NEW YORK, NOV. 19 -- Stocks slumped today in what analysts called a show of exasperation with the failure of Washington negotiators to agree on a budget-deficit reduction one day before automatic cuts take effect. The dollar also edged lower.

The bickering between the Reagan administration and Congress on an issue that played a role in the Oct. 19 stock crash dismayed investors and convinced some that any deficit reduction package would be superficial, analysts said.

"I think the market is showing a high degree of disgust with the inability of the budget negotiators to come up with anything after 3 1/2 weeks of effort," said Alfred Goldman, a market strategist at A.G. Edwards & Sons Inc., a St. Louis-based investment firm.

The Dow Jones industrial average dropped 43.77 points to 1895.39, putting the widely watched indicator under the 1900 level for the first time in a week. Broader market barometers also declined sharply.

Volume on the New York Stock Exchange totaled a relatively light 157.14 million shares, an indication that many investors were waiting for a budget-deficit reduction pact before they decided their next move. Wednesday's volume was 158.27 million shares.

Market attention has been fixed on the deficit talks because they are considered a crucial indicator of the U.S. government's resolve to stop spending beyond its means.

In composite trading on the New York Stock Exchange, losing issues outnumbered gainers by more than 3 to 1.

The NYSE composite index of all its listed issues fell 2.86 to 134.72. On the American Stock Exchange, the market value index dropped 5.09 to 241.76.

Currency traders said the dollar generally moved in accordance with the latest reports from the budget negotiations.

"The markets generally don't like uncertainty, and I'm surprised the dollar's performance was as good as it was today," said James McGroarty, a vice president with Discount Corp.

In late New York trading the dollar slipped to 135.225 yen from late Wednesday's 135.500 yen and to 1.6804 West German marks from 1.6848 the day before. The British pound rose to $1.7785 from $1.7740 late Wednesday.