Computerized Trades, Deficit Figure Depress Market; Dow Off 10.49

Stock prices lost ground Thursday because of government figures showing a large federal budget deficit in August and computer-driven program trading.

The Dow Jones industrial index fell 10.49 to close at 2,080.01. Declining issues outnumbered advances by about 8 to 5 in nationwide trading of New York Stock Exchange-listed stocks.

Big Board volume totaled 150.67 million shares, up from 127.40 million Wednesday, when activity was curtailed somewhat by the observance of Yom Kippur.

The government said the federal budget deficit in the first 11 months of the current fiscal year has exceeded the Reagan Administration’s projection for the entire year. But budget analysts expect that a surge of corporate tax payments will give the government a surplus in September and reduce its total deficit for fiscal year 1988, which ends at the end of this month.

In addition, Wall Street has become concerned about a recent rise in short-term interest rates in the bond market.

Heart Attack Rumors

“Short-term rates have been a real thorn in the market’s side,” said Brian Luedtke, a technical analyst at Piper, Jaffray & Hopwood. “If the rates would come down, that would be a focal point and would let people get committed (to the stock market).”

“There’s no compelling reason to buy,” agreed Donald Crooks, a Morgan Stanley & Co. trader.

However, other market watchers said the pessimism that has clouded the market may be finally tapering off. “I think this is the last gasp before we go on to new highs,” said Morry Markovitz, president of Balfour Mclaine Advisers.

Earlier Thursday, the market fell because of rumors that President Reagan had suffered a heart attack. It then recovered some ground when the White House refuted the story.

But the budget statement, released in the afternoon, combined with late program selling to drive the market down in the last hour.

Market optimists said an improved performance by some technology issues, which have been battered in recent weeks, was a good sign.

“A lot of technology stocks have gotten down to the (equivalent of) the October lows of the Dow,” said Luedtke, referring to last year’s market crash.

The Nikkei 225-share index closed at 27,428.31, down 284.35, on the Tokyo Stock Exchange.

The exchange will be closed today for the Japanese national holiday, the autumn equinox. Trading will resume Saturday.

Prices on the London Stock Exchange fell in modest trading, with activity again focused on takeover rumors after Wednesday’s bid for Consolidated Gold Fields PLC by Minorco, which would be the largest takeover of a British company.

The Financial Times 100-stock index closed at 1,788.7, down 8.1.