT the ) ( NN No. ) ( CD 3 ) ( NN position ) ) ( PP-LOC ( IN at ) ( NP ( NNP U.S. ) ( NN department-store ) ( NN cosmetic ) ( NNS counters ) ) ) ) ) )

It now holds the No. 3 position at U.S. department-store cosmetic counters


( S ( RB Then ) ( NP-SBJ-1 ( NNP Procter ) ( CC & ) ( NNP Gamble ) ( NNP Co. ) ) ( VP ( VBD agreed ) ( S ( VP ( TO to ) ( VP ( VB buy ) ( NP ( NNP Noxell ) ( NNP Corp. ) ) ( PP-CLR ( IN for ) ( NP ( QP ( CD 1.3 ) ( CD billion ) ) ) ) ) ) ) ) )

Then Procter & Gamble Co. agreed to buy Noxell Corp. for 1.3 billion


( S ( NP-SBJ-3 ( NP ( DT That ) ( NN acquisition ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB be ) ( VP ( VBN completed ) ( PP-TMP ( IN by ) ( NP ( NN year ) ( NN end ) ) ) ) ) ) ) ) ) ( VP ( MD will ) ( VP ( VB include ) ( NP ( DT the ) ( NNP Cover ) ( NNP Girl ) ( CC and ) ( NNP Clarion ) ( NN makeup ) ( NNS lines ) ) ( S-ADV ( VP ( VBG making ) ( S ( NP-SBJ ( NNP P&G ) ) ( NP-PRD ( NP ( DT the ) ( JJ top ) ( NN marketer ) ) ( PP ( IN of ) ( NP ( NNS cosmetics ) ) ) ( PP-LOC ( IN in ) ( NP ( JJ mass-market ) ( NNS outlets ) ) ) ) ) ) ) ) ) )

That acquisition to be completed by year end will include the Cover Girl and Clarion makeup lines making P&G the top marketer of cosmetics in mass-market outlets


( S ( S-CLF ( NP-SBJ ( PRP It ) ) ( VP ( VBZ 's ) ( RB not ) ( ADVP-CLR ( RB so ) ( JJ much ) ) ( NP-PRD ( NP ( DT the ) ( NN idea ) ) ( PP ( IN of ) ( NP ( NNS acquisitions ) ) ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBZ has ) ( VP ( VBN agitated ) ( NP ( DT the ) ( NNS cosmetics ) ( NN industry ) ) ) ) ) ) ( PP-2 ( IN as ) ( NP ( NP ( DT the ) ( NNS companies ) ) ( VP ( VBG doing ) ( NP ( DT the ) ( VBG acquiring ) ) ) ) ) ) ) ( S ( NP-SBJ-3 ( NNP P&G ) ( CC and ) ( NNP Unilever ) ) ( VP ( VBP bring ) ( PP-CLR ( IN with ) ( NP ( PRP them ) ) ) ( NP ( NP ( JJ great ) ( NN experience ) ) ( PP ( IN with ) ( NP ( NP ( JJ mundane ) ( NNS products ) ) ( PP ( IN like ) ( NP ( NP ( NN soap ) ) ( CC and ) ( NP ( NN toilet ) ( NN paper ) ) ) ) ) ) ) ( S-ADV ( VP ( VBG sparking ) ( NP ( NN disdain ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NN glitzy ) ( NNS cosmetics ) ( NN trade ) ) ) ) ) ) ) ( CC but ) ( S ( NP-SBJ ( PRP they ) ) ( ADVP ( RB also ) ) ( VP ( VBP bring ) ( NP ( JJ mammoth ) ( NN marketing ) ( NN clout ) ) ( S-ADV ( VP ( VBG sparking ) ( NP ( NN fear ) ) ) ) ) ) )

It 's not so much the idea of acquisitions that has agitated the cosmetics industry as the companies doing the acquiring P&G and Unilever bring with them great experience with mundane products like soap and toilet paper sparking disdain in the glitzy cosmetics trade but they also bring mammoth marketing clout sparking fear


( S ( SBAR-ADV ( IN Though ) ( S ( NP-SBJ ( NP ( PRP it ) ) ) ( VP ( VBZ is ) ( ADVP-PRD ( RB far ) ( PP ( IN from ) ( ADJP ( JJ certain ) ) ) ) ( SBAR-1 ( IN that ) ( S ( NP-SBJ ( NP ( NNS companies ) ) ( VP ( ADVP-MNR ( RB best ) ) ( VBN known ) ( PP-CLR ( IN for ) ( S-NOM ( VP ( VBG selling ) ( NP ( NP ( NNP Promise ) ( NN margarine ) ) ( CC and ) ( NP ( NNP Tide ) ( NN detergent ) ) ) ) ) ) ) ) ( VP ( MD will ) ( VP ( VB succeed ) ( PP-LOC ( IN in ) ( NP ( NNS cosmetics ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( EX there ) ) ( VP ( VBZ 's ) ( NP-PRD ( JJ little ) ( NN doubt ) ( SBAR ( S ( NP-SBJ ( PRP they ) ) ( VP ( MD will ) ( VP ( VB shake ) ( PRT ( RP up ) ) ( NP ( DT the ) ( NN industry ) ) ) ) ) ) ) ) )

Though it is far from certain that companies best known for selling Promise margarine and Tide detergent will succeed in cosmetics there 's little doubt they will shake up the industry


( S ( ADVP-TMP ( IN For ) ( RB now ) ) ( NP-SBJ ( DT both ) ( NNS companies ) ) ( VP ( VBP are ) ( VP ( VBG keeping ) ( ADJP-PRD ( JJ quiet ) ( PP ( IN about ) ( NP ( PRP$ their ) ( JJ specific ) ( NNS plans ) ) ) ) ) ) )

For now both companies are keeping quiet about their specific plans


( S ( CC But ) ( NP-SBJ ( NN industry ) ( NNS watchers ) ) ( VP ( VBP expect ) ( S ( NP-SBJ ( PRP them ) ) ( VP ( TO to ) ( VP ( VB blend ) ( NP ( NP ( DT the ) ( JJ methodical ) ( VBG marketing ) ( NNS strategies ) ) ( SBAR ( S ( NP-SBJ ( PRP they ) ) ( VP ( VBP use ) ( PP-CLR ( IN for ) ( NP ( ADJP ( RBR more ) ( JJ mundane ) ) ( NNS products ) ) ) ) ) ) ) ( PP-CLR ( IN with ) ( NP ( NP ( DT the ) ( ADJP ( RBR more ) ( JJ intuitive ) ) ( NN approach ) ) ( ADJP ( JJ typical ) ( PP ( IN of ) ( NP ( NNS cosmetics ) ( NNS companies ) ) ) ) ) ) ) ) ) ) )

But industry watchers expect them to blend the methodical marketing strategies they use for more mundane products with the more intuitive approach typical of cosmetics companies


( S ( NP-SBJ ( JJ Likely ) ( NNS changes ) ) ( VP ( VBP include ) ( NP ( NP ( NP ( JJR more ) ( NN emphasis ) ) ( PP ( IN on ) ( NP ( NN research ) ) ) ) ( NP ( VBG soaring ) ( VBG advertising ) ( NNS budgets ) ) ( CC and ) ( NP ( JJ aggressive ) ( NN pricing ) ) ) ) )

Likely changes include more emphasis on research soaring advertising budgets and aggressive pricing


( S ( CC But ) ( NP-SBJ ( DT some ) ( NN cosmetics-industry ) ( NNS executives ) ) ( VP ( VBP wonder ) ( SBAR ( IN whether ) ( S ( NP-SBJ ( NP ( NNS techniques ) ) ( VP ( VBN honed ) ( PP-LOC ( IN in ) ( NP ( VBN packaged ) ( NNS goods ) ) ) ) ) ( VP ( MD will ) ( VP ( VB translate ) ( PP-CLR ( TO to ) ( NP ( DT the ) ( NNS cosmetics ) ( NN business ) ) ) ) ) ) ) ) )

But some cosmetics-industry executives wonder whether techniques honed in packaged goods will translate to the cosmetics business


( S ( NP-SBJ ( NP ( NNP Estee ) ( NNP Lauder ) ( NNP Inc. ) ) ( NP ( NNP Revlon ) ( NNP Inc. ) ) ( CC and ) ( NP ( JJ other ) ( NNS cosmetics ) ( NNS houses ) ) ) ( ADVP ( RB traditionally ) ) ( VP ( VBP have ) ( VP ( VBN considered ) ( S ( NP-SBJ ( PRP themselves ) ) ( NP-PRD ( NP ( NN fashion ) ( NNS enterprises ) ) ( SBAR ( WHNP-2 ( WP$ whose ) ( NN product ) ( NN development ) ) ( S ( VP ( VBZ is ) ( VP ( VBN guided ) ( PP ( IN by ) ( NP-LGS ( NP ( DT the ) ( JJ creative ) ( NN intuition ) ) ( PP ( IN of ) ( NP ( PRP$ their ) ( NNS executives ) ) ) ) ) ) ) ) ) ) ) ) ) )

