NEW YORK, SEPT. 24 -- The Dow Jones industrial average plunged nearly 60 points today as rising oil prices and a falling dollar pushed the average to a 14-month low.
Traders were surprised by the sheer broadness of today's rout -- declining issues swamped advancing ones by a 7-to-1 ratio -- as well as the particularly sharp losses chalked up by important industry groups, such as money-center banks and transportation companies. Institutional buyers, traders said, were nonexistent.
Bank issues continued to suffer from investor perceptions that further losses from bad real estate loans will eventually force banks to lower or eliminate their dividends.
At the close, Chase Manhattan, which announced a dramatic restructuring last week and a halving of its dividend, was down 1 5/8 at 11 1/8. But Chase was not alone. Chemical lost 1 7/8 to 15 1/8, Citicorp sank 1/2 to 15 1/4, First Interstate gave up 1 3/8 to 23 3/4, Wells Fargo fell 1 3/8 to 49 7/8, First Chicago lost 1 3/8 to 16 7/8, Morgan surrendered 1 to 31 1/8, Bankers Trust slumped 1 7/8 to 32 3/8 and Bank of New York fell 1 7/8 to 18 5/8.
Transportation stocks also continued their recent decline in the face of rising oil prices that are expected to dampen demand and cut deeply into profits.
UAL fell 8 5/8 to 91 7/8 after union statements confirmed fears among many traders that the proposed employee buyout is unlikely to be consummated. And Boeing dropped 2 7/8 to 40 1/4 in heavy trading following ratings downgrades by analysts at Lehman Brothers and First Boston, which noted the slowing pace of airline orders and the likelihood that airlines might cancel orders because of financial woes.
Among other Dow components, Minnesota Mining fell 2 1/4 to 75 7/8, and Merck skidded 2 to 73 5/8. More than full-point losses were realized by General Electric, IBM, United Technologies and USX Corp.
Metal stocks were pulverized by analyst downgrades and the widely held fear that a recession could quickly drop commodity prices. Alcoa fell 3 3/4 to 63 3/4, Reynolds Metals shed 3 7/8 to 63 1/2 and Alcan dropped 1 1/8 to 20 3/8.
Computerized program trading played only a marginal role in the sell-off once the Dow had fallen more than 50 points, triggering trading restrictions. The so-called "uptick" rule took effect at 11 a.m., and was in effect for the rest of the day.
"One way or another, all the negative influences today were tied to what is seen as a new escalation of tensions in the Persian Gulf," said chief equities specialist Kenneth Ducey at S.G. Warburg, referring to reports that Saddam Hussein would blow up Mideast oil wells rather than accept forced retreat from Kuwait.
"It's a bear market, we have to accept reality," said Dudley A. Eppel, who manages equity trading at Donaldson Lufkin & Jenrette.
At the close, the Dow stood at 2452.97, down 59.41. Volume was a moderate 162 million shares. The Dow transports tumbled 34.77 to 841.90. The Dow utilities slumped 1.95 to 199.76, but didn't reach their August lows near 188.
Technical analyst Edward Nicoski at Piper Jaffray and Hopwood suggested that the decline in the interest-sensitive utilities could be the precursor for a four- to six-week "bear-market rally" in stocks.
Among broad stock indexes, the Standard & Poor's 500 was down 6.64 at 304.59, the NYSE Composite was down 3.52 at 167.51, the Value Line fell 5.62 at 230.07, the Amex Market Value dropped 3.17 at 312.84 and the Nasdaq Composite was off 10.09 at 352.16.