FINANCIAL MARKETS : Stocks Fall and Dollar Fades; Dow Loses 33.98

A strong wave of technical selling hammered stocks in late trading Friday and the Dow industrials moved farther from 4,000 after their flirtation with that uncharted level.

The Dow closed at 3,953.54, down 33.98 for the day. It gained 14.47 points for the week.

The blue-chip index was moderately lower for most of the session. Then “sell” orders tied to a double futures expiration date flooded the market in the last 20 minutes of trading, creating imbalances and sending the Dow down about 25 points.

Declining issues outnumbered gainers 4 to 3 on the New York Stock Exchange. Big Board volume was 347.98 million shares as of 4 p.m., heavy but below Thursday’s 360.99 million shares.

Broad market indicators also closed lower. Standard & Poor’s 500 composite, which reached three new highs this week, fell 3.25 points to 481.97.

The NYSE’s composite index fell 1.44 points to 261.83. The Nasdaq composite index retreated 6.34 points to 786.97.

Stocks weakened early in the day in sympathy with the bond and currency markets, even after the Commerce Department pegged the nation’s December trade deficit at $7.34 billion, narrower than analysts had expected.

But the department also said the deficit grew 25.4% last year, widening to $166.29 billion.

The dollar was buoyed somewhat by the trade report, but it remained weak all day, closing in New York at 97.25 Japanese yen and 1.482 German marks, down from 97.45 and 1.489 on Thursday.

The weak dollar and news of rising U.S. imports as well as exports reawakened concerns about inflation, pushing Treasury bond yields higher. The 30-year yield closed out the week at 7.58%, up from the previous session’s 7.57%. Its price, which falls when yields rise, dropped 5/32 point, or $1.56 per $1,000 invested.

Traders said foreign investors, concerned that escalating financial problems in Mexico and Canada might hurt the United States, sold the dollar and dollar-denominated securities.

Among Friday’s stock highlights:

* Technology issues suffered sharp losses. Motorola fell 6 3/8 to 57 7/8 after the company warned of abnormally large inventories of cellular phones in the United States and weak sales of its integrated radio system and inefficiencies in its semiconductor business.

* Intel fell 1 1/16 to 78 13/16; Microsoft was off 1/2 at 60 3/8; Hewlett-Packard slipped 1 1/2 to 114 3/8.

In Tokyo, the Nikkei-225 average rose 239.92 points to 18,020.51.