NEW YORK, DEC. 28 -- Stock prices fell sharply in light holiday-season trading today, raising doubts about whether the stock market will get the post-Christmas rally that investors have been hoping for.

Traders blamed the weakening dollar, lower bond prices and an unusually small number of participants for the 56.7 point drop in the Dow Jones industrial average. The average gained gained 24.37 points last week.

The Dow index of big blue chip stocks closed at 1942.97. The NYSE composite index slid 3.35 to 137.50. The price of an average share fell 75 cents.

The few traders and analysts working on Wall Street said the absence of many traders and investors due to extended holiday breaks made the market's true condition difficult to gauge.

Declines led advances by more than 5 to 1 on the New York Stock Exchange. Big Board volume totaled 131 million shares, up from 108 million Friday.

"The dollar is at a record low, the bond market is off, and traders are very nervous here," said Ed Shopkorn, partner in charge of institutional equities at Mabon, Nugent & Co. "We don't have a full complement of traders, analysts or portfolio managers in, and discretion is the better part of valor in this market."

"I don't expect a sustained rally this week," Shopkorn said. "I don't think there are enough players here. I think we'll have to wait until next Monday to see where this market really is."

Shopkorn said that stock prices have "had a pretty interesting run over the last couple of weeks" and that consolidation was to be expected, especially in light of the weak dollar. The Dow gained more than 24 points last week and still stands nearly 10 percent above its early December low of 1766.74.

Analysts said the biggest negative factor in the stock market was the dollar, which today sank to record lows in Tokyo, Zurich, Frankfurt and Amsterdam.

Traders said neither White House statements nor reports of intervention by central banks in the the United States, West Germany, Japan and elsewhere to boost the value of the U.S. currency above Thursday's close.

Stock prices fell more than 50 points in the first few minutes of trading and were unable to make up the deficit.

Dennis Jarrett, a technical analyst with Kidder, Peabody & Co., said the weak dollar combined with overseas sell orders and light volume to create "a black hole" on the opening.

"In this environment, where volume is generally light, it doesn't take much to move prices," Jarrett said. He said "pent-up" international sell orders that piled up Friday and again today before the market opened ensured that pressure was on the downside.

But Jarrett said a period of further consolidation would be beneficial in light of the market's December advance and could set the stage for a January gain. "If we were to meander in this low 1900 area {on the Dow}, that would be healthy," he said.

"Where the {stock} market goes from here really depends on the dollar," Shopkorn said.

He said stock prices "may bounce from here," but suggested that technical factors indicate a narrow trading range that is unlikely to exceed a high of 2040 on the Dow.

On the trading floor, Southern California Edison was the most active issue, down 3/8 to 30 3/4. It was followed by Commonwealth Edison, also off 3/8 to 27 7/8, and AT&T, down 7/8 to 26 5/8.

Among other blue chips, General Motors lost 1 1/4 to 62, General Electric was down 1 1/8 to 44 7/8, USX fell 1 5/8 to 31 and Merck slid 4 1/4 to 156 1/4.

High-tech issues lost ground. IBM dropped 4 1/4 to 115 5/8, Texas Instruments slipped 1 7/8 to 54 1/8, Cray Research fell 3/4 to 69 1/2 and National Semiconductor lost 3/4 to 11 7/8.

Prices were sharply lower in active American Stock Exchange trading. The Amex market value index fell 4.26 to 256.64, and the average price of a share dropped 18 cents.