The stock market took its sharpest drop in 2 1/2 months today in selling blamed on rising interest rates and concern over the outlook for gasoline supplies.
The slide left a broad range of stocks, from the blue chips and glamors to the gambling issues, with losses of a point or more.
The dow jones average of 30 industrials, which had declined 10.05 points last Friday, dropped another 14.12 to 833.42.
Today's decline was the average's biggest since it fell the same amount on Feb. 27.
Losers outnumbered gainers by better than a 7.1 margin on the New York Stock Exchange, with more than 1,400 issues in the minus column.
Actively traded hotel-motel and gambling stocks included Ramada Inns, down 7/8 at 12 1/4; Caesars World, off 5 1/2 at 69 5/8, and Bally Manufacturing, down 4 3/8 at 73 1/4. Ramada was the second most active Big Board issue.
Resorts International class A shares dropped 2 3/8 to 19 1/4 on the American Stock Exchange.
Those two issues helped pin the Amex market value index with a 5.62 point loss to 176.93, the second largest drop in that indicator since it was introduced in 1973. The biggest was a 5.78 point decline last Oct. 20.
Analysts said the pressure on the gambling and travel stocks stemmed from gasoline shortages in California and fears of similar problems around the country this summer.
Apparently for similar reasons, Walt Disney Productions dropped 1 1/3 to 34 5/8. Among other blue chip and glamor issues, Eastman Kodak lost 1 7/8 to 59 3/4, Polaroid 1 1/2 to 32 1/2, Du Point 1 1/4 to 130 3/4, Texas Instruments 1 1/2 to 81 7/8 and General Electric 1 1/8 to 48 5/8.
Brokers also noted uneasiness over the interest-rate outlook. Recent expansion of the money supply has led the Federal Reserve to tighten credit and analysis said more moves by the Fed in that direction were likely.
In particular, there was talk that the Fed soon might raise its discount rate-the rate it charges on loans to its member commercial banks.
Rising interest rates are considered a negative influence on stock prices because they increase the attractiveness of interest-bearing securties such as shares of money-market funds which compete with stocks for investors' favor.
Big board volume totaled 30.48 million the day before.
The NYSE's composite index dropped 1.01 points to 55.75.
Nationwide turnover in NYSE-listed issues, including trades in the over-the-counter market, came to 34.31 million shares.
Standard & Poor's index of 400 industrials tumbled 1.94 points to 110.62, and S&P's 500-stock composite index was down 1.67 at 99.02.
Twenty-nine of the 30 stocks in the Dow declined, and the other - Owens-Illinois - was unchanged at 19 3/4.
Fairchild Camera was the most active NYSE-listed issue, up 3/8 to 54 5/8. Gould Inc. increased its tender offer for Fairchild stock to $57 a share from $54. Fairchild directors, who rejected the original bid, were to discuss the latest offer.Gould stock eased to 23 3/4.
General Public Utilities (ex-dividend) was the third most active issue, off 3/8 to 9 3/8. The company has requested a $110 million rate increase to cover problems posed by the Three Mile Island nuclear accident.
Boeing Copr. shed 1 7/8 to 40 1/8. The aircraft giant declared a regular quarterly dividend of 25 cents a share on recently split shares after reporting its first-quarter earnings climbed to $1.69 a share from 71 cents a year ago.
Charter Co. dropped 2 3/8 to 15 1/4, and the warrants lost 2 1/8 to 10 1/2 in active trading. Investors apparently were becoming a bit uncertain about Charter's bid to acquire Carey Energy Corp.
Dome Mines rose 3 3/8 to 102 1/8. Dome Petorleum bought 547,183 Dome Mines shares at $120 a share on the Toronto Stock Exchange and is seeking up to 650,000 shares. Dome Petroleum lost 6 1/2 to 113 1/4 on the Amex.
Tandy Corp. shed 1 5/8 to 20 5/8 after reporting its Radio Shack division posted only a 1 percent increase in April sales while the overall company had an 8 percent hike. CAPTION: Graph, The Market in Brief, (May 7, 1979) The Washington Post