Stocks’ Decline Is Broad But on Modest Volume

Wall Street’s plunge Friday was as broad as it was deep, but the missing ingredient was high trading volume, analysts noted.

The Dow industrials sank 148.36 points, or 2.3%, to 6,391.69, the lowest close since Dec. 18, as bond yields jumped. (Main Story, A1.)

Other indexes were sharply lower as well, with the Standard & Poor’s 500 index slumping 2.7% and the Nasdaq composite dropping 2.3%.

But while losers swamped winners by 23 to 4 on the New York Stock Exchange, trading volume was a moderate 442 million shares.

Some analysts say the lack of volume indicates widespread investor complacency--a dangerous thing in a market where key indexes are already down almost 10% from their peaks.

“Light volume is not a particularly good sign,” said Gail Dudack, analyst at UBS Securities in New York. “It would be better to have a wash-out” session in which stocks plunged on heavy volume, she said. That might finally exhaust potential sellers, allowing the market to find its legs.

Otherwise, the danger is that the market could fall into “a long, drawn-out decline” that might demoralize many more investors, said Arnold Kaufman, editor of Standard & Poor’s Outlook investment newsletter in New York.

He noted that trading volume also was weak when the market attempted to bounce early this week from the previous week’s slump.

Analysts also were troubled by investors’ unwillingness this week to jump back into stocks of companies that posted strong first-quarter earnings, such as General Electric and Seagate Technology.

The bullish case has been that strong earnings would support the market.

The Dow now has fallen 9.8% from its all-time high reached in mid-March. The S&P; 500 is down 9.6% from its peak.

Kaufman said the debate over whether the broad market is in a “correction” or a full-fledged bear phase is moot for many investors, because many individual stocks are already down 20% or more from their highs.

Among Friday’s highlights:

* Interest-rate-sensitive financial issues were again hard hit. Chase Manhattan was down 3 7/8 to 90 1/4, Citicorp shed 5 1/4 to 104 7/8, NationsBank dropped 2 1/4 to 55 1/2 and Salomon Inc. fell 3 1/4 to 50 3/8.

* Technology stocks were also clobbered. Intel tumbled 6 3/4 to 130 1/2, in part on concern that the company is about to make deeper-than-expected chip price cuts.

Boston Scientific sank 14 3/8 to 46 1/8 after the company warned that its first-quarter results would fall short of analysts’ estimates.

Other tech issues slumping included Compaq, down 2 1/2 to 72 7/8; Cisco Systems, down 1 3/8 to 51 1/4; and Western Digital, off 2 7/8 to 63.

* Among classic growth stocks, Coca-Cola slumped 3 1/4 to 53 3/4 and Johnson & Johnson was off 2 1/8 to 52 1/4.

Market Roundup, D4