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NORTHWEST AIRLINES CANCELS 400 FLIGHTS AS TALKS CONTINUE

Airports stockpiled pillows and blankets for stranded passengers as Northwest Airlines on Wednesday canceled 400 flights, including two out of Buffalo Niagara International Airport, in anticipation of a weekend strike by pilots. Progress was reported in the negotiations.

A Clinton administration official, meanwhile, speaking on condition of anonymity, said that the administration was "unlikely to get involved" if a strike was called.

Dean Smith, a spokesman for the Air Line Pilots Association, said the negotiations with a federal mediator were progressing and that a settlement might be reached before the strike deadline of 11:01 p.m. CDT Friday.

Northwest spokesman Jon Austin said the airline also hopes a settlement will be reached, but decided to cancel flights Friday and Saturday so the 25,000 passengers could make other arrangements.

Saturday's flight 1117, from Buffalo to Detroit, and flight 1839, to Minneapolis/St.Paul were both canceled, airline officials said.

$2.3 billion radio merger reported

DALLAS (AP) -- Chancellor Media Corp. is buying Capstar Broadcasting Corp. for about $2.3 billion in stock in a deal that will create the nation's biggest radio station group.

The combined company will have 463 radio stations in 105 markets as well as interests in television, billboards and ad sales.

The two Texas-based companies would have had about $1.6 billion in radio revenues last year had they been combined at the time. That would have surpassed the $1.5 billion in radio revenue of industry leader CBS Corp.

The combination disclosed today would be the latest in a flurry of matchups in the radio industry following the government's relaxation of limits on how many stations can be controlled by a single company.

Harnischfeger cuts 2,350 jobs

MILWAUKEE (AP) -- Paper and mining equipment manufacturer Harnischfeger Industries Inc. plans to cut about 2,350 jobs, or another 16 percent of its work force, and posted an unexpectedly large loss in its latest quarter.

Sales of paper and pulp equipment in financially-troubled Asia were said to be down sharply. The job cuts were being made as part of efforts to bring expenses in line with lower sales levels, company officials said.

Wall Street sent its stock down sharply. Harnischfeger shares tumbled $3.37 1/2 to $16.87 1/2 -- a decline of 16.7 percent -- on the New York Stock Exchange.

The job cuts announced Wednesday were in addition to 750 jobs that it previously said would be eliminated at its Beloit Corp. paper equipment division.

Yields decline on two-year T-notes

WASHINGTON (AP) -- Yields on two-year Treasury notes fell in Wednesday's auction to the lowest level in more than two and a half years.

The high yield was 5.125 percent, down from 5.475 percent at the last auction on July 29. The notes will carry a coupon interest rate of 5 1/8 percent.

Wal-Mart plans big N.Y. warehouse

JOHNSTOWN (AP) -- Wal-Mart will build a grocery distribution center here, creating 400 permanent full-time jobs in Fulton County.

Wal-Mart announced Wednesday that it will spend more than $40 million on the center, which will also create about 300 construction jobs.

The Arkansas-based chain now has 56 Wal-Mart stores and Supercenters and 18 Sam's Clubs in New York. Wal-Mart also operates two other distribution centers in Marcy and Sharon Springs. The company employs 19,000 statewide.

The new center will provide groceries to Northeastern stores, Wal-Mart said.

In other business news

A United Auto Workers local has set a strike deadline of midnight today in its negotiations for a first-time contract with Lear Corp. About 320 members of UAW Local 1112, who work at Lear's seat assembly plant near Youngstown, Ohio, have voted to authorize a strike if contract talks are not resolved, said Warren Davis, director of UAW's Region 2 in Cleveland. The Lear plant provides seating systems for General Motors' Lordstown assembly complex.

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