Estee Lauder Inc. Revlon Inc. and other cosmetics houses traditionally have considered themselves fashion enterprises whose product development is guided by the creative intuition of their executives


( S ( S ( NP-SBJ ( NNS Cosmetics ) ( NNS companies ) ) ( VP ( VBP roll ) ( PRT ( RP out ) ) ( NP ( JJ new ) ( NN makeup ) ( NNS colors ) ) ( NP-TMP ( NP ( JJ several ) ( NNS times ) ) ( NP-ADV ( DT a ) ( NN year ) ) ) ) ) ( CC and ) ( S ( SBAR-PRP ( IN since ) ( S ( NP-SBJ-1 ( JJS most ) ( NNS products ) ) ( VP ( MD can ) ( VP ( VB be ) ( VP ( ADVP-MNR ( RB easily ) ) ( VBN copied ) ( PP ( IN by ) ( NP-LGS ( NNS competitors ) ) ) ) ) ) ) ) ( NP-SBJ-2 ( PRP they ) ) ( VP ( VBP 're ) ( ADJP-PRD ( JJ loath ) ( S ( VP ( TO to ) ( VP ( VB test ) ( NP ( PRP them ) ) ( PP-CLR ( IN with ) ( NP ( NNS consumers ) ) ) ) ) ) ) ) ) )

Cosmetics companies roll out new makeup colors several times a year and since most products can be easily copied by competitors they 're loath to test them with consumers


( SINV ( S-TPC-1 ( SBAR-PRP ( RB Just ) ( IN because ) ( S ( NP-SBJ ( JJ upscale ) ( NNS cosmetics ) ) ( VP ( VP ( VBP look ) ( PP-CLR ( IN like ) ( NP ( VBN packaged ) ( NNS goods ) ) ) ) ( CC and ) ( VP ( NN smell ) ( PP-CLR ( IN like ) ( NP ( VBN packaged ) ( NNS goods ) ) ) ) ) ) ) ( NP-SBJ ( PRP it ) ) ( VP ( VBZ does ) ( RB n't ) ( VP ( VB mean ) ( SBAR ( S ( NP-SBJ ( PRP they ) ) ( VP ( VBP are ) ( NP-PRD ( VBN packaged ) ( NNS goods ) ) ) ) ) ) ) ) ( VP ( VBZ says ) ) ( NP-SBJ ( NP ( NNP Leonard ) ( NNP Lauder ) ) ( NP ( NP ( NN chief ) ( NN executive ) ) ( PP ( IN of ) ( NP ( NNP Estee ) ( NNP Lauder ) ) ) ) ) )

Just because upscale cosmetics look like packaged goods and smell like packaged goods it does n't mean they are packaged goods says Leonard Lauder chief executive of Estee Lauder


( S ( NP-SBJ ( PRP They ) ) ( VP ( VBP 're ) ( ADVP ( RB really ) ) ( NP-PRD ( NP ( NN fashion ) ( NNS items ) ) ( VP ( VBD wrapped ) ( PRT ( RP up ) ) ( PP-CLR ( IN in ) ( NP ( JJ little ) ( NNS jars ) ) ) ) ) ) )

They 're really fashion items wrapped up in little jars


( S ( PP ( IN In ) ( NP ( NP ( NN contrast ) ) ( PP ( TO to ) ( NP ( NP ( DT the ) ( ADJP ( RBR more ) ( JJ artistic ) ) ( NN nature ) ) ( PP ( IN of ) ( NP ( JJ traditional ) ( NNS cosmetics ) ( NNS houses ) ) ) ) ) ) ) ( NP-SBJ ( NNP Unilever ) ( CC and ) ( NNP P&G ) ) ( VP ( VBP are ) ( NP-PRD ( NP ( DT the ) ( NNS habitats ) ) ( PP ( IN of ) ( NP ( NP ( NN organization ) ( NNS men ) ) ( PP ( IN in ) ( NP ( NN gray-flannel ) ( NNS suits ) ) ) ) ) ) ) )

In contrast to the more artistic nature of traditional cosmetics houses Unilever and P&G are the habitats of organization men in gray-flannel suits


( S ( NP-SBJ ( DT Both ) ( NNS companies ) ) ( VP ( VBP are ) ( NP-PRD ( NP ( JJ conservative ) ( NNS marketers ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBP rely ) ( PP-CLR ( IN on ) ( NP ( JJ extensive ) ( NN market ) ( NN research ) ) ) ) ) ) ) ) )

Both companies are conservative marketers that rely on extensive market research


( S ( NP-SBJ ( NNP P&G ) ) ( PP ( IN in ) ( NP ( JJ particular ) ) ) ( ADVP-TMP ( RB rarely ) ) ( VP ( VBZ rolls ) ( PRT ( RP out ) ) ( NP ( DT a ) ( NN product ) ) ( ADVP-LOC ( RB nationally ) ) ( PP-TMP ( IN before ) ( NP ( JJ extensive ) ( NN test-marketing ) ) ) ) )

P&G in particular rarely rolls out a product nationally before extensive test-marketing


( S ( NP-SBJ ( DT Both ) ) ( VP ( MD can ) ( VP ( VB be ) ( ADJP-PRD ( RB extremely ) ( JJ aggressive ) ( PP ( IN at ) ( S-NOM ( VP ( VBG pricing ) ( NP ( NP ( JJ such ) ( NNS products ) ) ( PP ( IN as ) ( NP ( NNS soaps ) ( CC and ) ( NNS diapers ) ) ) ) ) ) ) ) ( PP ( TO to ) ( NP ( DT the ) ( NN extent ) ( SBAR ( IN that ) ( S ( NP-SBJ ( DT some ) ( NN industry ) ( NNS consultants ) ) ( VP ( VBP predict ) ( SBAR ( S ( NP-SBJ ( NP ( JJ cents-off ) ( NNS coupons ) ) ( PP ( IN for ) ( NP ( NN mascara ) ) ) ) ( VP ( MD could ) ( VP ( VB result ) ( PP-CLR ( IN from ) ( NP ( NP ( PRP$ their ) ( NN entry ) ) ( PP ( IN into ) ( NP ( DT the ) ( NN field ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Both can be extremely aggressive at pricing such products as soaps and diapers to the extent that some industry consultants predict cents-off coupons for mascara could result from their entry into the field


( S ( NP-SBJ ( NNP P&G ) ) ( ADVP-TMP ( RB already ) ) ( VP ( VBZ has ) ( VP ( VBN shown ) ( SBAR ( S ( NP-SBJ ( PRP it ) ) ( VP ( MD can ) ( VP ( VB meld ) ( NP ( DT some ) ( JJ traditional ) ( NNS packaged-goods ) ( NNS techniques ) ) ( PP-CLR ( IN with ) ( NP ( NP ( DT the ) ( NN image-making ) ) ( PP ( IN of ) ( NP ( DT the ) ( NNS cosmetics ) ( NN trade ) ) ) ) ) ( PP-LOC ( IN in ) ( NP ( NP ( DT the ) ( JJ mass-market ) ( NN end ) ) ( PP ( IN of ) ( NP ( DT the ) ( NN business ) ) ) ) ) ) ) ) ) ) ) )

P&G already has shown it can meld some traditional packaged-goods techniques with the image-making of the cosmetics trade in the mass-market end of the business


( S ( VP ( VB Consider ) ( NP ( NP ( NP ( NNP Oil ) ) ( PP ( IN of ) ( NP ( NNP Olay ) ) ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( NP-SBJ ( NNP P&G ) ) ( VP ( VBD acquired ) ( PP-CLR ( IN as ) ( NP ( NP ( NN part ) ) ( PP ( IN of ) ( NP ( NNP Richardson-Vicks ) ( NNP International ) ) ) ) ) ( PP-TMP ( IN in ) ( NP ( CD 1985 ) ) ) ) ) ) ) ) )

Consider Oil of Olay which P&G acquired as part of Richardson-Vicks International in 1985


( S ( NP-SBJ ( NP ( DT The ) ( NN moisturizer ) ) ( VP ( VBN introduced ) ( PP-TMP ( IN in ) ( NP ( CD 1962 ) ) ) ) ) ( VP ( VBD had ) ( NP ( DT a ) ( JJ dowdy ) ( NN image ) ) ) )

