Dow Off 14 in Market’s Biggest Fall in 5 Weeks : Technology, Financial and Aerospace Issues Hardest Hit as ‘Sell Programs’ Are Triggered

Stocks tumbled to their worst loss since Aug. 6 on Wednesday as Wall Street grew increasingly worried about the economy’s strength and corporate earnings.

The Dow Jones average of 30 industrials skidded 14.01 to 1,319.44, with none of the 30 stocks gaining ground. It was the measure’s worst decline since dropping 21.73 points five weeks ago.

Declining issues overwhelmed advances four to one on the New York Stock Exchange and only two of the Big Board’s 15 most-active issues moved ahead.

Technology, financial, telephone and aerospace stocks were among those hardest hit.

Big Board volume totaled 100.38 million shares, compared to 104.73 million on Tuesday.

Impact Magnified

Heavy selling related to stock-index futures, which contributed to Tuesday’s broad loss, was again a factor in Wednesday’s decline. The “sell programs” occur when brokerage firms buy the futures contracts and sell the indexes’ underlying stocks to profit from differences in their prices.

But dealers said the impact of the programs was magnified by the existing weakness of the market, which reflects investors’ growing concern that the economy is not rebounding as previously expected.

“There seems to be a thick feeling of pessimism developing,” said Charles Jensen, technical analyst at MKI Securities in New York.

Thomas Czech, director of research at Blunt Ellis & Loewi in Milwaukee, said that “it finally hit the market square between the eyes that corporate earnings are going to be sluggish” in the third and fourth quarters.

Market Disappointed

Czech said the market also was disappointed by the Commerce Department’s report that American business plans to spend 5.8% more on new plant and equipment this year than in 1984. The estimate represented a downward revision from a June forecast that called for a 6.2% spending increase.

“Some people were looking for that number to be revised upward,” Czech said.

He also cited a speech by Preston Martin, vice chairman of the Federal Reserve, in which Martin took note of “substantial downside risks for this sluggish economy,” including rising consumer debt and the potential for a sharp decline in multifamily and office construction because of rising vacancy rates.

SCM fell 1/2 to 72 5/8 and topped the NYSE’s active list. SCM agreed to a $74-a-share leveraged buy-out by SCM management and Merrill Lynch, after which rival bidder Hanson Trust PLC of Britain dropped its offer. Merrill Lynch lost 3/4 to 30 1/8.

Richardson-Vicks, which soared earlier this week after rejecting a takeover bid from Unilever, retreated 1 5/8 to 46 3/8.

Oil issues posted modest declines after a rumor circulated on world financial markets that Saudi Arabian Oil Minister Ahmed Zaki Yamani had been assassinated or died of an illness. Saudi officials later said that the rumor was unfounded and that Yamani was “alive and well.”

Telephone Stocks Decline

Amoco fell 3/8 to 64, Atlantic Richfield dropped 3/8 to 60 and Exxon slipped 1/8 to 52 1/8.

In the telephone sector, Nynex dropped 1 5/8 to 81, Southwestern Bell was off 1 at 79 and US West tumbled 1 to 78.

Echlin fell 5/8 to 12 1/8 after a 1.14-million-share block crossed at 12.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 117.71 million shares.

The NYSE composite index dropped 1.10 to 107.22.

Large blocks of 10,000 or more shares traded on the NYSE totaled 1,770, compared to 2,055 on Tuesday.

Standard & Poor’s index of 400 industrials fell 2 to 206.16, and S&P;’s 500-stock composite index was down 1.87 at 185.03.

The Wilshire index of 5,000 equities closed at 1,913.101, down 20.138.

Index Loses

At the American Stock Exchange, the market-value index lost 1.97 to 228.34.

The NASDAQ composite index for the over-the-counter market closed at 291.43, down 3.07.

In the credit markets, bonds closed lower.

In the secondary market for Treasury bonds, prices of short-term governments fell 2/32 point, intermediate maturities fell 4/32 point and long-term issues were down 4/32 point, according to the investment firm of Salomon Bros.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 0.77 to 104.99. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, fell 1.22 to 1,103.74.

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

Revenue Bonds Off

Among tax-exempt municipal bonds, general obligations fell 1/2 point and revenue bonds were down 3/4 point. Trading was moderate to light.

Yields on three-month Treasury bills were up 2 basis points to 7.24%. Six-month bills rose 2 basis points to 7.42% and one-year bills were up 2 basis points at 7.62%.