Rally Fizzles; Dow Plunges 43.81 Points

From Associated Press

Stock prices tumbled again today after an early attempt to rally fizzled out.

The Dow Jones average of 30 industrials, up about 15 points in early trading, fell 43.81 points to 2,560.15, extending its loss since July 17 to 439.60 points, or 14.65%.

Declining issues swamped advances by more than 3 to 1 on the New York Stock Exchange, with 360 up, 1,202 down and 426 unchanged.

Big Board volume totaled 175.55 million shares, against 194.63 million in the previous session.

The NYSE's composite index dropped 2.72 to 174.22.

The fallout from the showdown in the Middle East continued to spread through world markets as the session progressed.

Stocks have attracted a few sporadic buyers in recent days, apparently spurred by hopes that the markets might have gone to extremes in their appraisal of the potential ripple effects of Iraq's invasion of Kuwait.

But a good many analysts questioned whether the market has fully adjusted to the increased recession risks arising from the situation in the Middle East.

Stock markets in other financial centers around the world remain on the defensive amid fears of increased inflationary pressures and higher interest rates.

The price of oil, which hovered around $16 a barrel at the start of the summer, climbed past $30.

Prompted by such developments as the sharp rise in oil prices, Wall Streeters have curtailed their hopes for a recovery any time soon in U.S. corporate profits.

Bond prices slipped in early trading today as oil prices continued to climb, heightening inflationary concerns.

The Treasury's benchmark 30-year bond fell 7/16 point, or $4.38 per $1,000 face amount, while its yield, which rises when prices fall, rose to 8.98% from 8.94% late Tuesday.

"It's the same old story--oil up, bonds down," said Mike Geraty, a government bond trader with Clayton Brown & Associates in Chicago.

He said there was little other news to affect trading, which he described as sluggish.

In the secondary market for Treasury bonds, prices of short-term governments were unchanged to 5/32 point lower, intermediate maturities fell 7/32 point to 5/16 point, and long-term issues were down as much as 7/16 point, according to Telerate Inc., a financial information service.

The Shearson Lehman Brothers daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 1.19 to 1,142.14.

Yields on three-month Treasury bills fell to 7.80% as the discount fell 2 basis points to 7.55%. Yields on six-month bills fell to 7.85% as the discount fell 1 basis point to 7.46%. Yields on one-year bills rose to 7.88% as the discount rose 1 basis point to 7.37%.

The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 7 15/16%, up from 7 7/8% late Tuesday.

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