The moisturizer introduced in 1962 had a dowdy image


( SINV ( S-TPC-3 ( NP-SBJ ( NP ( NNP Oil ) ) ( PP ( IN of ) ( NP ( NNP Olay ) ) ) ) ( VP ( VBD brought ) ( PP-CLR ( IN with ) ( NP ( PRP it ) ) ) ( NP ( NP ( DT the ) ( NN baggage ) ) ( PP ( IN of ) ( S-NOM ( VP ( VBG being ) ( VP ( VBN used ) ( PP ( ADVP ( RB basically ) ) ( IN by ) ( NP-LGS ( NP ( JJR older ) ( NNS women ) ) ( SBAR ( WHNP-2 ( WP who ) ) ( S ( VP ( VBD had ) ( ADVP-TMP ( RB already ) ) ( VP ( VBN aged ) ) ) ) ) ) ) ) ) ) ) ) ) ) ( VP ( VBZ says ) ) ( NP-SBJ ( NP ( NNP David ) ( NNP Williams ) ) ( NP ( NP ( DT a ) ( NN consultant ) ) ( PP ( IN with ) ( NP ( NNP New ) ( NNP England ) ( NNP Consulting ) ( NNP Group ) ) ) ) ) )

Oil of Olay brought with it the baggage of being used basically by older women who had already aged says David Williams a consultant with New England Consulting Group


( S ( NP-SBJ-1 ( NNP P&G ) ) ( VP ( VBD set ) ( ADVP-CLR ( IN out ) ) ( S-CLR ( VP ( TO to ) ( VP ( VB reposition ) ( NP ( DT the ) ( NN brand ) ) ( PP-MNR ( IN by ) ( S-NOM ( VP ( VBG broadening ) ( NP-2 ( DT the ) ( NN product ) ( NN line ) ) ( S-CLR ( VP ( TO to ) ( VP ( VB include ) ( NP ( NP ( JJ facial ) ( NNS cleansers ) ) ( CC and ) ( NP ( NP ( NNS moisturizers ) ) ( PP ( IN for ) ( NP ( JJ sensitive ) ( NN skin ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

P&G set out to reposition the brand by broadening the product line to include facial cleansers and moisturizers for sensitive skin


( S ( NP-SBJ-2 ( PRP It ) ) ( ADVP ( RB also ) ) ( VP ( VBD redesigned ) ( NP ( NP ( NP ( NNP Oil ) ) ( PP ( IN of ) ( NP ( NNP Olay ) ) ) ( POS 's ) ) ( NN packaging ) ) ( S-ADV ( VP ( VBG stamping ) ( NP ( DT the ) ( JJ traditional ) ( JJ pink ) ( NNS boxes ) ) ( PP-CLR ( IN with ) ( NP ( JJ gold ) ( NNS lines ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB create ) ( NP ( DT a ) ( ADJP ( RBR more ) ( JJ opulent ) ) ( NN look ) ) ) ) ) ) ) ) )

It also redesigned Oil of Olay 's packaging stamping the traditional pink boxes with gold lines to create a more opulent look


( S ( ADVP ( RB Moreover ) ) ( NP-SBJ ( NNP P&G ) ) ( VP ( VBD shifted ) ( NP ( PRP$ its ) ( NN ad ) ( NN campaign ) ) ( PP-CLR ( IN from ) ( NP ( NP ( CD one ) ) ( VP ( VBG targeting ) ( NP ( JJR older ) ( NNS women ) ) ) ) ) ( PP-CLR ( TO to ) ( NP ( NP ( CD one ) ) ( VP ( VBG featuring ) ( NP ( NP ( DT a ) ( NN woman ) ) ( PP ( IN in ) ( NP ( PRP$ her ) ( CD mid-30s ) ) ) ( VP ( VBG vowing ) ( S ( RB not ) ( VP ( TO to ) ( VP ( VB grow ) ( ADJP-PRD ( JJ old ) ) ( ADVP-MNR ( RB gracefully ) ) ) ) ) ) ) ) ) ) ) )

Moreover P&G shifted its ad campaign from one targeting older women to one featuring a woman in her mid-30s vowing not to grow old gracefully


( S ( NP-SBJ ( DT The ) ( NN company ) ) ( VP ( VBZ says ) ( SBAR ( S ( NP-SBJ ( NNS sales ) ) ( VP ( VBP have ) ( VP ( VBN soared ) ) ) ) ) ) )

The company says sales have soared


( S ( NP-SBJ ( NP ( NNS Goliaths ) ) ( PP ( IN like ) ( NP ( NNP Unilever ) ( CC and ) ( NNP P&G ) ) ) ) ( VP ( VBP have ) ( NP ( NP ( JJ enormous ) ( JJ financial ) ( NNS advantages ) ) ( PP ( IN over ) ( NP ( JJR smaller ) ( NNS rivals ) ) ) ) ) )

Goliaths like Unilever and P&G have enormous financial advantages over smaller rivals


( SINV ( S-TPC-2 ( NP-TMP ( JJ Next ) ( NN year ) ) ( NP-SBJ-1 ( NNP Noxell ) ) ( VP ( VBZ plans ) ( S ( VP ( TO to ) ( VP ( VB roll ) ( PRT ( RP out ) ) ( NP ( NP ( DT a ) ( NN perfume ) ) ( VP ( VBN called ) ( S ( NP-PRD ( NNP Navy ) ) ) ) ) ) ) ) ) ) ( VP ( VBZ says ) ) ( NP-SBJ ( NP ( NNP George ) ( NNP L. ) ( NNP Bunting ) ( NNP Jr. ) ) ( NP ( NP ( NN chairman ) ) ( PP ( IN of ) ( NP ( NNP Noxell ) ) ) ) ) )

Next year Noxell plans to roll out a perfume called Navy says George L. Bunting Jr. chairman of Noxell


( S ( PP ( IN Without ) ( NP ( NP ( NNP P&G ) ( POS 's ) ) ( NN backing ) ) ) ( NP-SBJ-1 ( NNP Noxell ) ) ( VP ( MD might ) ( RB not ) ( VP ( VB have ) ( VP ( VBN been ) ( ADJP-PRD ( JJ able ) ( S ( VP ( TO to ) ( VP ( VB spend ) ( NP ( NP ( DT the ) ( VBN estimated ) ( QP ( CD 5 ) ( CD million ) ( TO to ) ( CD 7 ) ( CD million ) ) ) ( VP ( VBN needed ) ( S-PRP-CLR ( VP ( TO to ) ( VP ( VB accomplish ) ( NP ( IN that ) ) ( PP ( IN without ) ( S-NOM ( VP ( VBG scrimping ) ( PP-CLR ( IN on ) ( NP ( PRP$ its ) ( VBG existing ) ( NNS brands ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Without P&G 's backing Noxell might not have been able to spend the estimated 5 million to 7 million needed to accomplish that without scrimping on its existing brands


( S ( S-TPC-1 ( NP-SBJ ( NNS Packaged-goods ) ( NNS companies ) ) ( VP ( MD will ) ( VP ( VB make ) ( S ( NP-SBJ ( NP ( PRP it ) ) ) ( ADJP-PRD ( JJR tougher ) ) ( SBAR-2 ( IN for ) ( S ( NP-SBJ ( JJR smaller ) ( NNS people ) ) ( VP ( TO to ) ( VP ( VB remain ) ( ADJP-PRD ( JJ competitive ) ) ) ) ) ) ) ) ) ) ( NP-SBJ ( NNP Mr. ) ( NNP Bunting ) ) ( VP ( VBZ says ) ) )

Packaged-goods companies will make it tougher for smaller people to remain competitive Mr. Bunting says


( S ( NP-SBJ ( NP ( JJ Further ) ( NNS consolidations ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NN industry ) ) ) ) ( VP ( MD could ) ( VP ( VB follow ) ) ) )

Further consolidations in the industry could follow


( S ( NP-SBJ ( NNS Rumors ) ( SBAR ( IN that ) ( S ( NP-SBJ-1 ( NNP Unilever ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ interested ) ( PP ( IN in ) ( S-NOM ( VP ( VBG acquiring ) ( NP ( NP ( NNP Schering-Plough ) ( NNP Corp. ) ( POS 's ) ) ( NNP Maybelline ) ( NN unit ) ) ) ) ) ) ) ) ) ) ( VP ( VBP are ) ( ADJP-PRD ( JJ widespread ) ) ) )

Rumors that Unilever is interested in acquiring Schering-Plough Corp. 's Maybelline unit are widespread


( S ( S ( NP-SBJ ( NNP Unilever ) ) ( VP ( MD wo ) ( RB n't ) ( VP ( VB comment ) ) ) ) ( S ( NP-SBJ ( NNP Schering ) ) ( ADVP ( RB however ) ) ( VP ( VBZ denies ) ( SBAR ( S ( NP-SBJ ( DT the ) ( NN brand ) ) ( VP ( VBZ is ) ( PP-PRD ( IN for ) ( NP ( NN sale ) ) ) ) ) ) ) ) )

