Consumer borrowing surged in July, mainly reflecting heavy credit-card use, which posted its sharpest increase in two years. Consumers' credit outstanding, excluding mortgage debt, advanced at a 7.9 percent annual rate in July to a seasonally adjusted $1.354 trillion, the Federal Reserve said. All told, consumers borrowed $8.8 billion more in July than during the month before, greater than the $6.3 billion gain many analysts' had expected.

Lorcin Engineering, a California-based manufacturer of inexpensive handguns, shut its doors last month, according to people in the gun industry. Lorcin was one of the leading producers of "Saturday night specials," and its guns were among those most frequently traced to crimes. Lorcin's operations were highly profitable, but the company's two business partners recently had a falling-out, industry officials said. Lorcin officials could not be reached or did not respond to requests for comment.

American Airlines had the most passenger complaints of any major U.S. airline in July, while America West Airlines ranked last in on-time performance, the government said. American placed first for the second month in a row in complaints, with more than five filed for every 100,000 passengers in July, the Department of Transportation said. About 60 percent of America West's flights were on time, ranking it last among the 10 largest carriers. Southwest Airlines performed best in both areas for the second month in a

row.

The American Medical Association wants a federal judge to impose an additional condition on Aetna's $1 billion acquisition of Prudential HealthCare to ensure competition in Dallas and Houston. The AMA said it wants the court for five years to keep Aetna from requiring doctors in the two cities who want to join its network to accept customers from all health plans offered by the company.

Wholesaler inventories rose in July by 0.9 percent, their fastest pace in 10 months, led by increases in stockpiles of lumber, electrical equipment and furniture, the Commerce Department reported. Wholesaler sales fell 0.2 percent, their first decline since January.

Several former floor brokers at the New York Stock Exchange may get longer prison terms than they bargained for, after a federal judge said he would conduct hearings to determine whether their plea agreements were too lenient. U.S. District Judge Jed Rakoff in New York also said he would weigh the extent of the wrongdoing by the former brokers, who pleaded guilty to misusing their seats on the exchange to make illegal trades for themselves.

Swissair's offer of full compensatory damages--but no punitive awards--has been rejected by the relatives of the 229 people who died when Swissair Flight 111 crashed off Nova Scotia last September. The families of the victims are seeking $16 billion in damages from the airline and related companies.

Bell Atlantic faces a $50 million lawsuit alleging the company retaliates against workers who report discrimination. The suit, filed by 20 black current and former employees, charges the telecommunications company has harassed and denied promotions to employees who complained about discrimination on the job. Bell Atlantic spokeswoman Joan Rasmussen said the company had not seen the complaint. But she said the company has a strong record of keeping discrimination out of the workplace.

Eskimo Pie, a dessert marketer, will sell its licenses and plants under a liquidation plan from its largest shareholder and suitor Yogen Fruz World-Wide, Yogen Fruz chief executive Michael Serruya said. The plan was adopted at Eskimo Pie's annual shareholder meeting, Serruya said. Yogen Fruz, which owns 17 percent of Eskimo Pie, had sought to oust Eskimo Pie's board and install one friendly to its idea to break up the company and sell the pieces. Serruya said Eskimo Pie had earlier balked at the plan.

Conseco said it will abandon an accounting method investors criticized for distorting profits, causing a decline in 1999 earnings at the life insurance and consumer finance company. The Carmel, Ind.-based company will stop using "gain-on-sale" accounting, which allowed it to immediately book the earnings it expects to make at its Green Tree Financial unit from bundling consumer loans and selling them as securities.

INTERNATIONAL

The International Monetary Fund, once a strong backer of open capital markets, acknowledged that Malaysia's controversial capital controls had brought better-than-

expected results. The IMF's annual review of world capital markets said "nonstandard" methods such as the Malaysian controls sometimes could be justified, especially for countries under the sort of pressure Malaysia faced during Asia's financial crisis.

COMPENSATION

Oracle almost tripled President Raymond J. Lane's salary and bonus to $3.35 million, according to a Securities and Exchange Commission filing. Lane has been courted to head Compaq and Hewlett-Packard.

RECALLS

About 10,700 stepladders have been recalled because of faulty steps that can cause people to fall. The Consumer Product Safety Commission said the RIDGID ladders, made by Louisville Ladder Group of Louisville, Ky., have steps that are too short and improperly attached to the ladder. The company received report of one step falling off, but no injuries, the commission said. The ladders were sold at Home Depot stores from May until July. They come in lengths of six, eight and 10 feet, with model numbers that start with R-3011. Consumers should call 1-888-318-7911 to find out if the steps are properly attached. Home Depot will make exchanges or give refunds.

EARNINGS

H.J. Heinz said fiscal first-quarter profit rose 6.1 percent, to $236.9 million, over the same period a year ago on higher sales of ketchup and frozen foods, as well as savings from its restructuring.

LOCAL BUSINESS

CSX of Richmond said it will cut as many as 800 management jobs in an effort to reduce costs by $75 million a year. The parent of the third-largest U.S. railroad said it will take a fourth-quarter pretax charge of $55 million to $75 million to pay for the early-retirement and buyout program.