STOCKS : Late Selling Sinks Market; Dow Falls 28

A late burst of program selling sent prices into a broad decline on Wall Street on Tuesday, capping an otherwise lackluster session.

Stocks had meandered lower for much of the day in the absence of any news to stimulate trading, but computerized sell orders in the last half-hour increased the market’s losses.

The Dow Jones index of 30 industrials fell 28.37 to 2,766.00, wiping out a more than 21-point gain the previous session that was also largely attributed to program trading.

Declining issues outnumbered advancing ones in nationwide trading of New York Stock Exchange-listed stocks, with 565 up, 959 down and 461 unchanged.

Big Board volume totaled 155.21 million shares, up from Monday’s 140.11 million.

Analysts said the market lacked the support necessary to sustain Monday’s moderate gains, which followed the major banks’ lowering of their prime lending rates to 10% from 10.5%.

Traders were unable to look to any economic indicators for guidance. The next scheduled government reports are December producer prices and retail sales, both to be announced on Friday.

Analysts said many traders were also waiting for companies’ fourth-quarter earnings to be announced before making any major commitments.

“They’re waiting for numbers or some sign that the market’s going to make a sustained move in either direction,” said Michael Metz, an analyst with Oppenheimer & Co.

He described the market as having “no sense of urgency.”

One standout in Tuesday’s trading was UAL, which shot up 7 3/8 to 164 after the parent of United Airlines said it was considering a recapitalization.

Bristol-Myers Squibb fell 7/8 to 55 1/2. The company announced it is taking fourth-quarter charges totaling about $690 million after taxes as it continues the process of combining two big pharmaceutical companies.

The most actively traded issue on the NYSE was Pan Am, which rose 1/8 to 3 5/8.

Among blue chip issues, General Electric fell 1 3/8 to 64 5/8, AT&T; was off 1/2 at 45 1/4 and Exxon was off 1 at 48 1/2.

Prices on the Tokyo Stock Exchange plummeted in slow trading. The Nikkei 225-share index lost 343.50 to close at 37,951.46.

Shares ended slightly higher on London’s Stock Exchange in quiet trading. The Financial Times 100-share index rose 5.0 points at 2,436.3.

CREDIT Bond Prices Steady After Rally Fizzles Bond prices finished unchanged to slightly lower after a rebound inspired by a rising dollar ran out of steam.

The Treasury’s closely watched 30-year bond slipped 1/16 point, or 62 cents for every $1,000 in face value. Its yield was unchanged from late Monday at 8.09%.

Analysts said bond prices were buoyed in the morning by a rally in the dollar and some buying by Japanese investors. A strong U.S. currency makes dollar-denominated assets such as bonds more valuable.

“That gave prices a little bit of a lift,” said William V. Sullivan, director of money market research at Dean Witter Reynolds Inc.

But bonds later gave back their gains when the dollar lost ground against foreign currencies, he said.

In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose 1/16 point to 92 31/32. The average yield to maturity was unchanged from late Monday at 7.29%.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8.188%, down from 8.25% late Monday.

CURRENCY Dollar Ends Mixed in Erratic Trading The dollar ended mixed against key foreign currencies in active, choppy trading.

Gold gained in New York after falling in Europe and strengthening in Asia.

On the Commodity Exchange in New York, gold bullion for current delivery settled at $404.20 an ounce, up $1.20. Republic National Bank of New York quoted a late bid for gold at $405.60, up $3.80.

Robert Ryan, a currency trader with Bank of New York, said the dollar started out sharply higher amid concerns that ethnic unrest in some of the Soviet Union’s republics would force Mikhail S. Gorbachev to resign.

But it moved off its highs for the day on profit taking and other technical factors, he said.

The dollar is often seen as a safe haven for investors in times of political instability.

Dealers said the dollar also gained some support from comments by the West German central bank president, Karl Otto Poehl, that there would be no further realignment of exchange rates within European currencies.

Italy devalued the lira on Friday within the European Monetary System, and traders said more realignments would have further strengthened the West German mark to the detriment of the dollar.

In Tokyo, where trading ends before Europe’s business day begins, the dollar rose to 144.97 Japanese yen from 144.52 yen Monday. It traded at 145.20 yen in London, and at 144.92 yen in New York, up from 144.15 yen.

The dollar was weaker against the British pound. Sterling cost $1.6540 in London, up from Monday’s $1.6530, and $1.6585 in New York, up from $1.6535.

COMMODITIES Energy Futures Prices Get Hot Energy futures prices climbed on the New York Mercantile Exchange in trading that saw heating oil prices swing wildly before finishing with a modest gain.

On other markets, soybeans were higher while grains fell; livestock futures were mostly lower and pork futures mixed, and precious metals were mixed.

West Texas Intermediate crude oil settled 16 to 45 cents higher, with the contract for delivery in February at $22.07 cents a barrel. Heating oil was 0.45 to 0.72 cent higher, with February at 65.05 cents a gallon. Unleaded gasoline was 1 cent to 2.4 cents higher, with February at 60.88 cents a gallon.

Analyst Bob Baker of Prudential-Bache Securities Inc. in New York said heating oil futures were up about 250 points before turning negative and then closing with a modest gain.

Meanwhile, gasoline prices climbed steadily to post a strong gain.

Baker attributed the volatility in the heating oil market to speculative trading and the entrance of bargain hunters.

Expectations that the American Petroleum Institute’s weekly inventory data would show a decline in distillate and gasoline stocks helped boost prices.

After the close of trading, the API released data showing gasoline stocks were down 6.4 million barrels and distillate stocks down 423,000 barrels. Crude oil stocks were up 418,000 barrels.

Tuesday’s trading reversed three days of selling spurred by easing concern over cold weather and reports OPEC production surged beyond the levels set last year by the Organization of Petroleum Exporting Countries.

Grain futures prices closed lower and soybeans were higher in quiet trading on the Chicago Board of Trade.

The action in the wheat pit was disappointing because the Soviet Union did not reappear in the market after making an overnight purchase of 480,000 metric tons of wheat, said analyst Dale Gustafson of Drexel Burnham Lambert Inc. in Chicago.

The National Weather Service’s six- to 10-day forecast, released Monday, also dragged down wheat prices. The forecast called for improved chances of rain in hard red winter wheat growing areas.

Corn prices fell due to slack demand, with analysts noting that commercial houses were on both sides of the market and for small amounts.

Soybean futures were higher as the transportation problems created by December’s cold weather cleared up. A lack of additional export business and overnight selling by farmers weighed on prices, analysts said.

Wheat was 1 3/4 to 3 1/4 cents lower, with March at $4.0675 a bushel; corn was 1 cent lower to 0.25 cent higher, with March at $2.3875 a bushel; oats were a 0.75 cent to 1.25 cents lower, with March at $1.495 a bushel, and soybeans were 0.75 cent lower to 2 cents higher, with January at $5.705 a bushel.