BIZWATCH : MARKETS.

MARKET LOGIC: The Dow Jones industrials rallied from a 50-point deficit to finish in record territory, as some traders bet that the Federal Reserve would not raise interest rates at its policy meeting today. But broad-market indexes finished lower.Broad indexes lagged blue chips.

MEMO

RATES UP: Interest rates on short-term Treasury securities rose in Monday's auction to the highest level in three weeks. The Treasury Department sold $11.6 billion in three-month bills at an average discount rate of 5.18 percent, up from 5.07 percent last week. An additional $11.5 billion was sold in six-month bills at an average rate of 5.30 percent, up from 5.19 percent.

CRAY INJURED: Supercomputer pioneer Seymour Cray is battling for his life after breaking his neck and severely injuring his head in a traffic accident blamed on a careless driver. Cray, 70, was in critical and unstable condition Monday at Penrose Hospital in Colorado Springs, Colo., said spokeswoman Kate Brewster. He underwent surgery to relieve brain swelling after the accident Sunday. Cray's Jeep Cherokee rolled three times after the driver of a Chevrolet Camaro tried to pass him and then hit another car, which slammed into Cray's vehicle. The other motorists weren't injured.

POTENTIAL BELL BUYER: Bellcore, the research and development cooperative of the Baby Bells, may have found a buyer. The seven regional Bell companies reportedly are prepared to sell the Newark, N.J., unit for $700 million to Science Applications International Corp., a defense contractor. The Bellcore consortium, whose scientists pioneered fiber-optic technology, was formed in 1984 with the breakup of American Telephone and Telegraph Co.

GM CREDIT CUT: General Motors Corp. plans to cut in half the $7,000 maximum car rebate offered to those who use its GM Gold MasterCard. Starting next year, consumers will be able to earn a maximum of $500 in rebates a year for a maximum of $3,500 after seven years - the same deal offered with the standard GM Card, which unlike the Gold MasterCard, does not have an annual fee. GM spokesman Dean Rotondo said the decision was made after GM compared its card's benefits with competitors' cards and found GM's to be ``overly rich.''

TAKEOVER REJECTED: Southern drug store chain Big B Inc. rejected a hostile $330 million buyout offer from Revco Drug Stores, but said it would consider other offers. Birmingham, Ala.-based Big B, with almost 400 drug stores in five states, then approved a poison pill anti-takeover defense. Officials at Revco headquarters in Twinsburg, Ohio, said they would not give up the fight.

REDUCED RATES: GTE Airfone plans to reduce the price of quick calls from its airplane telephones. As of Nov. 1, all airlines that offer GTE Airfone services will charge $2.99 for each call and $2.99 per minute, with a $15 maximum charge that callers will hit after four minutes. Two other carriers, In-Fight Phone and AT&T Wireless, reportedly are planning to cut their prices as well.

MISCELLANEOUS: America Online is hosting a series of weekly chat sessions with small-business expert Jane Applegate. The on-line forums, sponsored by the Bank of America, are held at 5 p.m. each Friday through Oct. 18. This Friday's topic is ``Finding and Retaining Good People.'' . . . State Farm now grants good-student auto insurance discounts to home schoolers.

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Chart: (1--Color) DOW INDUSTRIALS

(2--Color) BIZ FACTS

T op fall destinations

Percent of U.S. travelers surveyed who chose these states for autumn vacations

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