NEW YORK, NOV. 29 -- The Dow Jones industrial average, battered by Middle East war rumors and early afternoon sell-programs, closed down 16 points today.

British and Saudi troops were ordered to heightened alert status in Saudi Arabia ahead of the U.N. Security Council vote on a resolution approving the use of military force against Iraq. Although the Pentagon declined to comment on the combat status of troops in the field, a higher readiness status was widely assumed for U.S. forces in the Mideast as well, traders said.

{In Tokyo Friday morning, the U.S. dollar surged against the Japanese yen, while stock prices fell sharply. The dollar was quoted at 133.35 yen, up 3.20 yen from Thursday's close. On the stock market, the 225-issue Nikkei stock average closed the morning session at 21,933.99, down 778.61 points, or 3.4 percent, from Thursday's finish.

{Traders said the resolution adopted by the U.N. Security Council encouraged dollar buying and helped push stock prices lower.}

On Wall Street, the market was also bedeviled by conspicuous, high-volume losses in some important issues, particularly BankAmerica and McDonald's.

BankAmerica slumped 1 5/8 points to 21 7/8 on high volume amid profit-taking after November's rally, but also amid renewed fears involving the bank's exposure to California real estate, traders said.

McDonald's sank 1 1/8 to 28, also in active trading, after a Lehman Brothers analyst reported that, if rumors of a strategy of lower food prices at McDonald's restaurants prove to be true, the company's margins will fall sharply over the short term.

A McDonald's spokesman responded, "We are clearly not engaged in major price cutting or doing {anything} that will negatively affect profitability for either the company or franchisees. We are looking at and have tested value strategies ... we do not support discounting."

There were other prominent losers as well. Nashua Corp., a maker of office products and adhesives, plunged 8 3/8 to 30 1/2, a 20 percent decline, after management announced that fourth-quarter net income would not meet Wall Street estimates of 91 cents to 97 cents per share.

But all told, traders said there were few "heroes" willing to trade into new positions lest today's U.N. vote send oil prices sharply higher.

At the close, the Dow stood at 2518.81, down 16.34, while declining issues led advancing ones on the Big Board by a 4-to-3 ratio on moderate volume of 140 million shares.

Among industry groups, McDonnell Douglas led the aerospace group lower, posting a 2 7/8 loss at 43 3/4 following a report Wednesday by the Los Angeles Times that an Air Force review has concluded that the company, by 1994, will have overrun significantly its $6.6 billion cost ceiling for developing the huge C-17 military transport. McDonnell Douglas must contractually absorb all expenses above that ceiling, and the entire program is currently viewed as more troubled than ever. However, McDonnell Douglas said it would be able to adhere to the $6.6 billion ceiling.

Among broad stock indexes, secondary measures outperformed blue-chip averages for a third consecutive day. The Standard & Poor's 500 was down 1.53 at 316.42 and the New York Stock Exchange Composite dipped 0.77 to 173.14, but the Value Line lost only 0.36 at 230.76, the Amex Market Value was up 0.90 at 299.87 and the Nasdaq Composite gained 0.69 at 355.75.