Unilever wo n't comment Schering however denies the brand is for sale


( S ( NP-SBJ-1 ( NP ( DT The ) ( NN presence ) ) ( PP ( IN of ) ( NP ( NNP Unilever ) ( CC and ) ( NNP P&G ) ) ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ likely ) ( S ( VP ( TO to ) ( VP ( VB increase ) ( NP ( NP ( DT the ) ( NN impact ) ) ( PP ( IN of ) ( NP ( NN advertising ) ) ) ( PP ( IN on ) ( NP ( NNS cosmetics ) ) ) ) ) ) ) ) ) )

The presence of Unilever and P&G is likely to increase the impact of advertising on cosmetics


( S ( SBAR-ADV ( IN While ) ( S ( NP-SBJ ( DT the ) ( CD two ) ) ( VP ( VBP are ) ( PP-PRD ( IN among ) ( NP ( NP ( DT the ) ( NN world ) ( POS 's ) ) ( JJS biggest ) ( NNS advertisers ) ) ) ) ) ) ( NP-SBJ ( NP ( JJS most ) ( NNS makers ) ) ( PP ( IN of ) ( NP ( NN upscale ) ( NNS cosmetics ) ) ) ) ( VP ( VBP spend ) ( NP ( RB relatively ) ( JJ little ) ) ( PP-CLR ( IN on ) ( NP ( JJ national ) ( NNS ads ) ) ) ) )

While the two are among the world 's biggest advertisers most makers of upscale cosmetics spend relatively little on national ads


( S ( ADVP ( RB Instead ) ) ( NP-SBJ ( PRP they ) ) ( VP ( VP ( VBP focus ) ( PP-CLR ( IN on ) ( NP ( NP ( NNS events ) ) ( PP-LOC ( IN in ) ( NP ( NN department ) ( NNS stores ) ) ) ) ) ) ( CC and ) ( VP ( VBP pour ) ( NP ( PRP$ their ) ( JJ promotional ) ( NNS budgets ) ) ( PP-CLR ( IN into ) ( NP ( NP ( NNS gifts ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBP go ) ( ADVP-CLR ( RB along ) ( PP ( IN with ) ( NP ( NNS purchases ) ) ) ) ) ) ) ) ) ) ) )

Instead they focus on events in department stores and pour their promotional budgets into gifts that go along with purchases


( S ( S ( NP-SBJ ( NNP Estee ) ( NNP Lauder ) ) ( PP ( IN for ) ( NP ( NN example ) ) ) ( VP ( VBZ spends ) ( NP ( NP ( RB only ) ( DT an ) ( VBN estimated ) ( CD 5 ) ( NN % ) ) ( PP ( IN of ) ( NP ( NNS sales ) ) ) ) ( PP-CLR ( IN on ) ( NP ( NP ( NN advertising ) ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NNP U.S. ) ) ) ) ) ) ) ( CC and ) ( S ( NP-SBJ ( NNP Mr. ) ( NNP Lauder ) ) ( VP ( VBZ says ) ( SBAR ( S ( NP-SBJ ( PRP he ) ) ( VP ( VBZ has ) ( NP ( DT no ) ( NNS plans ) ( S ( VP ( TO to ) ( VP ( VB change ) ( NP ( PRP$ his ) ( NN strategy ) ) ) ) ) ) ) ) ) ) ) )

Estee Lauder for example spends only an estimated 5 % of sales on advertising in the U.S. and Mr. Lauder says he has no plans to change his strategy


( S ( NP-SBJ ( DT The ) ( RBS most ) ( JJ dramatic ) ( NNS changes ) ) ( ADVP ( RB however ) ) ( ADVP ( RB probably ) ) ( VP ( MD will ) ( VP ( VB come ) ( PP-LOC ( IN in ) ( NP ( NN new-product ) ( NN development ) ) ) ) ) )

The most dramatic changes however probably will come in new-product development


( S ( NP-SBJ ( NP ( QP ( RB Nearly ) ( CD 70 ) ) ( NN % ) ) ( PP ( IN of ) ( NP ( NNS cosmetics ) ( NNS sales ) ) ) ) ( VP ( VBP come ) ( PP-CLR ( IN through ) ( NP ( NP ( JJ mass-distribution ) ( NNS outlets ) ) ( PP ( JJ such ) ( IN as ) ( NP ( NP ( NN drug ) ( NNS stores ) ) ( CC and ) ( NP ( NNS supermarkets ) ) ) ) ) ) ( PP ( VBG according ) ( PP ( TO to ) ( NP ( NP ( NNP Andrew ) ( NNP Shore ) ) ( NP ( NP ( DT an ) ( NN analyst ) ) ( PP-LOC ( IN at ) ( NP ( NNP Shearson ) ( NNP Lehman ) ( NNP Hutton ) ( NNP Inc ) ) ) ) ) ) ) ) )

Nearly 70 % of cosmetics sales come through mass-distribution outlets such as drug stores and supermarkets according to Andrew Shore an analyst at Shearson Lehman Hutton Inc


( S ( NP-SBJ ( DT That ) ( NN figure ) ) ( VP ( VBZ has ) ( VP ( VBN been ) ( VP ( VBG inching ) ( ADVP-CLR ( RB up ) ) ( PP-TMP ( IN for ) ( NP ( JJ several ) ( NNS years ) ) ) ) ) ) )

That figure has been inching up for several years


( S ( SBAR-TMP ( IN As ) ( S ( NP-SBJ ( DT the ) ( NN trend ) ) ( VP ( VBZ continues ) ) ) ) ( NP-SBJ-2 ( NP ( NN demand ) ) ( PP ( IN for ) ( NP ( NP ( JJ mass-market ) ( NNS items ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBP are ) ( UCP-PRD ( NP ( JJ high ) ( NN quality ) ) ( CC but ) ( ADJP ( ADVP ( RB only ) ) ( JJ mid-priced ) ) ) ) ) ) ( PRN ( ADVP ( RB particularly ) ) ( NP ( NN skin-care ) ( NNS products ) ) ) ) ) ) ( VP ( VBZ is ) ( VP ( VBN expected ) ( S ( VP ( TO to ) ( VP ( VB increase ) ) ) ) ) ) )

As the trend continues demand for mass-market items that are high quality but only mid-priced particularly skin-care products is expected to increase


( S ( NP-TMP ( DT This ) ( NN fall ) ) ( PP ( IN for ) ( NP ( NN example ) ) ) ( NP-SBJ ( NP ( NNP L'Oreal ) ( NNP Group ) ) ( NP ( RB ordinarily ) ( DT a ) ( JJ high-end ) ( NN line ) ) ) ( VP ( VBD rolled ) ( PRT ( RP out ) ) ( NP ( NP ( DT a ) ( NN drug-store ) ( NN line ) ) ( PP ( IN of ) ( NP ( NN skin-care ) ( NNS products ) ) ) ( VP ( VBN called ) ( S ( NP-PRD ( NNP Plenitude ) ) ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBP retail ) ( PP-CLR ( IN for ) ( NP ( QP ( CD 5 ) ( TO to ) ( CD 15 ) ) ) ) ) ) ) ) ) )

This fall for example L'Oreal Group ordinarily a high-end line rolled out a drug-store line of skin-care products called Plenitude which retail for 5 to 15


( S ( NP-SBJ-1 ( DT The ) ( NNS packaged-goods ) ( NNS marketers ) ) ( VP ( MD may ) ( VP ( VB try ) ( S ( VP ( VBG filling ) ( NP ( DT that ) ( NN gap ) ) ( PP-CLR ( IN with ) ( NP ( NP ( DT a ) ( NN spate ) ) ( PP ( IN of ) ( NP ( JJ new ) ( NNS products ) ) ) ) ) ) ) ) ) )

The packaged-goods marketers may try filling that gap with a spate of new products


( S ( PP ( IN Unlike ) ( NP ( DT the ) ( NN old-line ) ( NNS cosmetics ) ( NNS houses ) ) ) ( NP-SBJ ( NNP Unilever ) ( CC and ) ( NNP P&G ) ) ( DT both ) ( VP ( VBP have ) ( NP ( NP ( JJ enormous ) ( NN research ) ( CC and ) ( NN development ) ( NNS bases ) ) ( SBAR ( S ( VP ( TO to ) ( VP ( VB draw ) ( PP-CLR ( IN on ) ) ( PP-CLR ( IN for ) ( NP ( JJ new ) ( NNS products ) ) ) ) ) ) ) ) ) )

Unlike the old-line cosmetics houses Unilever and P&G both have enormous research and development bases to draw on for new products


