Dow Gives Up 17.89 on Weak Economic Data : Market Overview

* Bond yields dropped anew on signs that the economy is weakening further.

* Blue chip stocks continued to lose ground after an anemic third-quarter GDP report. The Dow Jones industrial average shed 17.89 points to 2,911.67, largely because of drops in a few key stocks.

Stocks

The third-quarter gross domestic product report--revised to a mere 1.7% growth rate--caused some traders to refocus on the chance of a double-dip recession, analysts said.

The economic gloom was also deepened by the release of a Federal Reserve survey showing “flagging momentum in the economic recovery in October and early November.”

“It shows there’s nothing exciting coming in terms of a turnaround to rapid growth that would justify the current level of the stock market,” said Christopher Pederson, director of trading at Twenty-First Securities.

Wall Street’s bears, however, continue to be exasperated by the market’s ability to hold up so well even with so much bad news. On Wednesday, losing issues outnumbered winners 844 to 756 on the New York Stock Exchange, but that was hardly the kind of margin analysts expected given the threat of a new recession.

Trading volume remained moderate, at 187.96 million shares on the Big Board, up slightly from Tuesday’s 187.25 million.

The market remains a tug of war between investors who are bailing from stocks that have been wounded by the weak economy--such as auto and oil issues--and investors who still find attractive stocks in such fields as health care. Smaller stocks also find favor: The NASDAQ composite index rose 1.94 points to 535.28.

Among the highlights:

* The Dow was torpedoed by Boeing, which plunged 3 1/8 to a new 1991 low of 41 3/8. The company’s chief executive said Boeing won’t be able to sustain planned jet production levels if the faltering airline industry doesn’t improve.

Among the airlines themselves, UAL (United’s parent) slid 2 7/8 to 125 1/8 after projecting a record fourth-quarter loss because of weak traffic. AMR (American’s parent) lost 3/4 to 60 1/8, and Delta dropped 1 3/8 to 59 3/8.

But on a day that saw the death of Pan Am, some investors were buying what they apparently believe will be survivors in the troubled airline business. USAir jumped 3/4 to 11 1/4, and Southwest added 7/8 to 30 3/4.

* Among auto makers, GM slipped 1/4 to 29 7/8, a new 1991 low, despite reporting higher late-November car sales. Ford slid 5/8 to 24, and Chrysler eased 1/8 to 11 7/8.

* Some drug stocks renewed their rise. American Home Products gained 2 5/8 to 78 3/4 after analysts raised earnings estimates. Other winners included Pfizer, up 1 to 69 1/8; Amgen, up 1 1/4 to 59, and Genzyme, up 1 7/8 to 48 7/8.

Elsewhere in the health-care field, infusion therapy firm T2 Medical jumped 3 3/4 to 48 3/4 after analysts said they expect continued steady earnings growth.

* Among Southland stocks, Carson-based lamp and fan maker Dynasty Classics plummeted 2 3/4 to 4 1/2. It projected a fourth-quarter loss because November orders were “substantially” below what was expected. The company blamed the weak retail market, although it said it still expects to be profitable for the full year.

L.A.-based Whittaker jumped 3/4 to 10 1/8, one day after spinning off its biotech unit. The aerospace firm told analysts it earned more than the $1.65 a share that Wall Street estimated for the year ended last Oct. 31. Results will be reported next week. Meanwhile, Biowhittaker gained 1/8 to 9 1/2. It said earnings in the year ended Oct. 31 may be less than the 37 cents a share some analysts forecast.

Overseas, Tokyo stocks stretched a technical rebound to a second day to close sharply higher. The Nikkei average soared 502.61 points, or 2.3%, to 22,669.44.

Positive corporate earnings and scattered investor interest helped push stock prices higher in Frankfurt. The DAX average rose 14.12 points to 1,560.96. In London, the Financial Times 100-share average rose 3.6 points to 2,423.8.

Credit

The yield on 30-year Treasury bonds fell to 7.85% from 7.90% Tuesday, as the price rose 9/16 point, or $5.63 per $1,000. Yields on shorter-term bonds also slid.

New signs of economic weakness convinced more bond traders that interest rates are virtually certain to go lower in the near term.

Steven R. Ricchiuto, economist at Barclays de Zoete Wedd, said many bond traders believe that the Fed will ease rates as early as Friday, after the release of unemployment figures for November.

The fed funds rate, the rate on overnight loans between banks, was 4.50% versus 4.688% Tuesday.

Currency

The dollar ended weaker against major foreign currencies on the weak economic reports.

The dollar fell in New York to 1.602 German marks, down from Tuesday’s 1.608, and to 129.10 Japanese yen, down from 129.30.

Commodities

Coffee futures fell sharply after Brazil said it would be up to the factionalized private sector to develop a price support plan.

Coffee for March delivery tumbled 2.65 cents to 82.55 cents a pound on New York’s Coffee, Sugar and Cocoa Exchange, erasing most of the gains accumulated over the four previous sessions.

Elsewhere, oil futures rallied on the New York Merc after Tuesday’s 57-cent selloff. Light sweet crude for January rebounded 25 cents to $20.76 a barrel.

December gold rose $1.60 to $365.10 an ounce on New York’s Comex; silver fell 0.2 cent to $4.

Market Roundup, D8