BIZWATCH : MARKETS.

MARKET LOGIC: More healthy economic statistics plagued Wall Street on Friday as investors started worrying again that inflation and higher interest rates may be on the way.

The Dow Jones industrial average fell 31.44 to 5,616.21. For the week, the Dow was down 106.53.

MEMO

CASINO CUTS BACK: Stratosphere Corp. has indefinitely suspended plans to build more hotel rooms and retail shops in its Las Vegas casino complex because it will be short of cash and needs to restructure its $203 million debt.

Stratosphere, which is 42 percent owned by Grand Casinos Inc., said the move won't affect ongoing operations or guests visiting its casino, hotel and observation tower. The casino is expected to generate as little as $35 million in annual cash flow, less than half the $80 million that analysts had initially expected.

LITTON EARNINGS UP: Litton Industries Inc. reported net income of $150.9 million in fiscal 1996, a 12 percent increase over last year.

The Woodland Hills-based maker of electronic, defense and information systems posted sales of $3.6 billion, a 9 percent improvement. Primary earnings per share were $3.15 compared with $2.84.

BANK SELLS BRANCHES: Home Savings of America has agreed to sell its four Arizona branches to First National Bank of Arizona, a subsidiary of Bancorp Hawaii Inc. The branches have deposits of approximately $270 million. Home said that the sale is part of its ongoing strategy to concentrate deposit-gathering activities in its key retail markets of California, Texas and Florida.

HAIRY AFFAIR: Four men fired after Blockbuster Entertainment instituted a rule limiting the length of their hair are suing the Fort Lauderdale music and video chain.

Filed in Miami federal court Friday, the suit accuses Blockbuster of sex discrimination and retaliation against the men who wore long locks and ponytails.

``What they did to us was very unfair,'' said Abe Del Carmen, 25, one of the men. An assistant manager who had worked for the record store for almost five years in 1994, Del Carmen refused to cut his hair to comply with the new rules.

Blockbuster declined to comment on the suit Friday.

LABOR DAY MESSAGE: Many Americans are not sharing in the benefits of the nation's economy, Labor Secretary Robert Reich said in his Labor Day message.

``The outlook for American workers on this Labor Day is positive in terms of the growing number of good jobs, a declining level of non-inflationary unemployment and a gradual but steady movement toward more diversity in the workplace,'' Reich said Friday.

``But the challenge remains: Americans need better acces to education and job skills,'' he said. America is growing at a healthy clip and can grow even faster if we build the skills of our work force.''

MISCELLANEOUS: Carpeteria opened its newest showroom Friday at 17137 Ventura Blvd. in Encino. . . . DDL Electronics Inc. of Newbury Park says it has terminated merger discussions with Circuit Systems Inc.

CAPTION(S):

Photo, 2 Charts

Photo: (color) no caption (Robert Reich)

Chart: ( 1) Dow Industrials

(2) OUT-OF-WORK TEENS

Unemployment for teenagers ages 16 to 19, in selected countries, 1994