( S ( NP-SBJ-1 ( NNP P&G ) ) ( PP ( IN in ) ( NP ( NN fact ) ) ) ( VP ( VBZ is ) ( VP ( VBN noted ) ( PP-CLR ( IN for ) ( S-NOM ( VP ( VBG gaining ) ( NP ( NN market ) ( NN leadership ) ) ( PP-MNR ( IN by ) ( S-NOM ( VP ( VBG introducing ) ( NP ( NP ( NNS products ) ) ( SBAR ( WHNP-2 ( WDT that ) ) ( S ( VP ( VBP offer ) ( NP ( NP ( DT a ) ( JJ technical ) ( NN edge ) ) ( PP ( IN over ) ( NP ( DT the ) ( NN competition ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

P&G in fact is noted for gaining market leadership by introducing products that offer a technical edge over the competition


( S ( NP-SBJ ( NP ( NNS Sales ) ) ( PP ( IN of ) ( NP ( PRP$ its ) ( NNP Tide ) ( NN detergent ) ) ) ) ( VP ( VBD soared ) ( NP-TMP ( RBR earlier ) ( DT this ) ( NN year ) ) ( PP ( IN for ) ( NP ( NN example ) ) ) ( SBAR-TMP ( IN after ) ( S ( NP-SBJ ( NNP P&G ) ) ( VP ( VBD introduced ) ( NP ( NP ( DT a ) ( NN version ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBZ includes ) ( NP ( NP ( DT a ) ( NN bleach ) ) ( ADJP ( JJ safe ) ( PP ( IN for ) ( NP ( DT all ) ( NNS colors ) ( CC and ) ( NNS fabrics ) ) ) ) ) ) ) ) ) ) ) ) ) )

Sales of its Tide detergent soared earlier this year for example after P&G introduced a version that includes a bleach safe for all colors and fabrics


( S ( NP-SBJ ( DT That ) ) ( VP ( VBZ 's ) ( VP ( VBN led ) ( S ( NP-SBJ ( NN industry ) ( NNS executives ) ) ( VP ( TO to ) ( VP ( VB speculate ) ( SBAR ( IN that ) ( S ( NP-SBJ-1 ( JJ future ) ( NN product ) ( NN development ) ) ( VP ( MD will ) ( VP ( VB be ) ( VP ( VBN driven ) ( PP ( PP ( ADVP ( JJR more ) ) ( IN by ) ( NP-LGS ( JJ technological ) ( NN innovation ) ) ) ( PP ( IN than ) ( PP ( IN by ) ( NP-LGS ( NN fashion ) ( NNS whims ) ) ) ) ) ( PP-LOC ( ADVP ( RB especially ) ) ( IN among ) ( NP ( JJ mass-market ) ( NNS brands ) ) ) ) ) ) ) ) ) ) ) ) ) )

That 's led industry executives to speculate that future product development will be driven more by technological innovation than by fashion whims especially among mass-market brands


( SINV ( S-TPC-1 ( NP-SBJ ( EX There ) ) ( VP ( MD will ) ( VP ( VB be ) ( NP-PRD ( NP ( JJR more ) ( NN emphasis ) ) ( PP ( IN on ) ( NP ( NN quality ) ) ) ) ) ) ) ( VP ( VBZ says ) ) ( NP-SBJ ( NP ( NNP Guy ) ( NNP Peyrelongue ) ) ( NP ( NP ( NN chief ) ( NN executive ) ) ( PP ( IN of ) ( NP ( NP ( NNP Cosmair ) ( NNP Inc. ) ) ( NP ( NP ( DT the ) ( NNP U.S. ) ( NN licensee ) ) ( PP ( IN of ) ( NP ( NNP L'Oreal ) ) ) ) ) ) ) ) )

There will be more emphasis on quality says Guy Peyrelongue chief executive of Cosmair Inc. the U.S. licensee of L'Oreal


( S ( NP-SBJ ( PRP You ) ) ( VP ( MD 'll ) ( VP ( VB see ) ( NP ( JJR fewer ) ( NNS gimmicks ) ) ) ) )

You 'll see fewer gimmicks


( S ( CC But ) ( NP-SBJ ( NP ( NN success ) ) ( PP ( IN for ) ( NP ( NNP Unilever ) ( CC and ) ( NNP P&G ) ) ) ) ( VP ( VBZ is ) ( ADVP-PRD ( RB far ) ( PP ( IN from ) ( ADJP ( VBN guaranteed ) ) ) ) ( SBAR-ADV ( IN as ) ( S ( VP ( VBN shown ) ( PP ( IN by ) ( NP-LGS ( NP ( DT the ) ( JJ many ) ( NN consumer-product ) ( NNS companies ) ) ( SBAR ( WHNP-2 ( WDT that ) ) ( S ( VP ( VBP have ) ( VP ( VBN tried ) ( CC and ) ( VBN failed ) ( S-1 ( VP ( TO to ) ( VP ( VB master ) ( NP ( DT the ) ( JJ quirky ) ( NN beauty ) ( NN business ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

But success for Unilever and P&G is far from guaranteed as shown by the many consumer-product companies that have tried and failed to master the quirky beauty business


( S ( PP-TMP ( IN In ) ( NP ( DT the ) ( CD 1970s ) ) ) ( NP-SBJ ( NP ( JJ several ) ( ADJP ( JJ pharmaceutical ) ( CC and ) ( JJ packaged-goods ) ) ( NNS companies ) ) ( PP ( VBG including ) ( NP ( NP ( NNP Colgate-Palmolive ) ( NNP Co. ) ) ( NP ( NNP Eli ) ( NNP Lilly ) ( CC & ) ( NNP Co. ) ) ( NP ( NNP Pfizer ) ( NNP Inc. ) ) ( CC and ) ( NP ( NNP Schering-Plough ) ) ) ) ) ( VP ( VBD acquired ) ( NP ( NNS cosmetics ) ( NNS companies ) ) ) )

In the 1970s several pharmaceutical and packaged-goods companies including Colgate-Palmolive Co. Eli Lilly & Co. Pfizer Inc. and Schering-Plough acquired cosmetics companies


( S ( NP-SBJ ( NN Industry ) ( NNS consultants ) ) ( VP ( VBP say ) ( SBAR ( S ( NP-SBJ ( NP ( RB only ) ( NNP Schering-Plough ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBZ makes ) ( NP ( DT the ) ( JJ mass-market ) ( NNP Maybelline ) ) ) ) ) ) ( VP ( VBZ has ) ( VP ( VBN maintained ) ( NP ( DT a ) ( JJ meaningful ) ( NN business ) ) ) ) ) ) ) )

Industry consultants say only Schering-Plough which makes the mass-market Maybelline has maintained a meaningful business


( S ( NP-SBJ ( NP ( NNP Colgate ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBD acquired ) ( NP ( NNP Helena ) ( NNP Rubenstein ) ) ( PP-TMP ( IN in ) ( NP ( CD 1973 ) ) ) ) ) ) ) ( VP ( VBD sold ) ( NP ( DT the ) ( NN brand ) ) ( ADVP-TMP ( NP ( CD seven ) ( NNS years ) ) ( RB later ) ) ( SBAR-TMP ( IN after ) ( S ( NP-SBJ ( DT the ) ( NN brand ) ) ( VP ( VBD languished ) ) ) ) ) )

Colgate which acquired Helena Rubenstein in 1973 sold the brand seven years later after the brand languished


( S ( NP-SBJ ( NNP Unilever ) ) ( ADVP-TMP ( RB already ) ) ( VP ( VBZ has ) ( VP ( VBN experienced ) ( NP ( DT some ) ( NN disappointment ) ) ) ) )

Unilever already has experienced some disappointment


( S ( NP-SBJ ( NP ( DT The ) ( JJ mass-market ) ( NNP Aziza ) ( NN brand ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( NP-SBJ ( PRP it ) ) ( VP ( VBD acquired ) ( PP-TMP ( IN in ) ( NP ( CD 1987 ) ) ) ( PP ( IN along ) ( PP ( IN with ) ( NP ( NP ( NNP Chesebrough-Pond ) ( POS 's ) ) ( NNP Inc. ) ) ) ) ) ) ) ) ( VP ( VBZ has ) ( VP ( VBN lost ) ( NP ( NN share ) ) ( PP ( VBG according ) ( PP ( TO to ) ( NP ( NN industry ) ( NNS analysts ) ) ) ) ) ) )

The mass-market Aziza brand which it acquired in 1987 along with Chesebrough-Pond 's Inc. has lost share according to industry analysts


