A sharply lower dollar and renewed jitters about inflation pushed stocks prices lower Thursday.
The Dow Jones industrial average, led lower by economically sensitive stocks, fell 14.87 points to 3,979.93, closing below 4,000 for the second time this week as investors sold issues they believed would lose value should interest rates rise.
Declining issues led advancers by about 6 to 5 on the New York Stock Exchange, where the volume totaled 330.03 million shares, down from 362.60 million on Wednesday.
Broad market indexes were mixed.
The Nasdaq composite index rose 1.81 points to 793.68, the American Stock Exchange market value index climbed 2.32 points to 453.06, but the NYSE composite index fell 0.40 point to 263.36 and the Standard & Poor's 500-stock index fell 0.52 point to 485.13.
The dollar slid to a post-World War II low against the Japanese yen and to its lowest rate against the German mark since October, 1992. In New York trading, the dollar fell to 96.26 yen, down from 96.78 late Wednesday, and closed at 1.442 marks, down from 1.463 late Wednesday.
The U.S. currency's rout sent interest rates higher, with the yield on 30-year Treasury bonds rising to 7.48% from 7.44% late Wednesday. Its price, which falls when yields rise, fell 15/32 point or about $4.69 per $1,000 in face amount.
The retreating dollar has pulled global investment money out of the United States and dollar-denominated securities, including stocks, and into European securities, said Leon Brand, global investment strategist at Natwest Securities.
Stocks bounced off the day's bottom after the Treasury intervened to support the dollar, but still ended the day lower.
Bonds and stocks were also weakened by economic reports that stirred inflation fears.
The Commerce Department reported that Americans' personal income rose 0.9% in January and that spending increased 0.4%. It also reported that sales of new single-family houses rose 3.8% in January, slightly more than had been expected. The Labor Department said first-time claims for unemployment insurance dropped 13,000 during the week ended Feb. 25.
Among the market highlights:
* The Dow average components were led lower by cyclical issues, including International Paper, down 2 1/8 to 73 1/8; Caterpillar, off 1 1/2 to 48 3/4, and General Electric, which slid 1 to 53 1/8.
* Deere & Co. dropped 1 to 73 3/8, and Whirlpool fell 1/4 to 54 1/4.
* Big Three auto stocks, also considered cyclical issues, showed losses. General Motors, a Dow component, lost 5/8 to 39 7/8. Ford fell 1/4 to 25 3/8. Chrysler ended up 1/8 at 41 1/2 after spending most of the session lower.
* Salomon Bros. said it raised its 1995 and 1996 earnings estimate for IBM, setting a 12- to 18-month price target on the stock of $100. IBM finished up 1 7/8 to 77 1/4.
* Homedco Group and Abbey Healthcare said they were merging to form the largest home health care provider in the United States. Abbey soared 7 3/8 to 35 1/4, and Homedco gained 8 3/4 to 52 1/4.
* Some retail stocks moved higher after the release of mixed but generally sluggish February sales figures. Wal-Mart Stores rose 1/2 to 24 7/8; the Limited rose 1 1/4 to 18 3/4, and Sears rose 5/8 to 50 5/8.
* Chiron fell 2 13/16 to 56 after the biotechnology firm said it expects a first-quarter charge of $200 million to $250 million resulting from some corporate purchases.
Overseas stock markets were mixed. Tokyo's 225-issue Nikkei average rose 344.47 points, closing at 16,963.18. However, Frankfurt's 30-share DAX average closed down 7.49 points at 2,118.66 and London's FTSE 100 index finished at 3,038.2, off 3 points. Mexico's Bolsa index closed just 0.88 point lower at 1,517.08.