NEW YORK, SEPT. 6 -- The Dow Jones industrial average fell 31 points today as oil prices climbed over $31 a barrel on fears of future shortages.

But while ongoing, oil-related inflation fears dominated market fundamentals, stock selling was not heavy. The mechanisms driving trading were intermittent index-arbitrage program selling and a buyers' strike that took shape as traders and investors moved to the sidelines ahead of Friday's important employment data for August.

At the close, the Dow stood at 2596.29, down 31.93, while Big Board declines outpaced advances by a margin of almost 2 to 1 on light volume of 125 million shares.

Retailers posted some conspicuous losses after revealing sluggish August sales. Dayton Hudson was off 1 at 57 1/4, Limited fell 1 to 15 3/4, J.C. Penney dropped 1 to 45 7/8, the Gap lost 1 7/8 to 53 1/8 and Dillard gave up 1 1/8 to 81 3/4, while most other retailers posted at least fractional losses.

Among actively traded stocks, Motorola was slammed to a 7 5/8 loss at 61 1/2 on volume of over 2 million shares after at least two brokerages downgraded the stock due to little hope of improvement in a sluggish economy, among other factors.

Integrated oil companies benefited from higher crude prices, but not as prominently as on Wednesday. Atlantic Richfield, for example, completely erased a 2-point morning advance to close unchanged at 138 3/4, despite its announcement that a new non-polluting fuel could significantly increase its 15 percent share of the huge Southern California market for premium unleaded gasoline.

Although Kerr McGee rose 1 1/8 to 50 and Diamond Shamrock gained 1 1/8 to 22 7/8, most advances among the integrated oils were small fractions. Among service companies, Dresser rose 1 to 50 and other gains were equally small.

MNC lost 5/8 to 6 on volume of nearly 1 million shares. Analysts said institutional investors, fearing the elimination of the bank's dividends, may have dumped the stock in advance of an announcement. There were also rumors that Alfred Lerner, an MNC director, might back out of an agreement to boost the bank's capital in return for preferred stock.

Kay Jewelers gained 5/8 to 12 1/2 after Britain's Ratners Group announced it would proceed with the purchase of the Alexandria-based chain despite Kay's inability to buy back a majority of two outstanding junk bonds.

The Dow transports finished down 5.55 at 892.20, while the utilities eased 0.19 to 198.25 in contrast to their hefty gain on Wednesday.

Among broad stock indexes, the Standard & Poor's 500 was down 3.93 at 320.46, the NYSE Composite down 1.87 at 176.06, the Value Line down 1.78 at 246.51, the Amex Market Value down 0.91 at 324.50 and the Nasdaq Composite down 3.66 at 378.78.