( S ( NP-SBJ ( NP ( DT The ) ( JJ ritzy ) ( NN world ) ) ( PP ( IN of ) ( NP ( NN department-store ) ( NNS cosmetics ) ( NN retailing ) ) ) ( SBAR ( WHADVP-1 ( WRB where ) ) ( S ( NP-SBJ ( NNP Unilever ) ) ( VP ( VBZ is ) ( VP ( VBG concentrating ) ( NP ( PRP$ its ) ( NNS efforts ) ) ) ) ) ) ) ( VP ( MD may ) ( VP ( VB prove ) ( ADJP-PRD ( ADVP ( RB even ) ( RBR more ) ) ( JJ treacherous ) ) ) ) )

The ritzy world of department-store cosmetics retailing where Unilever is concentrating its efforts may prove even more treacherous


( S ( PP-LOC ( IN In ) ( NP ( DT this ) ( NN niche ) ) ) ( NP-SBJ ( NN makeup ) ( NNS colors ) ) ( VP ( VBP change ) ( ADVP-TMP ( RB seasonally ) ) ( SBAR-PRP ( IN because ) ( S ( NP-SBJ-1 ( PRP they ) ) ( VP ( VBP are ) ( VP ( VBN linked ) ( PP-CLR ( TO to ) ( NP ( JJ ready-to-wear ) ( NNS fashions ) ) ) ) ) ) ) ) )

In this niche makeup colors change seasonally because they are linked to ready-to-wear fashions


( S ( SBAR-PRP ( IN Because ) ( S ( S ( NP-SBJ ( NN brand ) ( NN loyalty ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ weak ) ) ) ) ( CC and ) ( S ( NP-SBJ ( JJS most ) ( NNS cosmetics ) ( NNS purchases ) ) ( VP ( VBP are ) ( ADJP-PRD ( JJ unplanned ) ) ) ) ) ) ( NP-SBJ ( NP ( JJ careful ) ( NN training ) ) ( PP ( IN of ) ( NP ( NN store ) ( NNS sales ) ( NNS staffs ) ) ) ( PP ( IN by ) ( NP ( NNS cosmetics ) ( NNS companies ) ) ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ important ) ) ) )

Because brand loyalty is weak and most cosmetics purchases are unplanned careful training of store sales staffs by cosmetics companies is important


( S ( CC And ) ( S-NOM-SBJ ( VP ( VBG cultivating ) ( NP ( NP ( DT a ) ( NN luxury ) ( NN image ) ) ( ADJP ( JJ strong ) ( RB enough ) ( S ( VP ( TO to ) ( VP ( VB persuade ) ( NP-1 ( NNS consumers ) ) ( S ( VP ( TO to ) ( VP ( VB pay ) ( NP ( QP ( JJR more ) ( IN than ) ( CD 15 ) ) ) ( PP-CLR ( IN for ) ( NP ( NP ( NN lipstick ) ) ( CC or ) ( NP ( NN eye ) ( NN makeup ) ) ) ) ) ) ) ) ) ) ) ) ) ) ( VP ( VBZ requires ) ( NP ( NP ( DT a ) ( JJ subtle ) ( NN touch ) ) ( SBAR ( WHNP-3 ( IN that ) ) ( S ( NP-SBJ-2 ( JJ packaged-goods ) ( NNS companies ) ) ( VP ( VBP have ) ( ADVP-TMP ( RB yet ) ) ( S ( VP ( TO to ) ( VP ( VB demonstrate ) ( PP ( IN on ) ( NP ( PRP$ their ) ( JJ own ) ) ) ) ) ) ) ) ) ) ) )

And cultivating a luxury image strong enough to persuade consumers to pay more than 15 for lipstick or eye makeup requires a subtle touch that packaged-goods companies have yet to demonstrate on their own


( S ( NP-TMP ( JJ Last ) ( NN week ) ) ( NP-SBJ ( DT the ) ( NNPS British ) ) ( VP ( VBD displayed ) ( NP ( JJ unusual ) ( JJ political ) ( NN immaturity ) ) ) )

Last week the British displayed unusual political immaturity


( S ( NP-SBJ ( NP ( NP ( DT The ) ( NNP Chancellor ) ) ( PP ( IN of ) ( NP ( DT the ) ( NNP Exchequer ) ) ) ) ( NP ( NNP Nigel ) ( NNP Lawson ) ) ) ( VP ( VBD resigned ) ( SBAR-PRP ( IN because ) ( S ( NP-SBJ ( NNP Prime ) ( NNP Minister ) ( NNP Thatcher ) ) ( VP ( MD would ) ( RB not ) ( VP ( VB fire ) ( NP ( PRP her ) ( VBN trusted ) ( NN adviser ) ( NNP Sir ) ( NNP Alan ) ( NNP Walters ) ) ) ) ) ) ) )

The Chancellor of the Exchequer Nigel Lawson resigned because Prime Minister Thatcher would not fire her trusted adviser Sir Alan Walters


( S ( NP-SBJ ( NP ( DT The ) ( NN opposition ) ( NNP Labor ) ( NNP Party ) ( NN leader ) ) ( NP ( NNP Neil ) ( NNP Kinnock ) ) ) ( PP-LOC ( IN in ) ( NP ( NP ( DT a ) ( NN display ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( JJ male ) ( NN chauvinism ) ) ( ADJP ( JJ typical ) ( PP ( IN of ) ( NP ( DT the ) ( JJ British ) ( JJR lower ) ( NN class ) ) ) ) ) ) ) ) ( VP ( VBD denounced ) ( NP-2 ( NNP Mrs. ) ( NNP Thatcher ) ) ( PP-CLR ( IN for ) ( S-NOM ( VP ( VP ( VBG having ) ( NP ( DT an ) ( JJ independent ) ( NN mind ) ) ) ( CC and ) ( VP ( VBG refusing ) ( S ( VP ( TO to ) ( VP ( VB heed ) ( NP ( NP ( DT the ) ( NNS men ) ) ( PP-LOC ( IN in ) ( NP ( PRP$ her ) ( NNP Cabinet ) ) ) ) ) ) ) ) ) ) ) ) )

The opposition Labor Party leader Neil Kinnock in a display of the male chauvinism typical of the British lower class denounced Mrs. Thatcher for having an independent mind and refusing to heed the men in her Cabinet


( S ( NP-SBJ-2 ( DT The ) ( JJ British ) ( NN press ) ) ( S-ADV ( VP ( VBG making ) ( NP ( DT a ) ( NN mountain ) ) ( PP-CLR ( IN out ) ( PP ( IN of ) ( NP ( DT a ) ( NN molehill ) ) ) ) ) ) ( VP ( VBD precipitated ) ( NP ( DT an ) ( JJ unnecessary ) ( JJ economic ) ( NN crisis ) ) ( PP-MNR ( IN by ) ( S-NOM ( VP ( VBG portraying ) ( NP ( NNP Mrs. ) ( NNP Thatcher ) ) ( PP-CLR ( IN as ) ( NP ( NP ( DT an ) ( NN autocrat ) ) ( SBAR ( WHNP-1 ( WP who ) ) ( S ( VP ( VBD had ) ( VP ( VBN thrown ) ( NP ( JJ economic ) ( NN policy ) ) ( PP-CLR ( IN into ) ( NP ( NN confusion ) ) ) ( PP-MNR ( IN by ) ( S-NOM ( VP ( VBG driving ) ( NP ( DT a ) ( VBN respected ) ( NN figure ) ) ( PP-CLR ( IN from ) ( NP ( PRP$ her ) ( NN government ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

The British press making a mountain out of a molehill precipitated an unnecessary economic crisis by portraying Mrs. Thatcher as an autocrat who had thrown economic policy into confusion by driving a respected figure from her government


( SINV ( PP-LOC-TPC-1 ( IN Behind ) ( NP ( DT the ) ( JJ silly ) ( NN posturing ) ) ) ( VP ( VBZ lies ) ) ( NP-SBJ ( DT a ) ( JJ real ) ( NN dispute ) ) )

Behind the silly posturing lies a real dispute


( S ( NP-SBJ ( NP ( NNP Mr. ) ( NNP Lawson ) ) ( CC and ) ( NP ( PRP$ his ) ( JJ European-minded ) ( NNS colleagues ) ) ) ( VP ( VBP want ) ( S ( NP-SBJ ( DT the ) ( JJ British ) ( NN pound ) ) ( VP ( ADVP-MNR ( RB formally ) ) ( VBN tied ) ( PP-CLR ( TO to ) ( NP ( DT the ) ( ADJP ( JJ West ) ( JJ German ) ) ( NN mark ) ) ) ) ) ) )

Mr. Lawson and his European-minded colleagues want the British pound formally tied to the West German mark


( S ( NP-SBJ ( NNP Sir ) ( NNP Alan ) ) ( VP ( VBZ considers ) ( S ( NP-SBJ ( DT this ) ) ( NP-PRD ( DT an ) ( ADJP ( JJ ill-advised ) ( CC and ) ( JJ costly ) ) ( NN policy ) ) ) ) )

