Wall Street stocks dropped sharply across the board on what traders called a "blue Monday" as concerns grew about lackluster corporate earnings and higher interest rates.
The Dow Jones industrial average dropped 47.34 points to 2,582.17--the lowest close since the Friday the 13th drop of 190 points last month. Computer-aided sell programs may have exacerbated the fall near the close, contributing about 15 points of the final loss, traders said.
"It was a very blue Monday," said Clemens Lueker, manager of equity trading at Bateman Eichler, Hill Richards Inc. in Los Angeles. "There was very poor volume and . . . it looks like the program traders came in near the last 20 minutes of trading to really upset the whole apple cart."
The New York Stock Exchange's new "collar" on program trading, announced last week and intended to delay such activity after a 30-point drop in the Dow, was not in place Monday because it is still under review by the Securities and Exchange Commission.
Losers outnumbered gainers by more than 3 to 1 on relatively light Big Board volume of 135.48 million shares, which compared with Friday's 131.50 million.
Analysts credited some of the selloff to worries over higher interest rates as the Treasury postponed its weekly T-bill auction Monday in the wake of congressional delays on raising the federal debt limit. Some traders may have interpreted the delay as a signal that interest rates would edge upward, analysts said.
The Treasury's bellwether 30-year bond fell one-quarter of a point, pushing its yield to 7.96% from 7.94% on Friday. A one-point movement in 30-year bonds is equivalent to $10 for every $1,000 of face value.
"There's a loss of faith in the bond market," said Abby Joseph Cohen, chief market strategist at Drexel Burnham Lambert Inc. in New York. "There was a perception that the slowing in economic activity would mean lower interest rates, but we see interest rates stalling out and maybe trending up a little higher, reflecting a lack of interest on the part of new investors," she added.
Other investors may have been reacting finally to a couple of weeks of lower-than-expected corporate earnings reports, analysts said. "A lot of it is coming home to roost," Lueker said.
The most active issue was Amax, which closed down 1/8 at 22 1/4 on volume of 8.22 million shares.
Auto stocks were down in the wake of slack October sales reports Friday. Ford was down 1 3/4 to 43 7/8, and General Motors dropped 1 3/8 to 43. Chrysler Corp., which announced a plant closure Friday and a major realignment of marketing operations Monday, fell 1 1/8 to 19 7/8.
Philip Morris lost 1 3/8 to 40 3/4 partly because of a negative report by Merrill Lynch.
Chevron suffered a steep 4-point drop to 64 5/8 as speculation about a possible takeover or restructuring waned after weeks of heavy trading activity. No suitor has emerged, and Chairman Kenneth T. Derr issued a statement Friday arguing that the company was taking steps to bolster shareholder value.
Computer and high-tech stocks fell generally on expectations of lower sales, with International Business Machines dropping 1 7/8 to 96 5/8. Among issues that defied the market trend, Compaq Computer rose 3/4 to 89 1/4 after unveiling its new line of desktop computer systems.
Ryder System gained 1 1/4 to 22 3/4 after Itel said it would buy at least $15 million worth of the company's shares. Itel stock fell 3/8 to 21 1/4.
Other indexes besides the Dow fell Monday. The New York Stock Exchange's composite index was down 2.51 points to 184.77, the American Stock Exchange index fell 3.11 to 368.68 and the NASDAQ index of over-the-counter stocks dropped 4.95 to 448.02.
Standard & Poor's 500 index was off 5.01 points at 332.61. The Wilshire index of 5,000 equities closed at 3,260.746, down 42.877 from Friday.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,736, compared to 2,777 in the previous session.
In Tokyo, stocks eased in modest trading as major players were sidelined by talk that the Bank of Japan may raise a key official interest rate, brokers said. The Nikkei average lost 60.86 points to close at 35,434.00.
In London, prices ended mixed to down after an early 20-point gain failed to hold, dealers said. The Financial Times-Stock Exchange 100-share index ended 3.5 points down at 2,169.6.