Jittery Investors Send Stocks Lower; Dow Plunges 27.98

NEW YORK —  The stock market sustained another broad loss Monday, extending the slide that set in early this month.

Analysts said a disappointing earnings report from International Business Machines and uncertainties about tax reform combined to depress stock prices.

The Dow Jones average of 30 industrials fell 27.98 to 1,793.45, bringing its loss since July 2 to 115.58 points.

Volume on the New York Stock Exchange came to 123.17 million shares, against 124.47 million on Friday.

Analysts said investors’ confidence, already shaken by the market’s poor performance last week, suffered a new setback when IBM reported weaker-than-expected earnings for the second quarter. IBM shares led the NYSE active list and fell 3 7/8 to 139.

IBM is often cited as a bellwether stock that can influence sentiment in the general market. In addition, brokers said, the company’s report Monday morning served to intensify concern about the sluggish state of the economy and the high-technology industry in particular.

Among other computer and technology issues, Hewlett-Packard dropped 2 to 38 1/8, Digital Equipment 2 5/8 to 86, Data General 3/4 to 31 3/4 and Texas Instruments 4 1/2 to 113.

Brokers also said individuals and other taxable investors might be scrambling to sell before a House-Senate conference committee begins work to reconcile different versions of proposals to overhaul the tax system.

A provision in the Senate version calls for elimination of the preferential treatment of long-term gains on investments such as stocks. There has been talk that the committee, assuming it adopts that measure, might make it effective as of the opening of the conference rather than next Jan. 1.

One exception to the general down trend was electric utility stocks, which have been recommended by some analysts as “defensive” stocks if a period of continuing weakness develops in the market.

The day’s only gainers among the 15 Big Board volume leaders were Philadelphia Electric, up at 21 7/8; Texas Utilities, up 3/8 at 33 3/8; Southern California Edison, up 1/2 at 32 7/8, and General Public Utilities, up 7/8 at 22 7/8.

Losers Top Gainers

Energy issues were weak as oil prices remained under pressure. Amoco lost 1 5/8 to 55 7/8 and Chevron 1 to 34 3/4.

Declining issues outnumbered advances by about three to one on the Big Board.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,412, compared to 2,088 on Friday.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 147.68 million shares.

Standard & Poor’s index of 400 industrials fell 5.37 to 263.41, and S&P;’s 500-stock composite index was down 4.11 at 238.11.

In the credit markets, bond prices gained and interest rates declined slightly as a series of market analysts said they foresee continuing economic weakness that could keep credit charges from going up. A steep drop in energy prices also helped set a positive tone for bond dealers, analysts said.