NEW YORK, NOV. 7 -- The Dow Jones industrial average skidded 44 points today as new Middle East war fears sent oil prices sharply higher and U.S. bonds lower.

{In Tokyo Thursday, stock prices also fell sharply as investors were discouraged by weakness in other markets and fears of war in the Persian Gulf, the Associated Press reported. The 225-issue Nikkei stock average lost 666.54 points, or 2.84 percent, to end the morning session at 22,833.71. The index had shed 465.50 points on Wednesday.}

On Wall Street, stocks ignored a reasonably successful auction of $11 billion in 10-year notes, the second leg of the Treasury's quarterly refunding, in the face of an oil price surge that sent the crude oil over $35 a barrel on the New York Mercantile Exchange. The futures market was driven by remarks by British Prime Minister Margaret Thatcher, who in a speech to Parliament demanded that Iraq withdraw from Kuwait "soon" or be removed by force, "with all its consequences."

The oil rally was accelerated by reports that Egyptian President Hosni Mubarak affirmed there is now a military countdown to war in the Persian Gulf.

Amid such dire predictions, active December crude-oil futures closed up $2.68 at $35.31. The U.S. long Treasury bond tumbled more than 3/4 of a point despite buoyant morning action in anticipation of a successful Treasury auction.

"It was largely an oil-driven decline in stocks," said chief technician Edward Nicoski at Piper Jaffray & Hopwood Inc., a New York City brokerage. "But the Treasury auction was also a factor to some extent," he said. "Although the yields on 10-year notes were regarded as okay, the bids were not as numerous as people thought."

At the close, the Dow stood at 2440.84, down 44.31, while declines outpaced advances on the Big Board by more than 2 to 1 on moderate volume of 149 million shares.

Among Dow components, Alcoa continued its downward trend, falling 1 1/4 to 51 3/4, Chevron dipped 1 1/2 to 67 3/8, General Electric sank 1 3/8 to 52, IBM lost 1 3/8 to 106 1/2, International Paper gave up 1 1/2 to 46 1/2 and Minnesota Mining fell 1 1/8 to 78 7/8. Merck dropped 1 to 78 1/4, Procter & Gamble lost 1 1/8 to 78 3/4, Texaco dipped 1 to 57 3/4 and Exxon eased 1 to 48 1/4.

Among industry groups, prominent losses were registered among integrated oil companies as well as among computer, semiconductor, telecommunications, food and cosmetics companies.

Among hard-hit technology issues, Digital Equipment sank 2 points to 47 1/2, Motorola took a 3 3/8 point hit, closing at 5 3/4, and Compaq Computer shed 1 7/8 to 46 1/4.

Among stocks in the news, MCA Inc. closed down 1 1/2 at 61 1/2 after trading as low as 60 3/4. A wind-fanned fire damaged the company's Universal Studios Los Angeles theme park overnight, and there were some fears that damage in the hundreds of millions of dollars might delay a buyout offer expected from Japan's Matsushita Electric later this month.

Elsewhere among the actives, Browning-Ferris continued Tuesday's 6-point drop following poor earnings by posting a 2 1/2 loss to 21 3/4, while Waste Management dropped 1 1/2 to 31 1/2, also extending Tuesday's loss.

The Dow transports sank 11.29 to 832.84, as airlines dropped on higher oil price news.

The Dow utilities plunged 4.02 to 209.07 in a sudden reversal of generally strong recent rally action.

Among broad stock indexes, the Standard & Poor's 500 was down 5.61 at 306.01, the NYSE Composite down 2.74 at 167.47, the Value Line down 2.68 at 220.25, the Amex Market Value down 2.41 at 289.74 and the Nasdaq Composite down 3.73 at 336.80.