NEW YORK, JULY 27 -- The Dow Jones industrial average slid 22 points today as waves of computerized sell programs flooded the trading floor and gloomy economic news from Washington kept buyers on the sidelines.
Prices began to fall almost immediately after the Commerce Department released figures for the country's gross national product showing growth at a meager 1.2 percent annual rate. While stock investors and traders hesitated to draw hard conclusions from Friday morning's battery of new and revised GNP data, program traders proved more decisive, executing the first of what eventually were a half-dozen bouts of index arbitrage selling.
The market opened in a jittery state after Tokyo's Nikkei-225 index closed down nearly 2 percent, largely in anticipation that the Bank of Japan would raise Japanese interest rates. Japanese investors were also responding to a government crackdown on the time-honored practice of financial institutions' guaranteeing profits to clients. Such a crackdown could undermine faith in such instruments as Japanese investment trust funds, Japanese sources said.
At the close, the Dow stood at 2898.51, down 22.28, while declines outpaced advances by almost 2 to 1 on moderate volume of 149 million shares, contracting slightly from 155 million on Thursday.
Earnings news on the corporate front in New York served to confuse the early market. The stock of Walt Disney Co., for example, quickly tumbled 5 points to 116 despite the company's upbeat report late Thursday of a 25 percent rise in third-fiscal-quarter profits. Some observers noted that Disney stock had been run up to a 2 1/8 gain into Thursday's close in anticipation of excellent earnings, but results had actually weighed in a tad under mean expectations, so the stock sold off more sharply than it otherwise might have. There was also concern that Disney may be a casualty of the slide in U.S. consumer spending.
Northrop Corp. dropped 1 3/8 to 14 1/8 amid reports of a Justice Department recommendation to the Air Force that the company be barred from making weapons for the U.S. military. Northrop has pleaded guilty to fraud charges.
International Business Machines Corp. fell 1 5/8 to 111 3/8 as 1.8 million shares changed hands. The stock is now over 11 points beneath its mid-July highs, posted when the Dow was flirting with a close above 3000. Soundview Financial Group downgraded the stock's investment rating to "sell" from "hold" and lowered its 1991 earnings estimate by 50 cents a share, to $9.50.
Other conflicting signals on the corporate-earnings front also served to stymie the market's rally attempts during the day.
After Thursday's close, Boeing Co. reported second-quarter net at the high end of expectations. Yet Boeing was able to muster a 1/8-point advance to close at 59 1/4 in composite trading.
Among other Dow components, full-point or greater losses were suffered by Bethlehem Steel Corp., General Electric Co., Minnesota Mining and Manufacturing Co., Merck & Co., and Primerica Corp..
The Dow transports fell 7.49 to 1134.67, while the interest-sensitive utilities only inched higher, up 0.19 at 203.35, despite a 21/32 rise in the 30-year Treasury bond amid bond traders' celebration of this morning's weak reading of second-quarter GNP growth.
Among broad stock indexes, the Standard & Poor's 500 was down 2.47 at 353.44, the NYSE Composite down 1.23 at 193.32, the Value Line down 1.61 at 279.49, the Amex Market Value down 0.84 at 355.49 and the Nasdaq Composite down 1.23 at 193.32.