Dow Tumbles 28.45 in Hectic Program Selling

NEW YORK —  Wall Street stocks closed lower Wednesday as a sharp rise in commodity prices frightened investors, drove down bond prices and touched off late program selling of shares.

The Dow Jones industrial index fell 28.45 points to 2,130.16. It was down by as much as 46 points in the final minutes of trading. The Dow rose Tuesday by 27.03 points to a new post-October-crash high of 2,158.61.

“The Commodity Research Bureau index, which had been very quiet, suddenly took off; that put pressure on bonds, which created a window of bearishness and kicked in the sell programs,” said Ralph Bloch, chief technical analyst at Raymond James.

Declining issues outnumbered advances by more than 9 to 5 in nationwide trading of New York Stock Exchange-listed stocks.

Volume on the floor of the Big Board came to 189.63 million shares, against 171.79 million in the previous session. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 223.32 million shares.

Also pressuring stock prices was news that the New York Stock Exchange is considering whether to end its ban on the use by member firms of its automated order system when the Dow moves up or down by 50 points. The news made some investors skittish, analysts said, because they feared volatility would return to the market.

That nervousness was compounded by rumors, subsequently denied, that a U.S. plane had been shot down over the Persian Gulf, traders said. “There’s a lot of emotion and fear out there,” one trader said.

Jobs Report Awaited

Gene Seagle, director of technical research at Gruntal & Co., said, “Rumors can bring the market down. You’re dealing with traders and they only watch for which is the easier way for the market to go, whether it’s rumors (about the Persian Gulf) or the drought situation.”

An easing in bond prices, which fell in late trading, did little to encourage stock buying, analysts said.

“Bonds are also very edgy about the (June) employment numbers Friday,” said Marshall Acuff, market strategist with Smith Barney. “Traders (in the bond market) have been reluctant to take major positions.”

A sharp rise in the jobs report could reawaken concerns about an overheating economy and might prompt the Federal Reserve to tighten credit, analysts point out.

Despite Wednesday’s decline, the mood on Wall Street remained optimistic.

“(The 27-point gain) yesterday was more important than today. This is more of a short-term flurry,” Seagle said.

Other investors were put off by the failure of a broad range of indicators to reflect the strength indicated by the Dow on Tuesday.

“The advance and decline indexes failed . . . to confirm the post-crash highs by the Dow industrials,” Bloch said. “When that fails, you breed a great deal of disappointment.”

Auto Issues Lose

Among the blue chips, International Business Machines dropped 2 3/8 to 126 7/8; American Telephone & Telegraph fell to 26 3/4; General Electric retreated 1 to 43; Exxon edged down 1 to 44 5/8, and Du Pont was off 2 1/2 at 90.

Auto issues lost ground despite stronger-than-expected sales reports from the Big Three domestic car manufacturers for the last third of June. General Motors fell 7/8 to 79; Ford Motor was off 5/8 to 53 3/8, and Chrysler dipped 3/8 to 24.

Pullman gained 1/8 to 7 5/8 in active trading. An investor group led by top executives of the company is proposing to acquire it for $7.50 a share.

Scientific-Atlanta rose 3/4 to 15. The company said it knew of no reason for the increase in the stock price.

Incstar, traded on the American Stock Exchange, climbed 1 3/4 to 8 1/8. The company raised its earnings projection for the fiscal year that ends next March.

Indexes Lower

The Wilshire index of 5,000 equities closed down 28.671 at 2,720.333.

The NYSE’s composite index of all its listed common stocks dropped 1.81 to 153.76.

Standard & Poor’s industrial index fell 4.14 to 314.38, and S&P;’s 500-stock composite index was down 3.79 at 272.02.

The NASDAQ composite index for the over-the-counter market slipped 0.66 to 395.45. At the American Stock Exchange, the market-value index closed at 309.21, down 0.38.

On the Tokyo Stock Exchange, the Nikkei 225-share index climbed 189.43 points, or 0.69%, to 27,766.60. It surged 216.78 points on Tuesday.

In London, stock prices finished higher after a late afternoon surge in reaction to Wall Street’s early rise.

The Financial Times 100-share index rose 15.2 to close at 1,870.0.