STOCKS : Dow Falls 33.49 in Late Selloff to 8-Week Low

Stock prices fell to an eight-week low Wednesday under a barrage of late selling attributed to disappointing economic and earnings news.

The Dow Jones index of 30 industrials dropped 33.49 to 2,659.13, its lowest close since it stood at 2,656.78 on Nov. 22.

Since the index hit a record closing high of 2,810.15 in the first session of 1990 on Jan. 2, it has retreated 153.37 points, or 5.46%.

Declining issues outnumbered advances in nationwide trading of New York Stock Exchange-listed stocks, with 649 up, 867 down and 462 unchanged.

Analysts said a widening of the U.S. trade deficit to $10.5 billion in November from $10.25 billion in October caught some market participants off guard. A separate government report on industrial production seemed to signal that manufacturing remained sluggish.

Brokers also said earnings reports from International Business Machines and Alcoa provided little assurance for investors who have been waiting uneasily for fourth-quarter profit figures.

IBM, which said its fourth-quarter earnings shrank to $1.04 a share from $3.97 a share in the like period a year earlier, dropped 1 1/4 to 98 7/8.

Aluminum Co. of America, another component of the Dow, fell 5 7/8 to 66 7/8 after the company came in with lower quarterly profits.

Alcoa’s news appeared to drag down other basic industry stocks as well. Phelps Dodge dropped 7/8 to 59; International Paper fell 3/8 to 52 1/8; Dow Chemical slipped 1 3/8 to 67 7/8, and DuPont fell 1 5/8 to 121 5/8.

Caterpillar Inc., which is expected to post its results for the fourth quarter Thursday, lost 2 1/8 to 54 7/8.

Aristech Chemical was the volume leader, up 1/2 at 25 1/8. A management-led group has proposed a buyout for $26 a share.

Big Board volume totaled 170.47 million shares, down from Tuesday’s 186.07 million.

In Tokyo, late selling erased gains of more than 400 points to leave the Nikkei average slightly lower. The 225-share Nikkei slipped 29.22 points to end at 36,821.14 after plunging 666.41 Tuesday.

A late rally carried share prices to a modest gain for the session on the London Stock Exchange. The Financial Times 100-share index rose 24.8 points, or 1.1%, to close at 2,373.9.

CREDIT Bonds Close Mixed After Early Gains Bond prices finished mixed following Tuesday’s sharp selloff. Prices of shorter-term issues rose slightly, while longer-term bonds slipped.

The Treasury’s closely watched 30-year bond declined 1/8 point, or $1.25 for every $1,000 in face value. The bond’s yield, which rises when its price falls, edged up to 8.25% from 8.24% late Tuesday.

Analysts said bond prices started the day by recovering, buoyed by a bout of bargain-hunting and the government’s report on the U.S. trade deficit. Later, however, bond prices lost much of their early gains.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8.188%, up from 8.125% late Tuesday.

CURRENCY Dollar Trips Over Poor Trade Report The unexpected widening of the U.S. trade deficit sent the dollar falling against most foreign currencies Wednesday.

Foreign exchange dealers said investors were concerned because the poor trade performance in November was partly due to a drop in exports. Some analysts believed that the decline indicated a further slowing of the U.S. economy.

Ronald Holzer, chief foreign exchange dealer with Harris Trust & Co. in Chicago, said any possible upward moves by the dollar were being limited by traders’ skeptical view of the economy. However, he said, the U.S. currency was “beginning to base at these levels.”

Although the trade news pushed the dollar lower, foreign exchange traders largely focused on the West German mark and other currencies, Holzer said.

Overseas dealers said continuing tensions in the Soviet Union and Eastern Europe gave the dollar some underlying support.

The dollar did manage a gain against the British pound. In London, one pound cost $1.6525 late Wednesday, cheaper than late Tuesday’s $1.6560. In later New York trading, the pound was quoted at $1.65235, down from $1.6585 late Tuesday.

In Tokyo, the dollar closed at 145.52 Japanese yen, down from 145.75 yen Tuesday. In London, the dollar closed at 145.45 yen, and in New York, it rose to 145.395 yen from late Tuesday’s 145.30 yen.

Gold prices were mixed. On the Commodity Exchange in New York, gold rose $1.70 to $412.50 an ounce. Republic National Bank of New York later quoted a bid of $412.90, up $3.10 from late Tuesday.

COMMODITIES Oil Prices Plummet as Supplies Increase Oil and gasoline futures prices plummeted after an industry report showed an increase in U.S. stocks of petroleum products after several weeks of declining supplies.

On other commodity markets, precious metals futures rose, livestock and meat futures were higher, and grains and soybeans were mixed.

West Texas Intermediate crude oil settled 68 cents lower to 4 cents higher, with the contract for delivery in February at $22.10 a barrel; heating oil was 0.60 cent to 3.51 cents lower, with February at 60.52 cents a gallon, and unleaded gasoline was 1.45 to 2.88 cents lower, with February at 61.42 cents a gallon.