Dow Falls 24.01 as Stocks Suffer Broad Setback : Climbing Oil Prices, Falling Bonds Blamed

The stock market suffered a broad setback after rising oil prices, falling bonds and weak technology issues knocked the Dow industrials below key support levels. The Dow Jones index of 30 industrials, up 13.34 Wednesday, fell 24.01 to 2,086.59. Since the start of the week the Dow has dropped 42.86 points.

Big Board volume came to 149.46 million shares, against 151.99 million Wednesday. Declining issues outnumbered advances by about 5 to 2 in nationwide trading of New York Stock Exchange-listed stocks.

“There was a lot of institutional selling,” said Ken Sheinberg, a trader with Shearson Lehman Hutton Inc. He said higher oil prices and a one-point rise in the Commodity Research Bureau index undermined an already weak market.

Oil prices extended the advance begun Wednesday on expectations of a cease-fire in the Persian Gulf war. U.S. light crude for delivery in September was up 34 cents at $16.39 on expectations of greater harmony within the Organization of Petroleum Exporting Countries.

Bond prices were lower all day, and several computer firms reported disappointing second-quarter results, adding to the gloom.

Technology stocks posted some of the most notable losses amid a continuing barrage of earnings disappointments in the group.

Interest Rate Jitters

Many investors are waiting for today’s consumer price index report. “The nervous Nellies would rather be on the sidelines (before the report),” said Don Hays, investment strategist with Wheat First Securities. Hays said most analysts are expecting a rise in the June CPI of 0.4% to 0.5%.

“If there’s even a whiff of inflation, investors won’t want to hold stocks,” said Jack Solomon, a technician with Bear, Stearns & Co.

“There’s still a lot of nervousness about interest rates,” he said. If the inflation figure is higher than expected, the Federal Reserve may want to act decisively and clamp down on credit.

“In the technology sector, there seems to be a disaster or two a day,” said Newton Zinder at Shearson Lehman Hutton.

Tandem Computers was Thursday’s most active NYSE issue, down 2 3/4 at 14 5/8. The company said its earnings for the fiscal quarter ended June 30 came to 18 cents a share, down from 26 cents in the like period a year earlier.

Data General, which posted a $1.8-million quarterly operating profit that fell short of expectations on Wall Street, lost 2 1/8 to 20.

Among other computer and technology stocks, Motorola dropped 1 5/8 to 47 3/8, Hewlett-Packard fell 1 7/8 to 50 3/4 and Microsoft lost 3 to 61 in the over-the-counter market.

On the plus side, Macmillan Inc. rose 4 to 82 7/8. The company said it received an $80-a-share takeover proposal from Maxwell Communications, topping a $75-a-share bid launched earlier in the week by the Robert M. Bass Group.

Mead Gets Boost

Pillsbury gained 1 5/8 to 36 1/2, propelled by takeover speculation.

Mead Corp. climbed 2 5/8 to 38 1/2. Analysts cited enthusiasm over prospects for a new type of color copier paper the company is preparing to produce.

The Wilshire index of 5,000 equities closed down 27.427 at 2,668.479.

The NYSE’s composite index of all its listed common stocks dropped 1.66 to 150.90.

Standard & Poor’s industrial index fell 4.03 to 308.00, and S&P;’s 500-stock composite index was down 3.34 at 266.66.

The NASDAQ composite index dropped 2.77 to 388.86. The American Stock Exchange index closed at 308.20, down 0.98.

A late-session buying spree helped Tokyo stock prices close higher Thursday but masked a generally weaker market as investors continued to worry about the price of oil.

The Nikkei 225-share index rose 122.16 to 27,676.14.

However, prices fell Thursday on the London Stock Exchange. The Financial Times 100-share index slipped 2.8 to 1,864.4.