NEW YORK, SEPT. 27 -- The Dow Jones industrial average fell 32 points today as a fresh surge in oil prices swept November crude above $40 a barrel.

A new debacle in bank stocks also helped keep selling pressure on the stock market. NCNB Corp. opened to a hefty loss after Wednesday's announcement of sharply lower third-quarter earnings. More sour news came in the middle of the afternoon, when Bank of Boston announced a two-thirds slash in its quarterly dividend and a probable third-quarter loss of $200 million to $250 million. Across the board, bank stocks were pounded mercilessly.

Another substantial decline in the Japanese stock market didn't help matters, traders said. Overnight, Tokyo's Nikkei-225 slid 479 points to 21,771, which is only 207 points above its December 1987, post-crash closing low.

At the close, the Dow stood at 2427.48, down 32.17, while declines far outpaced advances on the Big Board by nearly 3 to 1. Veteran market-watcher Richard Russell, who publishes Dow Theory Letters from La Jolla, Calif., said that market action over the last two weeks has been typical of a primary bear market in stocks.

"The stock market is oversold, but it's been oversold since early July," Russell said. "It's a characteristic of primary bear markets that they can remain oversold for extended periods of time."

Market analysts who have entered the profession since 1974 "have never seen a true primary bear market in action," Russell said. "Thus, they have remained bullish -- or mystified -- by the stock market's refusal to push skyward as soon as it is oversold."

General Electric lost 3 1/2, closing at 51 1/2 after a federal court removed limitations on the company's liabilities for defective design of a nuclear containment vessel for a Washington state power plant.

USAir shed another 7/8, closing at 15 1/8 following Wednesday evening's announcement of a dividend cut and delayed plane purchases.

Unisys lost nearly 25 percent of its value, dropping 1 3/4 to 5 1/4, after suspending its dividend and announcing it would report a loss in the current quarter.

Among the bank stocks, the damage was widespread. Bank of Boston lost only 3/8 to 7 1/8 after its dismal news: Traders said the stock was already sufficiently depressed after falling from a high near 30 in July. Wells Fargo was down 3 5/8 at 42 3/4, Bankers Trust down 1 3/8 at 30, Bank of New York down 1 3/8 at 16 1/8, Manufacturers Hanover down 1 at 20 1/4, Security Pacific down 1 1/2 at 19 1/2, First Interstate down 2 1/4 at 19 3/4, and Republic New York down 1 1/2 at 37 1/2.

Among large regional banks, NCNB tumbled 3 1/8 at 20 1/8, Barnett Banks lost 2 to 16, First Wachovia sank 1 3/8 to 33, PNC Financial fell 1 5/8 to 20 1/8 and First Union dipped 1 to 14 1/8, to name a few.

Insurance companies were more broadly decimated than at any time in recent weeks. Marsh and McLennan fell 1 3/4 to 60 7/8, Aetna lost 1 1/2 to 35 7/8, Cigna gave up 1 1/4 to 36 7/8, CNA sank 1 1/2 to 55 and TransAmerica surrendered 1 1/2 to 26 1/2.

Oracle Systems was most active in over-the-counter trading, falling 5/8 to 5 5/8 after announcing disappointing earnings.

The Dow transports fell 18.49 to 828.03, but the resilient utilities lost only 1.13 to 198.69, still holding well above their Aug. 23 lows near 188.

Among broad stock indexes, the Standard & Poor's 500 was down 4.09 at 300.97, finally breaking decisively its trend-line support dating from January 1990 and October 1989 lows. The NYSE Composite was down 2.16 at 165.36, the Value Line down 3.85 at 224.37, the Amex Market Value down 4.63 at 305.43, and the Nasdaq Composite down 8.84 at 341.19.