Dow Off 76, One of Worst Drops Since Black Monday : Dollar’s Fall Greases Skid on Wall St.

Wall Street, struggling in one of its worst setbacks since the October crash, fell heavily today amid gloom over the dollar’s plunge to new lows.

The Dow Jones industrial average tumbled down 76.76 points to 1,833.72--a 4% decline and the eighth-biggest daily point drop--after managing to find technical support at the 1,800 level. The closely watched index had been off nearly 110 points by mid-afternoon. Declining issues led gainers by a 13-1 margin.

The Dow recovered from its low of 1,799, which was just above the 1,793 close on Oct. 26, the last time it was at that low level.

Extremely Heavy Volume

On Black Monday, Oct. 19, the average dropped a record 508 points.

Volume was extremely heavy, with 268.91 million shares traded. That compared to 86.36 million shares Friday, the first post-Thanksgiving holiday in decades that the Dow lost points--36.47.

Today’s early fall was triggered by the dollar’s fall to new postwar lows, which ignited concerns over higher inflation and interest rates.

“We have a sense of deja vu here enveloping the financial markets,” said Allen Sinai of Shearson Lehman Brothers Inc. “Nothing much has changed in the background--the budget and trade deficit picture remains bleak.”

‘Kind of Demoralizing’

“What had been happening is that the market was stabilizing prior to Friday, and some confidence was being restored ever so gradually,” said Hugh Johnson, a senior vice president for First Albany Corp. “Today was kind of demoralizing.”

Traders noted growing frustration that little has been done to combat the “double deficits” in the American economy which continue to plague the dollar, fanning inflation concerns. Interest rates, as a result, have been moving higher again in recent days, a repeat of the pre-October crash scenario, and stocks have been under pressure.

A view that the United States is willing to let the dollar fall further in order to fuel domestic growth hastened its slide. “There’s continued speculation on where the U.S. wants the dollar to be,” said a dealer at a U.S. investment bank.

The U.S. currency fell to 1.6360 marks, down from 1.6510 at Friday’s close, and to 132.15 yen, down from 133.50.