Sir Alan considers this an ill-advised and costly policy


( S ( SBAR-PRP ( IN As ) ( S ( NP-SBJ ( EX there ) ) ( VP ( VBZ is ) ( NP-PRD ( DT an ) ( NN effort ) ( S ( VP ( TO to ) ( VP ( VB anchor ) ( NP ( DT the ) ( NN dollar ) ) ( PP-CLR ( CC either ) ( TO to ) ( NP ( NP ( NN gold ) ) ( CC or ) ( NP ( JJ other ) ( NNS currencies ) ) ) ) ) ) ) ) ) ) ) ( NP-SBJ-1 ( DT the ) ( NN dispute ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ worth ) ( S ( VP ( VBG examining ) ) ) ) ) )

As there is an effort to anchor the dollar either to gold or other currencies the dispute is worth examining


( S ( PP-TMP ( IN Until ) ( NP ( PRP$ his ) ( NN resignation ) ) ) ( NP-SBJ-2 ( NNP Mr. ) ( NNP Lawson ) ) ( VP ( VBD had ) ( VP ( VBN been ) ( S-PRD ( VP ( VBG conducting ) ( NP ( JJ British ) ( JJ monetary ) ( NN policy ) ) ( SBAR-MNR ( IN as ) ( IN if ) ( S ( NP-SBJ-1 ( DT the ) ( NN pound ) ) ( VP ( VBD were ) ( VP ( VBN tied ) ( PP-CLR ( TO to ) ( NP ( DT the ) ( NN mark ) ) ) ) ) ) ) ) ) ) ) )

Until his resignation Mr. Lawson had been conducting British monetary policy as if the pound were tied to the mark


( S ( SBAR-TMP ( WHADVP-1 ( WRB When ) ) ( S ( NP-SBJ ( NNP Mrs. ) ( NNP Thatcher ) ) ( VP ( VBD cut ) ( NP ( DT the ) ( JJ top ) ( NN tax ) ( NN rate ) ) ( PP-CLR ( TO to ) ( NP ( CD 40 ) ( NN % ) ) ) ) ) ) ( NP-SBJ-2 ( NNP Mr. ) ( NNP Lawson ) ) ( VP ( VBD flooded ) ( NP ( DT the ) ( NN country ) ) ( PP-CLR ( IN with ) ( NP ( NN money ) ) ) ( S-PRP ( VP ( TO to ) ( VP ( VB prevent ) ( NP-3 ( DT the ) ( NN pound ) ) ( PP-CLR ( IN from ) ( S-NOM ( VP ( VBG rising ) ( PP ( IN against ) ( NP ( DT the ) ( NN mark ) ) ) ) ) ) ) ) ) ) )

When Mrs. Thatcher cut the top tax rate to 40 % Mr. Lawson flooded the country with money to prevent the pound from rising against the mark


( S ( PP ( IN As ) ( NP ( DT a ) ( NN result ) ) ) ( NP-SBJ ( PRP he ) ) ( VP ( VBD reignited ) ( NP ( NP ( DT the ) ( NN inflation ) ) ( SBAR ( WHNP-1 ( IN that ) ) ( S ( NP-SBJ ( NNP Mrs. ) ( NNP Thatcher ) ) ( PP-MNR ( IN through ) ( NP ( DT a ) ( ADJP ( JJ long ) ( CC and ) ( JJ costly ) ) ( NN effort ) ) ) ( VP ( VBD had ) ( VP ( VBN subdued ) ) ) ) ) ) ) )

As a result he reignited the inflation that Mrs. Thatcher through a long and costly effort had subdued


( S ( PP ( IN With ) ( S-NOM ( NP-SBJ ( NN inflation ) ) ( VP ( VBG surging ) ) ) ) ( NP-SBJ-1 ( DT the ) ( NN pound ) ) ( VP ( VBD began ) ( S ( VP ( VBG falling ) ( PP ( IN against ) ( NP ( DT the ) ( NN mark ) ) ) ) ) ) )

With inflation surging the pound began falling against the mark


( S ( S-PRP ( VP ( TO To ) ( VP ( VB keep ) ( S ( NP-SBJ-1 ( DT the ) ( NN exchange ) ( NN rate ) ) ( VP ( VBD pegged ) ) ) ) ) ) ( NP-SBJ-2 ( NNP Mr. ) ( NNP Lawson ) ) ( VP ( VP ( VBD tightened ) ( NP ( JJ monetary ) ( NN policy ) ) ) ( CC and ) ( VP ( VBD pushed ) ( NP ( NN interest ) ( NNS rates ) ) ( ADVP-CLR ( RB up ) ) ( PP-DIR ( TO to ) ( NP ( CD 15 ) ( NN % ) ) ) ) ) )

To keep the exchange rate pegged Mr. Lawson tightened monetary policy and pushed interest rates up to 15 %


( S ( NP-SBJ-2 ( DT This ) ) ( VP ( VBD doubled ) ( NP ( NP ( DT the ) ( NN mortgage ) ( NN interest ) ( NNS rates ) ) ( PP ( IN of ) ( NP ( NP ( DT the ) ( JJ many ) ( JJ new ) ( NNS homeowners ) ) ( SBAR ( WHNP-1 ( IN that ) ) ( S ( NP-SBJ ( NP ( NNP Mrs. ) ( NNP Thatcher ) ( POS 's ) ) ( NNS policies ) ) ( VP ( VBD had ) ( VP ( VBN created ) ) ) ) ) ) ) ) ( S-ADV ( VP ( VP ( VBG producing ) ( NP ( JJ widespread ) ( NN disaffection ) ) ) ( CC and ) ( VP ( VBG pushing ) ( S ( NP-SBJ ( NN Labor ) ) ( ADJP-PRD ( RB ahead ) ( PP-LOC ( IN in ) ( NP ( DT the ) ( NNS polls ) ) ) ) ) ) ) ) ) )

This doubled the mortgage interest rates of the many new homeowners that Mrs. Thatcher 's policies had created producing widespread disaffection and pushing Labor ahead in the polls


( S ( PP ( RB Instead ) ( IN of ) ( S-NOM ( VP ( VBG realizing ) ( NP ( NP ( PRP$ his ) ( NN mistake ) ) ( PP ( IN in ) ( S-NOM ( VP ( VBG letting ) ( S ( NP-SBJ ( DT the ) ( NN exchange ) ( NN rate ) ) ( VP ( VB dominate ) ( NP ( DT both ) ( NP ( JJ British ) ( JJ economic ) ( NN policy ) ) ( CC and ) ( NP ( NP ( NNP Mrs. ) ( NNP Thatcher ) ( POS 's ) ) ( JJ political ) ( NN fortune ) ) ) ) ) ) ) ) ) ) ) ) ( NP-SBJ-2 ( NNP Mr. ) ( NNP Lawson ) ) ( VP ( VBD pushed ) ( PP-CLR ( IN for ) ( S-NOM ( VP ( VBG tying ) ( NP ( DT the ) ( NN pound ) ) ( ADVP-MNR ( RB formally ) ) ( PP-CLR ( TO to ) ( NP ( DT the ) ( NN mark ) ) ) ( PP-MNR ( IN by ) ( S-NOM ( VP ( VBG entering ) ( NP ( NP ( DT the ) ( NNP European ) ( NNP Monetary ) ( NNP System ) ) ( SBAR ( WHNP-1 ( WDT which ) ) ( S ( VP ( VBZ subordinates ) ( NP ( DT all ) ( NN member ) ( NNS currencies ) ) ( PP-CLR ( TO to ) ( NP ( JJ German ) ( JJ monetary ) ( NN policy ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Instead of realizing his mistake in letting the exchange rate dominate both British economic policy and Mrs. Thatcher 's political fortune Mr. Lawson pushed for tying the pound formally to the mark by entering the European Monetary System which subordinates all member currencies to German monetary policy


( S ( NP-SBJ ( DT This ) ) ( VP ( VBD put ) ( NP ( NNP Mrs. ) ( NNP Thatcher ) ) ( PP-PUT ( IN in ) ( NP ( DT a ) ( NN bind ) ) ) ) )

This put Mrs. Thatcher in a bind


( S ( NP-SBJ ( NP ( DT The ) ( NN concept ) ) ( PP ( IN of ) ( NP ( JJ European ) ( NN integration ) ) ) ) ( VP ( VBZ is ) ( NP-PRD ( NP ( CD one ) ) ( PP ( IN of ) ( NP ( NP ( DT those ) ( JJ grand ) ( NNS schemes ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VP ( VBP appeal ) ( PP-CLR ( TO to ) ( NP ( NP ( NNS intellectuals ) ) ( NP ( DT the ) ( NNS media ) ) ( CC and ) ( NP ( DT the ) ( NN imagination ) ) ) ) ) ( CC but ) ( VP ( VBP are ) ( ADJP-PRD ( JJ full ) ( PP ( IN of ) ( NP ( JJ practical ) ( NNS pitfalls ) ) ) ) ) ) ) ) ) ) ) ) )

