Rising Interest Rates Spur a Broad Selloff : Markets: Investment advisers continue to turn bearish on stocks. Bond yields maintain their upward trend.

Few stocks escaped the broad selloff in the market Wednesday, as investors were spooked by rising interest rates and more big investment advisers turned bearish.

Declining shares swamped advances by a huge margin, and all indexes took huge hits. “This is about as ugly as it has been for a long, long time,” said Bob Walberg, market analyst at MMS International.

At least four leading Wall Street firms have turned bearish, raising their cash levels to cut back on stocks.

Smith Barney Shearson started the shift Tuesday with a boost in its recommended cash allocation to 25% from 15%, cutting stocks to 50% from 55% and bonds to 25% from 30%. Dean Witter Reynolds and NatWest Securities took similar actions Wednesday.

Also Lehman Bros.’ influential market analyst Elaine Garzarelli, who won a wide following after predicting the 1987 stock market crash, lowered her composite stock indicator to 47% from 57.5%, a level she said is considered neutral. A reading of 30% or under is viewed as a sell signal.

“Investors are translating that negative talking into negative action and doing some selling,” said Marshall Acuff, portfolio strategist at Smith Barney Shearson.

The Dow Jones average tumbled 72.27 points to 3,626.75, the lowest level since Nov. 4.

“Selling is across the board, no company is escaping,” said David Holt, director of technical research at Wedbush Morgan Securities.

Declining issues swamped advances by about 6 to 1 on the NYSE. Volume on the floor of the Big Board totaled an extremely heavy 390.52 million shares, up from 301.63 million on Tuesday.

At the same time, 402 New York Stock Exchange stocks hit new lows for a 52-week period, while only four issues reached new highs.

Among other major market indicators, the Standard & Poor’s index of 500 stocks lost 6.93 to 445.55, while the Nasdaq composite index of mostly smaller issues, dropped 10.38 to 744.91.

The bellwether 30-year Treasury bond yield rose to 7.10% from Tuesday’s 7.06%, while its prices sank 1/2 point, or $5 per $1,000 face value. Yields on short-term Treasury bills, however, receded slightly.

Long-term interest rates, used to set borrowing costs, are seen as the biggest culprit behind the recent market slide, which began after the Federal Reserve tightened credit on Feb. 4 for the first time in five years.

The trend accelerated last week after the Fed raised interest rates for the second time. The fear is that the rising cost of credit will choke off the economic recovery and constrain profit growth.

Selling in the bond market was less intense than Tuesday’s session because many participants refrained from trading while awaiting Friday’s potentially market-moving employment report for March.

But, with many people keeping to the sidelines, the impact of each trade was magnified, making the bond market unusually volatile.

Meanwhile, hedge fund managers who bought mortgage-backed securities with money borrowed from major bond firms are selling the securities instead of meeting demands to put up more money, traders said. In turn, the bond firms are selling Treasuries to offset the risk of owning more mortgage-backed securities.

Yields on three-month Treasury bills edged down to 3.54% as the discount went down 0.02 percentage point to 3.47%. Six-month yields declined to 3.90% as the discount dipped 0.05 point to 3.78%. One-year yields fell to 4.37% as the discount fell 0.01 point to 4.19%.

Elsewhere, yields on actively traded municipal bonds surged as much as 12 basis points as higher interest rates continued to fuel concerns that mutual funds are dumping bonds to meet redemptions.

Among the market highlights:

* Express Scripts fell sharply for a second day, off 4 5/8 to 51 3/4. The company attributed the fall to general market conditions rather than fundamentals.

* Oils stocks and cyclical stocks continued weak. Chevron fell 3 1/2 to 83 3/4 and Texaco lost 1 1/4 to 63 1/8. Alcoa dropped 2 7/8 to 71 3/4, General Motors shed 1 3/4 to 54 1/4 and Caterpillar dropped 1 1/4 to 109 1/4.

* Some technology stocks, which led the market’s decline earlier this week, were among the only share prices that gained ground. Microsoft rose 1 1/8 to 83 5/8, while Lotus Development dropped 1/4 to 70 1/4.

* Woolworth fell 1 to 17 after the it announced that it was investigating allegations of accounting irregularities and would restate its interim financial results for the fiscal year ended Jan. 30.

Wall Street’s weakness also sent stock prices tumbling overseas. Hong Kong’s Hang Seng index plunged 247.93 points, or 2.62%, to 9,232.21, while in Tokyo the 225-share Nikkei average fell 149.83 points to 19,559.91. In London, the Financial Times 100-share average dropped 31 points to 3,092.4. Frankfurt’s 30-share average closed 20.82 points lower at 2,147.53.

Mexico City’s Bolsa index ended down 47.21 points, or 1.92%, at 2,410.38.