Dow Off 26 as Missile Hits Tel Aviv

The stock market declined today as nervous investors reacted to word that Iraq had launched another missile attack at Israel.

The Dow Jones industral average closed down 25.99 points at 2,603.22. In the broader market, however, advancing stocks were ahead of decliners by a narrow 8-7 margin. Volume on the New York Stock Exchange was a moderately active 175.59 million shares.

Stocks fell as Iraq landed at least one missile in Israel, injuring up to 60 people. The increased risk of a broader war sent oil climbing more than $2 a barrel on the New York Mercantile Exchange.

Stock prices had seesawed on the opening bell before moving decisively lower in the face of higher oil prices and reports that Iraq had set fire to Kuwaiti oilfields. Analysts also said television images of battered American POWs had a psychologically unsettling effect on investors.

Prices dipped sharply in the afternoon on reports that air-raid sirens were sounding in Israel.

Some individual issues were faring well.

Banking stocks were lifted by a report that Wells Fargo & Co. and Security Pacific Corp. held private talks to discuss a merger that would create the nation’s second largest bank holding company. If a deal is consumated, it might encourage other large, faltering banks to follow suit.

Security Pacific jumped 1 7/8 to 20 3/4.