Late Selling Sparks 5th Loss; Dow Drops 12.17

Stock prices fell today for the fifth straight session as a late round of computer-triggered selling wiped out initial gains.

The Dow Jones average of 30 industrials fell 12.17 to 2,654.50.

Losing issues outnumbered gainers by about 4 to 3 on the New York Stock Exchange, with 818 down, 638 up and 521 unchanged.

Big Board volume totaled 137.36 million shares, against 135.15 million in the previous session.

The NYSE’s composite index slipped 0.42 to 181.51.

At the American Stock Exchange, the market value index fell 1.06 to 343.89.

The market advanced on the opening, boosted by rising bond prices. Stocks appeared to mirror the seesawing of the credit market for much of the session and struggled to hold on to gains once bonds came under pressure.

Government bonds yielding close to 9% proved an attractive alternative to equities. But some analysts noted that with a substantial amount of cash on the sidelines, investors were not forced to sell stocks to buy bonds.

Trading was moderate.

Alfred E. Goldman, a vice president at A. G. Edwards & Sons Inc. in St. Louis, called the market’s performance “a little disappointing because it tried to go up--both the generals and the troops.”

He was encouraged that although bond prices fell, they were down only fractionally and the market seemed to be stabilizing.

Stocks recently have been taking their cue from bond prices, which fall when interest rates rise. Higher interest rates lower stock valuations and make corporate borrowing more expensive.

Bond prices were recovering in early trading today as some investors moved to buy securities at cheap levels.

The Treasury’s closely watched 30-year bond was up 1/4 point, or $2.50 for every $1,000 in face value, at around midday. Its yield, which falls when the price rises, declined to 8.93% from 8.96% late Monday.

By Monday, the 30-year bond had plunged more than $41 per $1,000 over the previous seven trading days in response to signs of increasing inflation.