STOCKS : Closing Selloff Sends Dow Down 10.81

The stock market finished lower for the second straight session Wednesday, pressured by weakness in the bond market, profit taking in the last hour of trading and an uncertain earnings outlook for a broad range of U.S. companies.

The Dow Jones index of 30 industrials fell 10.81 to 2,727.93.

Declining issues outnumbered advancing ones in nationwide trading of New York Stock Exchange-listed stocks, with 870 down, 582 up and 513 unchanged.

Big Board volume totaled a weak 130.99 million shares, down from Tuesday’s 177.32 million.

Stocks were mixed through most of the lackluster session, and the bulk of the loss occurred just before the closing bell.

The Dow had been up 3.60 points at mid-session, and stocks remained in positive territory until the final hour of trading, when they quickly headed south.

“It’s mainly the lack of volume. The buying power is just not there,” said William Raftery, a technical analyst at Smith Barney, Harris Upham & Co.

“I think the relatively low volume we’ve seen over the past couple of days is probably something that we can look forward to over the next couple of weeks,” added Bradley Turner, chairman of McDonald & Co.’s investment policy committee.

Buyers found few reasons to be aggressive, especially in light of the lack of news that could push the market one way or another.

Brokers attributed the decline partly to profit takers worried about the endurance of the market’s recent strength, particularly in the face of stunning weakness in the other major world stock market, Japan.

Analysts also said first-quarter earnings of many U.S. companies, due early next month, could show worse-than-expected results that would depress the value of American stocks.

One of the few compelling events was a slide in the bond market, where the 30-year U.S. Treasury bond lost 3/8 point, or $3.75 for every $1,000 in face amount.

Chase Manhattan Bank was the most active NYSE stock, down 1/8 to 27 1/8 on more than 1.3 million shares traded.

Among other banks, Citicorp rose 1/4 to 24 and Security Pacific eased 1/2 to 36 3/8. Shawmut National, which restated earnings and lifted reserves to cover bad real estate loans, gained 1/4 to 14 7/8. Bank of New England shed 1/8 to 5.

In London, prices fell in a lackluster session with investors uncertain about the implications of Britain’s new budget. The Financial Times 100-share index was down 9.4 to 2,250.3 at the close.

CREDIT Bonds Pull Back on News of Deficit Hike Bond prices retreated after the government reported a wider-than-expected increase in the budget deficit in February.

Analysts said the $36.42-billion budget gap raises the prospect that the Treasury may have to borrow more than expected over the coming months.

They said profit taking after a three-day rally also contributed to the pullback in bond prices.

The market’s benchmark 30-year Treasury bond dropped 3/8 point, or $3.75 for every $1,000 in face amount. The bond had risen about $20 for every $1,000 in face value over the past three sessions.

Its yield, which rises when prices fall, edged up to 8.49% from 8.45% late Tuesday.

The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.438%, up from 8.188% Tuesday.

CURRENCY Dollar Is Mixed on Slow Trading Day The dollar finished mixed against major currencies in slow trading. Buying of dollars as a safe investment haven lent some strength to the U.S. currency.

Gold prices posted minor declines in domestic dealings after much larger losses overseas.

On New York’s Commodity Exchange, gold for March delivery settled at $391.80 an ounce, 40 cents lower than Tuesday. Later, Republic National Bank of New York quoted a bid of $391.90 for an ounce of gold, 50 cents lower than Tuesday’s late bid.

Foreign exchange dealers said the dollar drifted steadily higher against certain foreign currencies in part because of escalating tensions in Lithuania, which declared its independence from the Soviet Union on March 11.

COMMODITIES Strike Fears Push Copper Prices Up Prices of copper futures surged to new five-month highs on New York’s Commodity Exchange on speculation that union workers at a large Canadian smelter would reject a management contract offer, setting the stage for a strike.

On other commodity markets, precious metals were mixed; petroleum futures advanced; grains and soybeans were mostly lower, and livestock and meat futures were mixed.

Copper futures settled 1.05 to 4.6 cents higher in New York, with the contract for delivery in March at $1.326 a pound, the highest near-month copper price since Oct. 13.

About 700 workers at Noranda Inc.’s Horne copper smelter near Rouyn, Quebec, began voting on management’s final contract offer Wednesday afternoon, the company said. Results of the voting were not expected until today.