Dow Falls 28.36 as Bond, Dollar Markets Wane

NEW YORK —  Stock prices took a pounding Thursday, hit by futures-related selling programs and plunges in bond prices and the dollar.

The Dow Jones index of 30 industrials tumbled 28.36 to 2,475.00.

Losers swamped gainers in nationwide trading of shares listed on the New York Stock Exchange, with 1,078 issues declining, 444 rising and 466 unchanged.

Volume on the floor of the Big Board came to 179.48 million shares, up from 170.54 million in the previous session.

Stocks were sold in preparation for the so-called triple witching hour, which occurs once each quarter when stock-index futures, index options and options on individual stocks expire. Trading volume was expected to be heavy today as investors adjust their positions in stocks and futures.

A setback in the credit market acted as a catalyst to the stock selling. The 30-year Treasury bond rate dropped about 1 1/2 points, or $15 for every $1,000 in value. The bond’s decline coincided with a steep slide in the dollar.

Bond traders previously had been buying out of optimism that the dollar’s recent strength would attract foreign investments.

Larry Wachtel, market analyst at Prudential-Bache Securities, said the market declines were unsurprising.

“I guess we just got a case of tired blood,” he said. “The bond market, the stock market and the dollar have all moved to excess.”

Integrated Resources Inc. shares plunged nearly 50%, to a closing price of $6.25, after the insurance and mutual funds company said it was stopping payment on $864 million in short-term debt. Integrated, which has $7.8 billion in assets, said that its affiliates and subsidiaries would continue paying creditors. Banks on Wednesday withdrew Integrated’s access to short-term credit markets. About 1.7 millions shares of Integrated were traded Thursday on the New York Stock Exchange.

Stock prices on the London Stock Exchange finished mostly lower Thursday on the back of early losses on Wall Street. The Financial Times 100-share index lost 4.0 points to close at 2,129.6.

Credit

Bond prices dropped in hectic trading, dragged down by the tumbling dollar.

The Treasury’s closely watched 30-year bond tumbled about 1 1/2 points, or $15 for every $1,000 in face value. Its yield, which moves in the opposite direction from price, soared to 8.30% from 8.16% late Wednesday.

The federal funds rate, the interest banks charge each other for short-term loans, was quoted late in the day at 9.438%, down from 9.50% late Wednesday.