Dow Plunges 50 as Selloff Nips Year-End Rally : ‘Witching Hour’ Jitters Depress Blue Chip Stocks

Stock prices took a spill Thursday as the market’s year-end rally ran into some resistance from sellers.

Weakness was concentrated in the blue chips on the eve of today’s “witching hour” involving expiring stock index futures and options.

The Dow Jones index of 30 industrials, which had risen 207.73 in the previous eight sessions, fell 50.07 to 1,924.40.

Declining issues outnumbered advances by about 8 to 5 on the New York Stock Exchange. Big Board volume totaled 191.78 million shares, against 193.82 million in the previous session.

Analysts said hopes continued to increase on Wall Street that the overall economy could weather the September-October market collapse without severe damage.

The Commerce Department said Thursday that the nation’s gross national product grew at a 4.3 % annual rate, after adjustment for inflation, in the third quarter. The figure had earlier been estimated at 4.1%.

Nevertheless, brokers said many investors were leery of chasing after the recent advance in stock prices, doubting that enthusiasm for the market could revive so quickly after its drastic drop this fall.

Blue Chip Losers

They also noted some uneasiness about possible swings in the market through today, with December contracts on stock index options and futures approaching their expiration and delivery dates.

These contracts are used, along with many of the blue chip stocks, by program traders in multiple trading strategies.

Losers among the blue chips included International Business Machines, down 3 3/8 at 115 1/2; USX, down 1 3/4 at 28 5/8; General Electric, down 1 5/8 at 45; Philip Morris, down 3 3/8 at 89 5/8, and Eastman Kodak, down 1 1/2 at 49.

Energy stocks were mostly lower as the price of oil, which has been slumping lately, gyrated widely. Mobil dropped 1 5/8 to 36; Chevron fell 1 to 37 1/2; Amoco lost 7/8 to 64 5/8, and Atlantic Richfield dipped 5/8 to 65 1/2.

However, a recent rally in airline issues, inspired by anticipation of lower fuel costs, bogged down. Allegis lost 1 3/8 to 70 1/2; Delta Air Lines slipped to 39 7/8; AMR was unchanged at 34 5/8, and NWA was unchanged at 38.

Paco Pharmaceutical was the day’s standout gainer, climbing 3 to 12 on word from the company that it was talking with an unidentified party about the possibility of being acquired.

The Wilshire index of 5,000 equities closed at 2,370.921, down 35.350.

The NYSE’s composite index of all its listed common stocks fell 2.32 to 136.02.

Fewer Block Trades

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 224.02 million shares.

Large blocks of 10,000 or more shares traded on the NYSE totaled 3,633, compared to 3,763.

Standard & Poor’s index of 400 industrials dropped 6.14 to 280.38, and S&P;’s 500-stock composite index was down 5.10 at 242.98.

The NASDAQ composite index rose 0.26 to 319.51. At the American Stock Exchange, the market-value index closed at 251.18, down 0.92.

Share prices in most foreign stock markets rose on the falling oil prices, which should reduce business costs in many industries. London’s key Financial Times-Stock Exchange index was up 16.4 at 1,706.2 in brisk trading enlivened by takeover speculation.

Tokyo investors, confident about the outlook of Japan’s economy, lifted the 225-share Nikkei index 80.41 to 22,899.83.