Traders Worry About Dollar Skid--Dow Off

Stock prices fell broadly Tuesday, as interest rate worries stirred up by the plunging dollar spilled over from the sagging bond market, inspiring traders to take profits, analysts said.

The Dow Jones average of 30 industrials closed at 2,158.04, down 18.70.

Among New York Stock Exchange-listed issues, losers outpaced gainers by slightly more than two to one.

Volume on the Big Board totaled 168.29 million shares, compared to 143.30 million shares Monday.

Bond prices sagged, and futures indexes also fell. This kicked off some computerized sell programs of the underlying “baskets” of stocks during the session, adding to the downward momentum, analysts said.

At midday, the Dow Jones average was down more than 30, but it began moving back as the stocks and indexes came back into line.

Treasury issues fell sharply, reflecting trader fears about the dollar and interest rates.

The government’s 30-year bond fell 15/16 point, or nearly $10 per $1,000 face amount, while its yield climbed to 7.61% from 7.52% late Monday.

Corporate and municipal bond prices also dropped.

A key interest rate, the federal funds rate, continued to trade at high levels Tuesday, although it fell 1/16 point to 6.25%. The federal funds rate is the interest charged for overnight loans between banks.

In the secondary market for Treasury bonds, prices of short-term governments ranged 1/16 point to 1/8 point lower; intermediate maturities ranged point to nearly 1/2 point lower, and long-term issues fell nearly a point, according to Telerate Inc. The movement of a point is equivalent to a change of $10 in the price of a $1,000 bond.

In corporate trading, industrials fell 1/2 point and utilities were 5/8 point lower in moderate activity, according to Salomon Bros.