NEW YORK, SEPT. 13 -- The Dow Jones industrial average fell 43 points today in a session dominated by computerized selling and nervousness about the economy.

Potential buyers were said to be waiting on the sidelines in advance of Friday's government report on producer prices, but such trepidation was only part of the market's problems today. After nearly a week of seeing stock prices whipsawed by every swing in volatile oil prices, nerves were frayed. Exacerbating the atmosphere today, traders heard rumors of everything from an imminent "invasion" of Israel by Arab forces, to "televised" news of an immediate attack on Iraq by the U.S. military. All these rumors proved false.

"There have been stories about terrorism and wild rumors about an imminent invasion of Israel today," said block trader Lawrence Greenwald at Sanford C. Bernstein, "but what really matters is that people continue {to be} cautious and afraid to make commitments.

"There is still no volume, and that's key here," Greenwald said. "There's very little feature, and we've seen weakness pretty much across the board. When you've got political instability at home -- there is yet no sign of a federal budget accord -- and there are serious problems overseas, you can't expect to 'call' the markets."

Just how nervous and thin the market really was became apparent in mid-afternoon, when a tidal wave of computerized sale orders hit the floor and drove the Dow down 20 points in eight minutes.

At the close, the Dow stood at 2582.67, down 43.07, while declines outpaced advances on the Big Board by a more than 2 to 1 ratio. New York Stock Exchange volume remained very light, reaching only 123 million shares.

Bank stocks were broadly lower, but losses among the money-center banks were mostly fractional despite a week filled with dire news about the Federal Deposit Insurance Corp. fund. Nonetheless, Manufacturers Hanover did fall 1 1/4 to 25 5/8, Security Pacific dropped 1 1/8 to 26 and Wells Fargo skidded 1 5/8 to 54 1/4.

Insurance stocks were also broadly lower in a soft financial sector. CNA Financial dropped 2 1/2 to 61 1/2, Marsh and McLennan lost 1 to 68 1/8 and TransAmerica fell 1 to 30 1/4.

Broadcasting outfits were prominent losers as CBS gave up 3 1/4 to 169 5/8, Capital Cities/ABC lost 13 to 472 and Lin Broadcasting dropped 2 1/2 to 48 1/4.

Among drug stocks, Genentech fell 2 1/2 to 26 1/2, while Lilly eased 2 to 73 1/2, Pfizer lost 1 1/8 to 71 3/8, Schering-Plough dropped 1 1/8 to 45 and Warner-Lambert sank 1 1/4 to 62 1/8.

Digital Equipment was a conspicuous loser among the computer companies, down 2 3/8 at 59 1/4 -- a new 52-week low -- on high volume. Also active was IBM, down 2 7/8 to 105.

Other conspicuous losers included Nucor Corp. among the steel outfits, which swooned 4 3/8 to 61 3/4 after one analyst lowered his estimate of the company's earnings, and Disney, which fell 2 7/8 to 96 1/4.

Among chemical companies, International Flavors and Fragrances fell 1 5/8 to 68 3/8, Morton dipped 1 3/8 to 40 1/2 and Great Lakes eased 7/8 to 53 1/8.

Retailers also got clobbered as Dayton Hudson, Dillard, the Gap and May Stores all suffered full-point losses.

The Dow transports lost 10.53 to 898.12, while the utilities gave up 1.64 to 200.07.

Among broad stock indexes, the Standard & Poor's 500 was down 3.89 at 318.65, the NYSE Composite down 1.93 at 175.16, the Value Line down 2.13 at 244.73, the Amex Market Value down 1.18 at 322.01 and the Nasdaq Composite down 4.14 at 376.18.