Jitters Depress Stock Prices; Dow Falls 7.62 : Concern Over Economy, Interest Rates Blamed

The stock market posted its second straight loss Wednesday, beset by uncertainties over interest rates and the economic outlook.

Airline, telephone and big-name computer and technology issues were among the leaders of the retreat.

The Dow Jones average of 30 industrials, off 7.07 on Tuesday, fell another 7.62 points to 1,258.06.

Volume on the New York Stock Exchange slowed to 95.48 million shares from 101.66 million Tuesday.

Analysts said the market’s recent sluggish behavior has prompted investors’ interest in stocks to dwindle, at least for the moment.

Though many analysts insist that the economy remains healthy, talk continues of a possible business slump starting later in the year.

Oppenheimer & Co. recently forecast a recession beginning around mid-1985. The economy is “losing, not gaining, momentum,” said Oppenheimer’s Francis H. M. Kelly in a commentary published Tuesday.

Uncertainty About Fed

Brokers also say there is a great deal of uncertainty about the future course of the Federal Reserve’s credit policy. Advance estimates are that the Fed’s weekly report after the close today will show a large increase in the money supply.

Todd Shipyards was the biggest percentage loser among Big Board issues, falling 5 3/8 to 30 5/8 after a Defense Department contract for the first ship in a new class of destroyers went to a competitor, Congoleum’s Bath Iron Works subsidiary.

Todd said its Los Angeles division would remain open but with a reduced work force.

Hilton Hotels jumped 8 1/2 to 72 on word that Golden Nugget plans an offer of $72 a share for a block of Hilton shares held by the estate of Conrad Hilton.

Among the regional telephone issues, Bell Atlantic dropped 1 1/8 to 83 1/8, Pacific Telesis 1 to 69 3/4 and Nynex 1 to 79 3/4. A Wall Street Journal article said analysts believed that the group was “fully valued at current prices.”

Point-plus losers among the airlines included AMR, down 1 3/4 at 40 3/4; UAL, down 1 at 44 3/4, and Delta, off 1 1/2 at 45 1/8.

Computer Issues Sink

In the computer and technology sector, International Business Machines lost 1 to 126 1/2, Digital Equipment 2 1/2 to 102 and Hewlett-Packard 1 1/8 to 33 1/2.

ITT dropped 3/8 to 35 1/8 in active trading. The company said no proposals encouraging its liquidation would be submitted to shareholders at its annual meeting May 16.

Declining issues outnumbered advances by almost two to one in the daily tally on the Big Board. The exchange’s composite index fell 0.76 to 103.77.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 111.58 million shares.

The Wilshire index of 5,000 equities closed at 1,858.389, down 6.340.

Standard & Poor’s index of 400 industrials dropped 1.53 to 199.70, and S&P;’s 500-stock composite index was down 1.42 at 179.11.

The NASDAQ composite index for the over-the-counter market slumped 1.88 to 277.86.

At the American Stock Exchange, the market-value index closed at 227.07, down 1.50.

Large blocks of 10,000 or more shares traded on the NYSE totaled 1,926, compared to 1,806 on Tuesday.

Bond Prices Slip

Bond prices drifted lower in light trading for the second consecutive session.

In the secondary market for Treasury bonds, prices of short-term governments fell 1/32 point, intermediate maturities fell 3/32 point and long-term issues were down 5/32 point, according to the investment firm of Salomon Bros. Inc. The movement of a full point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

In corporate trading, industrials and utilities fell 1/8 point in light trading, Salomon Bros. said.

Among tax-exempt municipal bonds, general obligations were off 3/8 point in moderate activity and revenue bonds were down point in light trading.

In the secondary market, yields on three-month Treasury bills were off 7 basis points at 8.21%. Six-month bills were up 2 basis points at 8.60%, and one-year bills were up 1 basis point at 8.80%. A basis point is one-hundredth of a percentage point.

Yields on 30-year Treasury bonds inched up to 11.70% from 11.68% late Tuesday.

The federal funds rate, the interest on overnight loans between banks, traded at 8.375%, up from 8.25% late Tuesday.

CH