NEW YORK, JAN. 22 -- Shearson Lehman Bros., one of Wall Street's largest investment houses, announced today that it has suspended its own use of a controversial computer-assisted program trading strategy because of "concerns expressed by clients that program trading may exacerbate market volatility."

The decision appeared to be largely symbolic, since Shearson will continue to execute the program trading strategy for its clients. Shearson and E.F. Hutton Group Inc., which has agreed to be acquired by Shearson and joined in today's announcement, have suspended use of the program strategy only for their own accounts.

The trading strategy, known as index arbitrage, involves simultaneous, high-speed trades of stocks in New York and stock futures in Chicago. Investors using the strategy attempt to profit on temporary differences between the prices of stocks and stock futures.

Index arbitrage was one of the computer trading strategies identified by the presidential task force that studied the October stock market collapse as a factor in the market's fall. The task force, led by Dillon Read & Co. investment banker Nicholas F. Brady, made a variety of recommendations designed to curb market volatility.

Shearson's announcement today follows initiatives by the New York Stock Exchange to control volatile movements in the stock market. The NYSE disclosed this week that it would consider a formal system of brief trading halts whenever stock prices moved up or down sharply. Last week the Big Board announced temporary restrictions on computer-directed program trading whenever the Dow Jones industrial average moves 75 points in a day.

Wall Street officials involved in program trading operations said today that they expected some other large firms to follow Shearson. Other Wall Street executives, though, characterized Shearson's announcement as a publicity stunt.

Some officials emphasized that a firm's decision to suspend principal activities in index arbitrage may stem as much from concerns about conflict-of-interest with active clients as with worries about overall market volatility.

"You could love program trading and we could all agree that it's the greatest thing, and it still is an issue of whether you should be trading for yourself and doing stuff for customers," said Jeffrey Miller, partner at Miller, Taback & Hersh, a Wall Street firm active in computer trading.

"That's always been an issue on Wall Street."

A firm that executes program trades for its own accounts as well as for customers may face conflicts about when to seize trading opportunities for itself and when to execute the trades for customers.

Miller said that his firm has found it more profitable to earn commissions by executing programs for clients than to trade for its own account.

Miller also said that Shearson has been especially aggressive in pursuing index arbitrage clients in recent months.

"They still have that business," he said.

Shearson, however, emphasized the broader policy issues in its statement, noting, "investor confidence is being eroded by the extreme volatility in today's financial markets."

A Shearson spokesman said the issues of conflicts with customers "really didn't come up... .

"It was really done more in the spirit that there are a lot of concerns out there."

Merrill Lynch & Co. Inc. issued a statement saying that it had "not initiated an index arbitrage transaction for our own account since the exchange's voluntary limitations program went into effect {Jan. 15}. We are delighted that others are following suit."

Some Wall Street officials said today that Shearson's decision may have been influenced by the efforts of Robert Kirby, president of the Capital Guardian Trust money management firm and a member of the Brady Commission.

Kirby was said by these officials to have contacted other money managers and some Wall Street firms to urge that big investment houses suspend index arbitrage trading for their own accounts.

A Shearson spokesman said that he did not know whether Kirby had contacted the firm.

Kirby was out of the country today and unavailable for comment on the decision or his role in it.