Mideast Fears Put Stocks Into Worldwide Dive : Markets: Tokyo’s exchange plunged 5.8%, the fourth-biggest one-day drop in history; the Dow fell 3%. Oil prices skyrocketed too.

Fearing that a Mideast war would cause economic chaos for much of the industrialized world, investors continued to bail out of stock markets from New York to Singapore on Thursday, sending prices on nearly every major exchange to their lowest levels in at least a year.

The Dow Jones industrial average plunged 76.73 points, or 3%, to close at 2,483.42--the lowest close since July, 1989. But the selloff was nothing compared to the rout in Tokyo’s market, where the value of the Nikkei stock index fell 5.8%--the fourth-biggest one-day drop in history.

Fears of war in the Mideast also sent oil prices rocketing. The price of the benchmark U.S. crude rose 71 cents Thursday in New York to $31.93 a barrel, the highest level in seven years.

Meanwhile, long-term interest rates soared anew as investors dumped bonds.

“At some point, everyone (in the stock market) rushes for the exit, and some people get trampled,” said Michael Metz, market strategist at Oppenheimer & Co. in New York.

By the end of the day, U.S. stocks were worth $95 billion less than they had been the day before. Share values have slid by more than $500 billion since July, when prices peaked, according to Wilshire Associates, a Los Angeles firm that tracks the value of shares traded on the nation’s largest exchanges.

The rise in oil prices was a major factor in the stock selloff. Investors believe that petroleum production in Saudi Arabia and other Mideast nations could be abruptly curtailed if war breaks out between the United States and Iraq. That would send oil prices and inflation soaring, which could cause economic problems in any nation that depends on petroleum imports.

Fears of such a scenario rippled through market after market Thursday. In Frankfurt, the DAX 30-stock index fell 3.5%, and, in London, the value of the FT-SE 100-stock index slid 1.4%. The Paris CAC 40-stock index closed down 2.1% and the Hong Kong market tumbled 2.9%.

The Japanese market’s plunge took the Nikkei average of 225 stocks down 1,473.28, to close at 23,737.63. The Nikkei had not been below 24,000 since February, 1988.

In early Friday trading, Japanese stocks turned up, rising 607.62 on the Nikkei, on reports of Iraqi troop pullbacks. But analysts said the bargain-hunting was unlikely to last.

The continuing drop of stock prices in the United States prompted some U.S. firms to announce plans to buy back some of their shares. Fannie Mae, the government-sponsored, publicly held firm that buys mortgages from lenders, announced plans for a buyback, as did Intel Corp., the big computer chip maker.

U.S. market analysts said investors have become increasingly hesitant to hold stocks because many believe that a war with Iraq is imminent. “There were no peaceful sounds yesterday,” said Michael Sherman, chief investment strategist at Shearson Lehman Bros. in New York.

Although war always makes investors nervous, a war in the Middle East is particularly worrisome because it would probably affect worldwide oil supplies and prices. Rising oil prices fuel inflation.

The Federal Reserve is expected to cut interest rates sometime later this year to help spur the weak economy. But it is believed to have delayed rate cuts because of fears of oil-driven inflation, and some analysts believe that the central bank may continue to delay further easing for some weeks.

Volume on the New York Stock Exchange was heavy, with 250.4 million shares changing hands, compared to 175.5 million Wednesday. Only 148 stocks advanced, while 1,643 fell.

Investors sold virtually everything they could, including the oil and gold stocks that had rallied in recent weeks on the Mideast crisis. Blue-chip losers included Boeing, off $2.50 to $42.50; IBM, off $2.125 to $96.875; Procter & Gamble, off $3 to $71.125, and Exxon, off $1.75 to $49.625.

The broader measures of stock market performance also declined steeply. The NYSE Composite index fell 5.34 to 168.88, a 3% loss. The NASDAQ Composite index of over-the-counter stocks plummetted 14.62 to 360.22, down 3.9%.