FINANCIAL MARKETS : Investor Jitters Rattle Market; Dow Off 10.77

Wall Street started the week badly Monday, extending the blue chip index’s decline over the last six sessions to nearly 170 points amid anxiety about rising interest rates and the U.S. trade performance.

The Dow Jones industrial index fell 10.77 points to 2,471.44.

It had dropped 38 points early in the session as investors were discouraged by news from Japan that the country’s trade surplus with the United States was virtually unchanged in September. The report threw cold water on Wall Street’s hopes for a smaller U.S. trade deficit for the month.

From the record high of 2,722.42 it reached Aug. 25, the Dow index has now fallen 250.98 points, or 9.22%.

Volume on the New York Stock Exchange came to 141.87 million shares, against 158.31 million in the previous session.

The relatively slow pace of activity was attributed largely to the absence of many traders taking Columbus Day off.

But holiday or not, analysts said the market was having trouble attracting buyers, given its poor recent performance and intensifying competition from interest-bearing investments.

Optimists looking for some help for the stock market were focusing on Wednesday’s scheduled report from the government on the nation’s trade balance for August. Most estimates call for the data to show improvement from the record $16.5-billion deficit between imports and exports posted in July.

Merrill Lynch economists, for example, estimate the August figure at $15 billion.

IBM Up

Losers among the blue chips included International Paper, down 1 at 47 3/4; McDonald’s, down 2 5/8 at 47 1/2; Merck, down 4 at 195 3/4; Coca-Cola, down 3/8 at 44 7/8, and Ford Motor, down 1 at 93 3/4.

Ford agreed to acquire U.S. Leasing International for $68 a share, sending U.S. Leasing’s stock up 14 1/2 to 67.

On the plus side, International Business Machines gained 2 1/8 to 149 1/2; General Electric rose to 58 1/2; Eastman Kodak advanced 2 1/8 to 101, and American Telephone & Telegraph climbed 3/8 to 32 7/8.

Glaxo Holdings led the NYSE active list, down 4 3/8 at 23 7/8. Analysts said the earnings gain posted by the London-based pharmaceutical company for the year ended June 30 fell short of some expectations.

Salomon Inc. rose 3/8 to 36 7/8. The company said it completed a “strategic reappraisal” of its Salomon Bros. subsidiary.

The Limited gained 1/8 to 28 7/8 in active trading. The company said it had finished repurchasing 2 million shares of its stock and has been authorized by its directors to buy back another 7 million.

Indicators Decline

Declining issues outnumbered advances by more than 3 to 1 on the NYSE. The exchange’s composite index fell 1.12 to 173.52.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 165.94 million shares.

Standard & Poor’s index of 400 industrials fell 2.15 to 359.21, and S&P;’s 500-stock composite index was down 1.68 at 309.39.

The Wilshire index of 5,000 equities closed at 3,056.389, down 23.024.

The NASDAQ composite index for the over-the-counter market dropped 5.39 to 433.04. At the American Stock Exchange, the market-value index closed at 343.57, down 3.24.

European stocks also drifted lower, with London’s Financial Times stock exchange 100-share index down 28 points to close at 2,338.5.

In Tokyo, the Nikkei 225-share index fell 54.12 to close at 26,284.65 as the market was burdened by last week’s steep losses on Wall Street.

There was no trading of Treasury bonds because of the Columbus Day holiday. Banks and government offices also were closed.

Analysts said Friday that the credit markets are becoming convinced that interest rates will continue to rise.

On Friday, some Treasury bond yields rose above 10% for the first time since 1985, and traders suspect that yields could continue to climb.

The Treasury’s closely watched 30-year issue closed Friday with a yield of 9.93%, up from 9.85% late Thursday.