NEW YORK, JUNE 22 -- The Dow industrials fell 44 points today amid heavy computer program selling after the index-futures markets tumbled in the last 35 minutes of trading.
The Dow, which had been ahead all day, fell from a 23-point gain to its 44-point loss -- an alarming 67 points -- in 45 minutes.
By the market close, neither savvy traders nor brokerage strategists had any idea why the futures market had plunged in late trading, triggering active index-arbitrage selling in cash stocks.
Neither morning statistics on May durable-goods orders nor data on personal income and consumption had moved either the stock or bond markets noticeably. Before the late afternoon drop, the session had been dominated by technical traders and institutions engaged in unaggressive end-of-quarter portfolio adjustments while bonds and currencies languished nearly unchanged.
At the close, the Dow stood at 2857.18, down 44.55, while declines outpaced advances by a ratio of 3 to 2 on active but program-inflated volume of 172 million shares, expanding sharply from 138 million on Thursday.
Cash-market and futures analysts were stunned by the late, program-driven whipsaw -- perhaps the most volatile futures-related trading since outcries from investors sent program traders into relative hiding in the wake of the Oct. 13, 1989, "Friday the 13th" massacre, when the Dow plummeted 190 points in a day.
Bonds were off a mere 2/32 as midafternoon program buying locked in, and were actually up 4/32 as the battered stock market closed. Neither did the currency markets serve as a catalyst; the dollar was only marginally off against the yen and deutsche mark in late trading.
Market sources did agree that the sell-off had nothing to do with early economic data. The U.S. long Treasury bond was up 4/32 as stocks opened even though the Commerce Department announced that durable goods orders in May rose 3.9 percent, well above the 2.5 percent generally expected.
May personal spending, however, had a more ominous economic ring. The Commerce Department pegged personal expenditures as flat for April, even though Wall Street had expected a modest, 0.2 percent rise.
Among Dow stocks at the close, damage was extensive. General Motors fell 1 1/2 to 48, IBM skidded 2 7/8 to 116 1/4, International Paper lost 1 5/8 to 50 7/8, Coca-Cola dropped 1 to 43 3/8, Merck gave up 1 7/8 to 81 3/4 and AT&T slumped 1 1/8 to 42 1/2.
The Standard & Poor's 500 tumbled 5.03 to 355.43, the NYSE Composite dropped 2.25 to 194.24, the 1,700-stock Value Line unweighted index fell only 1.25 to 285.03, the Amex Market Value lost a moderate 0.94 to 359.28 and the Nasdaq Composite gave up 1.94 to 459.33.