NEW YORK, SEPT. 21 -- A late wave of selling swept stock prices lower today, carrying the Dow Jones industrial average below 2500 after an early rally failed to stand up.
Dow Jones's average of 30 blue chips, which lost 84.10 points last week, fell another 31.82 to 2492.82, its lowest close since it stood at 2,485.33 on July 24.
Volume on the New York Stock Exchange came to 170.07 million shares, against 188.07 million in the previous session.
The session began amid widespread talk that the market was ready for a rally after a pullback of some 7 percent in the Dow Jones industrials since the average reached a record closing high of 2722.42 on Aug. 25.
The Dow did, in fact, rise more than 20 points at the outset. But the bond market, strong in early trading, gave up its gains and headed lower as the session passed, and enthusiasm for stocks gave way to selling once the advance in bond prices faded.
"After the failure of the bond market and then the stock market to get a sustained rally under way, a lot of demoralization set in," said Hugh Johnson, an analyst at First Albany Corp.
Though worries about inflation, Federal Reserve policy and other economic matters persist, Johnson said, "stock prices themselves have taken over as the focus of concern."
Analysts also noted that some popular individual stocks have lately taken a drubbing.
A case in point today was The Gap Inc., which tumbled 10 1/4 to 37 and led the active list on turnover of more than 3.6 million shares. Over the weekend the company said it expected to report lower earnings for the quarter that ends Oct. 31.
Shares of The Limited Inc., another specialty apparel retailer, lost 1 1/4 to 34 3/4.
Also prominent among the casualties was International Business Machines, often described as a bellwether issue that can set the tone for the market as a whole. IBM fell 4 7/8 to 150 1/2, down from a recent high of 175 7/8.
Newmont Mining dropped 7 1/8 to 94. Directors urged the company's shareholders to reject a $105-a-share offer by Ivanhoe partners, and declared a special cash dividend of $33 a share payable to holders of record at the close Oct. 1.
Pharmaceutical issues were broadly lower. Eli Lilly fell 4 1/4 to 95; Merck 3 1/2 to 198 1/2, Marion Laboratories 3 3/4 to 30 7/8, and Abbott Laboratories 2 to 57 7/8.
On the plus side, North American Philips gained 1 5/8 to 55 3/8. N.V. Philips of the Netherlands raised its offer for the North American Philips stock it doesn't already own from $50 a share plus warrants to $56 a share in cash.
Declining issues outnumbered advances by more than 2 to 1 on the NYSE. The exchange's composite index dropped 2.11 to 174.25.