‘Witching Hour’: Dow Off 5.94

Stock prices lost ground today in activity swollen by a quarterly “triple witching hour.”

The Dow Jones industrial average fell 5.94 points to close at 2,512.38.

Declining issues outnumbered advances by about 3 to 2 on the New York Stock Exchange, with 602 up, 920 down and 464 unchanged.

Big Board volume totaled 201.05 million shares, against 145.10 million in the previous session.

The NYSE’s composite index slipped .19 to 171.03.

Investors remained anxious about the Middle East crisis, higher energy prices and lack of a U.S. budget agreement.

Today marked the last trading in a series of options and futures on stock indexes, contracts which are used by professionals engaged in multiple computer-program strategies that also involve individual stocks.

Analysts said the turbulence generated by the witching hour made it difficult to draw many conclusions from the market’s fluctuations.

But most observers agreed that little had happened to dispel the fears of recession and inflation that have been depressing stock prices since early summer.

The market experienced a brief selloff at midafternoon when Chase Manhattan Corp. announced plans to reduce its dividend and take big charges for restructuring and possible losses on loans. But prices began recovering soon afterward.

Another increase in energy prices sent the bond market falling in quiet early trading today.

The Treasury’s bellwether 30-year bond fell 9/32 point, or about $2.81 per $1,000 face amount. Its yield, which rises when the price falls, advanced to 9.06% from 9.03% late Thursday.

Rising prices for crude oil heightened the bond market’s concerns about inflation. The near-term price for light, sweet crude was up $1.48 to $34.90 a barrel on the New York Mercantile Exchange in late morning.

Inflation carries a double threat for bonds: It erodes their value, and it also lessens the likelihood that the Federal Reserve will allow interest rates to fall.

Bond traders have been hoping the Fed would nudge rates lower because that would move bond prices higher. But the surge in oil prices since the Aug. 2 Iraqi invasion of Kuwait has dampened those hopes.

Volume was light today as many traders took the day off for Rosh Hashanah, the Jewish new year.

Short-term Treasury bonds fared better than long-term issues today, as is often the case when the market is concerned about inflation. Since money is tied up longer in 30-year bonds, inflation poses a bigger threat than it does to shorter maturities.

Short-term Treasuries were unchanged today, intermediate maturities ranged from 1/32 point to 1/8 point lower and long-term issues lost 7/32 point to 9/32 point, according to Telerate Inc., a financial information service.