Futures Selling Puts a Drag on Market; Dow Tumbles 43.46

Stock prices ended sharply lower Thursday as a last-hour flurry of futures-related selling toppled a market already pessimistic about interest rates and corporate earnings.

The Dow Jones index of 30 industrials dropped 43.46 to 2,561.04, closing for the first time below the 2,569.26 level that it hit last Oct. 13 in a severe but short-lived selloff.

Declining issues outnumbered advances in nationwide trading of New York Stock Exchange-listed stocks, with 539 up, 937 down and 474 unchanged.

Big Board volume totaled 172.27 million shares, down from 207.83 million Wednesday.

Traders said few investors were in a hurry to commit funds as disappointing earnings reports continued to roll in.

Buyers had also pulled back before fourth-quarter gross national product data due today. “No one wants to be a hero,” said Dillon Read & Co. head trader Daniel Williams.

Economists say the GNP, the nation’s total output of goods and services, expanded in the period but at a much slower rate than in the third quarter.

Prices rose on the Japanese stock market after a series of recent selloffs that had unsettled other markets around the world.

But brokers said that apparently wasn’t enough to allay fears that the risks of a persistent slump in economic growth and corporate profits were increasing.

Bargain hunting caused stocks to rise in early trading, but it was not sustained.

Gruntal & Co.’s director of technical research, Gene Jay Seagle, believes that the lack of buying is fostering the market’s decline.

“There’s no foreign interest, so we’re getting very decided selling in stocks like International Business Machines, Minnesota Mining & Manufacturing and Procter & Gamble,” Seagle said.

“That’s a key area, and that shows up very quickly in this market.” The dearth of interest, combined with thin volume, makes the market more vulnerable to program trading, he said.

Interest rates reversed an early decline and extended their recent rise Thursday in the market for U.S. Treasury securities.

In addition, more blue chip companies came in with fourth-quarter earnings reports that disappointed investors.

DuPont ranked among the volume leaders, down 2 at 37 3/8. On Wednesday, the company reported fourth-quarter earnings of 71 cents a share, barely topping the 70 cents a share that it posted a year ago. Seagram Co., which owns a large stake in DuPont, tumbled 6 3/8 to 76 1/8.

Procter & Gamble, which also posted virtually flat quarterly profit, fell 3 1/2 to 62 3/4.

Other losers among the blue chips included International Business Machines, down 1 5/8 at 95 7/8; Philip Morris, down 1 at 37; Exxon, down 1 at 46; General Electric, down 1 1/4 at 62, and American Express, down 3/4 at 29 7/8.

Single-country investment companies provided some conspicuous exceptions to the downtrend. Taiwan Fund gained 7/8 to 50 1/8; Italy Fund rose 1 to 18; Korea Fund added 2 3/4 to 33 5/8, and Germany Fund rose 1 1/8 to 22 1/2.

The latest entry in that increasingly crowded field, the New Germany Fund, soared to 22 in its first day of trading, from an offering price of 15.

The average share on the New York Stock Exchange was down 38 cents. The NYSE Composite index of all listed common stocks fell 2.03 to 180.61. The Standard & Poor’s composite index of 500 stocks fell 4.18 to 326.08.

The American Stock Exchange index fell 1.03 to 353.64; the NASDAQ over-the-counter index was down 0.42 to 425.24.

In Tokyo, share prices recovered partly from Wednesday’s 600-point drop but the market remained jittery. The 225-share Nikkei average rose 190.13 to 36,969.11.

In London, shares ended firmer but below the day’s highs after Wall Street lost its early gains. The Financial Times 100-share index closed up 11.3 at 2,289.9.