Dow Falls 34.43; Loss for Week Is a Record 158.78 : Index Holds at 2,500 Level Until Late Selling Wave Takes It to a 2,482 Close

Wall Street stocks tumbled in light trading Friday, climaxing a series of losses that added up to the biggest weekly point decline by the Dow Jones industrial index in Wall Street history.

The Dow Jones average of 30 industrials fell another 34.43 to 2,482.21, finishing the week with a record point loss of 158.78, or 6%.

The previous largest point decline came the week of Sept. 12 of last year, when the average fell 141.03, or 7.4%.

Friday’s volume on the New York Stock Exchange was a sluggish 158.31 million shares, down from 198.70 million in the previous session.

After holding the 2,500 level against several determined selling efforts through an up-and-down session Friday, a late plunge cleared away the support there and the session ended in another rout.

“This has been a week of reckoning,” said stock market analyst John Connolly of Dean Witter Reynolds. “The stock market decided it could ignore the rise in interest rates no longer.”

Analysts said a few buyers moved early in the session into stocks that had fallen sharply of late.

Rates Move Higher

But enthusiasm was muted by continuing interest-rate worries. Recent increases in interest rates, particularly in the short-term money markets, have prompted talk that the Federal Reserve might soon raise its discount rate again.

The Fed increased the rate it charges on loans to private financial institutions to 6% from 5.5% on Sept. 4, citing spreading inflationary expectations.

Rates on long-term Treasury bonds kept climbing Friday, pushing close to--or in a couple of instances, reaching--10%.

Amid the general gloom, activity in takeover situations and rumored targets was brisk.

The price of Farmers Group shares rose 1 to 49 3/4 in heavy over-the-counter trading on the basis of a report in the latest issue of Business Week magazine that the company is engaged in negotiations with a British insurance company to merge or be taken over for $60 a share. The volume was 747,700 shares, more than three times Farmers’ recent daily average.

A spokesman for Farmers, the Los Angeles-based parent of Farmers Insurance Group, said it is company policy not to comment on such reports.

Telex jumped 9 3/8 to 70 3/8. Interests headed by investor Asher B. Edelman began a $65-a-share tender offer for Telex’s stock, and speculation ran high on Wall Street that another, higher bid might be forthcoming.

Advanced Systems, which agreed to be acquired by National Education Corp. through an exchange of stock, climbed 8 7/8 to 34 7/8.

J. P. Stevens rose 5 1/8 to 43 5/8. The company said it knew of no explanation for the activity.

On the downside, NBI fell 1 3/8 to 9 1/2. The company said it expects to post a bigger-than-expected loss for the quarter that ended Sept. 30.

Losers Lead 2 to 1

Losers among the blue chips included International Business Machines, down 4 1/8 at 147 3/8; General Electric, down 2 at 58; Du Pont, down 4 at 110 1/2, and International Paper, down 1 1/2 at 48 3/4.

Declining issues outpaced advances by more than 2 to 1 on the Big Board, with the exchange’s composite index lost 1.68 to 174.64.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 181.63 million shares.

Standard & Poor’s index of 400 industrials fell 4.10 to 361.36, and S&P;’s 500-stock composite index was down 3.09 at 311.07. The Wilshire index of 5,000 equities closed at 3,079.413, down 29.405.

The NASDAQ composite index for the over-the-counter market dropped 1.60 to 438.43. At the American Stock Exchange, the market-value index closed at 346.81, down 2.12.

In Tokyo, share prices advanced to their second consecutive record close Friday as Tokyo investors shrugged off Wall Street’s interest rate and economic worries and extended Thursday’s lively rally.

The Nikkei 225-share price index rose 52.02 points to a record finish at 26,338.77,

However, British shares closed lower mainly because of a weak Wall Street opening and despite optimism about the economy, dealers said.

London’s Financial Times Stock Exchange index of 100 shares ended down 9 points at 2,366.5.