The concept of European integration is one of those grand schemes that appeal to intellectuals the media and the imagination but are full of practical pitfalls


( S ( SBAR-ADV ( IN If ) ( S ( NP-SBJ ( DT the ) ( NN pound ) ) ( VP ( VBD had ) ( VP ( VBN been ) ( VP ( VBN tied ) ( PP-CLR ( TO to ) ( NP ( DT the ) ( NN mark ) ) ) ) ) ) ) ) ( NP-SBJ-1 ( DT the ) ( NNPS British ) ) ( VP ( MD would ) ( VP ( VB have ) ( VP ( VBN been ) ( ADJP-PRD ( JJ unable ) ( S ( VP ( TO to ) ( VP ( VB cut ) ( NP ( PRP$ their ) ( JJ exorbitant ) ( NN tax ) ( NNS rates ) ) ) ) ) ) ) ) ) )

If the pound had been tied to the mark the British would have been unable to cut their exorbitant tax rates


( S ( NP-SBJ ( DT The ) ( NN reason ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ simple ) ) ) )

The reason is simple


( S ( SBAR-TMP ( WHADVP-1 ( WRB When ) ) ( S ( NP-SBJ ( DT a ) ( NN country ) ) ( VP ( VBZ cuts ) ( NP ( NN tax ) ( NNS rates ) ) ) ) ) ( NP-SBJ ( PRP it ) ) ( VP ( VP ( VBZ makes ) ( S ( NP-SBJ ( PRP itself ) ) ( ADJP-PRD ( RBR more ) ( JJ attractive ) ( PP ( TO to ) ( NP ( NNS investors ) ) ) ) ) ) ( CC and ) ( VP ( VBZ drives ) ( PRT ( RP up ) ) ( NP ( NP ( DT the ) ( NN value ) ) ( PP ( IN of ) ( NP ( PRP$ its ) ( NN currency ) ) ) ) ) ) )

When a country cuts tax rates it makes itself more attractive to investors and drives up the value of its currency


( S-CLF ( NP-SBJ ( PRP It ) ) ( VP ( VBD was ) ( NP-PRD ( NP ( NN fear ) ) ( PP ( IN of ) ( S-NOM ( VP ( VBG disturbing ) ( NP ( NNP EMS ) ( JJ exchange-rate ) ( NNS relationships ) ) ) ) ) ) ( SBAR ( WHNP-1 ( WDT that ) ) ( S ( VP ( VBD caused ) ( S ( NP-SBJ-2 ( NP ( DT the ) ( NNP Chirac ) ( NN government ) ) ( PP-LOC ( IN in ) ( NP ( NNP France ) ) ) ) ( VP ( TO to ) ( VP ( VB be ) ( ADJP-PRD ( JJ timid ) ( PP ( IN about ) ( S-NOM ( VP ( VBG cutting ) ( NP ( NN tax ) ( NNS rates ) ) ) ) ) ) ) ) ) ) ) ) ) )

It was fear of disturbing EMS exchange-rate relationships that caused the Chirac government in France to be timid about cutting tax rates


( S ( NP-SBJ ( NP ( NNP Edouard ) ( NNP Balladur ) ) ( NP ( NP ( DT the ) ( NN finance ) ( NN minister ) ) ( PP-TMP ( IN at ) ( NP ( DT the ) ( NN time ) ) ) ) ) ( VP ( VP ( VBD was ) ( VP ( VBN sold ) ( PP-CLR ( IN on ) ( NP ( DT the ) ( JJ tax-cut ) ( NN policy ) ) ) ) ) ( CC but ) ( VP ( VBD was ) ( VP ( VBN concerned ) ( SBAR ( IN that ) ( S ( NP-SBJ-1 ( PRP$ his ) ( NN government ) ) ( VP ( MD would ) ( VP ( VB be ) ( VP ( VBN criticized ) ( PP-CLR ( IN as ) ( ADJP ( JJ anti-European ) ) ) ( PP-CLR ( IN for ) ( S-NOM ( VP ( VBG disturbing ) ( NP ( DT the ) ( VBN linked ) ( JJ European ) ( NN currency ) ( NN relationship ) ) ) ) ) ) ) ) ) ) ) ) ) )

Edouard Balladur the finance minister at the time was sold on the tax-cut policy but was concerned that his government would be criticized as anti-European for disturbing the linked European currency relationship


( S ( NP-SBJ ( NP ( DT The ) ( NN price ) ) ( PP ( IN of ) ( S-NOM ( VP ( VBG attracting ) ( NP ( NP ( NN capital ) ) ( NP ( IN whether ) ( NP ( NP ( NN one ) ( POS 's ) ) ( JJ own ) ) ( CC or ) ( NP ( NP ( IN that ) ) ( PP ( IN of ) ( NP ( NNS foreigners ) ) ) ) ) ) ) ) ) ) ( VP ( VBZ is ) ( NP-PRD ( DT a ) ( NN trade ) ( NN deficit ) ) ) )

The price of attracting capital whether one 's own or that of foreigners is a trade deficit


( S ( S-PRP ( VP ( TO To ) ( VP ( VB avoid ) ( NP ( DT this ) ( NN deficit ) ) ) ) ) ( NP-SBJ-1 ( NNP Mr. ) ( NNP Lawson ) ) ( VP ( VBD inflated ) ( NP ( DT the ) ( NN pound ) ) ( SBAR-PRP ( IN in ) ( NN order ) ( S ( VP ( TO to ) ( VP ( VB prevent ) ( NP ( PRP$ its ) ( NN rise ) ) ) ) ) ) ) )

To avoid this deficit Mr. Lawson inflated the pound in order to prevent its rise


( S ( NP-SBJ ( DT This ) ( JJ misguided ) ( NN policy ) ) ( VP ( MD could ) ( RB not ) ( VP ( VB prevent ) ( NP ( DT a ) ( JJ British ) ( NN trade ) ( NN deficit ) ) ) ) )

This misguided policy could not prevent a British trade deficit


( S ( ADVP ( RB Consequently ) ) ( NP-SBJ ( NNP Mr. ) ( NNP Lawson ) ) ( VP ( VBD saddled ) ( NP ( NNP Mrs. ) ( NNP Thatcher ) ) ( PP-CLR ( IN with ) ( NP ( NP ( NP ( DT a ) ( NN record ) ( NN trade ) ( NN deficit ) ) ( NP ( VBN renewed ) ( NN inflation ) ) ( CC and ) ( NP ( JJ high ) ( NN interest ) ( NNS rates ) ) ) ( NP ( NP ( CD three ) ( JJ political ) ( NNS failures ) ) ( PP-LOC ( IN in ) ( NP ( DT a ) ( NN row ) ) ) ) ) ) ) )

Consequently Mr. Lawson saddled Mrs. Thatcher with a record trade deficit renewed inflation and high interest rates three political failures in a row


( S ( NP-PRD ( JJ Little ) ( NN wonder ) ) ( SBAR-SBJ ( IN that ) ( S ( NP-SBJ-1 ( NP ( NNP Mrs. ) ( NNP Thatcher ) ( POS 's ) ) ( NNS opponents ) ) ( VP ( VBD were ) ( ADJP-PRD ( RB so ) ( JJ anxious ) ( S ( VP ( TO to ) ( VP ( VB keep ) ( S ( NP-SBJ ( NNP Mr. ) ( NNP Lawson ) ) ( PP-LOC-PRD ( IN in ) ( NP ( NN office ) ) ) ) ) ) ) ) ) ) ) )

Little wonder that Mrs. Thatcher 's opponents were so anxious to keep Mr. Lawson in office


( S ( NP-SBJ ( NP ( PRP It ) ) ) ( VP ( VBZ is ) ( ADJP-PRD ( JJ extraordinary ) ) ( SBAR-2 ( IN that ) ( S ( NP-SBJ ( DT the ) ( NNP British ) ( NNP Treasury ) ) ( VP ( VBD thought ) ( SBAR ( S ( NP-SBJ-1 ( PRP it ) ) ( VP ( MD could ) ( VP ( VB prevent ) ( NP ( DT a ) ( NN trade ) ( NN deficit ) ) ( PP-MNR ( IN by ) ( S-NOM ( VP ( VBG inflating ) ( NP ( DT the ) ( NN pound ) ) ) ) ) ) ) ) ) ) ) ) ) )

It is extraordinary that the British Treasury thought it could prevent a trade deficit by inflating the pound