Stock prices plummeted yesterday as Wall Street ignored a joint interest rate reduction by European central banks to try to stabilize currencies and promote global economic growth.

The Dow Jones industrial average began a steady decline almost from the opening bell, ending the day down 72.44 points at 1776.53. The decline reflected continued fears that neither stock prices nor the dollar have yet touched bottom.

The Dow closed only 38 points above its level after the 508-point "meltdown" on Black Monday, Oct. 19. {Details, Page C8.}

Sam Nakagama of Nakagama and Wallace Inc. said another stock market collapse cannot be ruled out. "Investors fear another crash," Nakagama said. "The bull market is simply over -- even a crash of the dimensions of Black Monday is a possibility."

Traders and investors reported a general conviction in financial markets that the Reagan administration still favors a lower rate for the dollar. And for the first time, some observers raised the question of whether Treasury Secretary James A. Baker III is actively seeking an international meeting of finance ministers to restore confidence and stabilize exchange rates. {Details, Page C8.}

"You won't see the stock market stabilize until there is conciliatory action among all of the major industrial powers, but especially not until there is a flat statement by the United States that it is satisfied with some dollar rate, and is willing to support it," said Salomon Brothers economist Henry Kaufman.

The West German central bank said it was cutting its discount rate -- the charge on loans it makes to commercial banks -- from 3 percent to a record low of 2.5 percent in an effort to shore up the dollar and stabilize volatile international currency markets.

It was also designed to help stimulate an increasingly sluggish economy at home. Real growth in the West German economy this year is now expected to be only 1.5 to 1.7 percent.

The West German discount rate also helps set the pattern all over Europe. Central banks in Britain, Belgium, France, Holland, Austria and Switzerland followed Germany's lead to differing degrees.

That should make the currencies of those countries less attractive to investors and stimulate demand for the dollar, shoring up its price on currency markets.

Baker had nothing to say yesterday about the dollar or prospects for a meeting of the United States and its six major allies, and the markets took that as a negative sign.

A brief announcement said only that he was "delighted" with West Germany's decision to cut its discount rate and the announcement Wednesday of a new three-year $13 billion loan program. Together, Baker said, the programs were a contribution to the effort to achieve "our international economic coordination" program.

Baker has been pressing the West German government for more than a year to boost economic activity through expansionary monetary and fiscal measures. At the same time, America's allies have demanded concrete action to lower the U.S. budget deficit.

"The markets have now gone into a very bearish mode, anticipating that official actions here and abroad will be grossly inadequate to cope with the magnitude of the problem," said C. Fred Bergsten, director of the Institute for International Economics.

He cited the limited nature of the U.S. budget deficit reduction package now before Congress and the modest scope of the German package, which does not meet Baker's demand for acceleration of a planned tax cut.

Despite the markets' cool assessment, the reductions in European interest rates represent a major negotiating achievement for Baker because for the time being the European action removes the possibility that the Federal Reserve Board will be forced to raise interest rates to keep the dollar from falling further.

Higher U.S. interest rates could discourage economic activity or even bring on a recession next year, close to election time.

New York investment banker Geoffrey Bell said yesterday that Baker seems more interested in protecting the U.S. economy from that misfortune than in the international economic coordination that he has been promoting for the past two years.

A Baker aide, asked about the Bell comment, snapped: "That is absolute nonsense. Baker in effect changed United States policy to put greater emphasis on international policy coordination."

Market participants said there would have been a near collapse of the dollar if, after much speculation, the European central banks had not cut interest rates. But they said the cuts were not enough to override more general negative sentiment.

The interest rate moves provided a modest stimulus to the dollar and bond markets. At the end of foreign exchange trading in New York, the dollar was up to 1.6622 German marks from 1.6473, and to 132.68 yen from 132.57 yen on Wednesday.

But stock markets here and abroad quickly wrote off the interest rate moves. If the dollar continues to go down, as most Wall Streeters are betting, economic activity in Europe and Japan, oriented to exports, would be expected to fall.

That prospect has already had a major impact on European stock exchanges. The West German stock market, for example, is down 29 percent since Oct. 19.

The finance ministers and central bankers of the Group of Seven -- the United States, Japan, West Germany, France, England, Canada and Italy -- have been expected to meet soon in an effort to reestablish close coordination of economy policy. America's partners are all seeking an agreement that would prevent the dollar from falling further.

On Oct. 20, the day after the 508-point decline, Federal Reserve Chairman Alan Greenspan and the board of governors at the Fed moved to provide the banking system with cash, lowering market interest rates. Baker said shortly afterward that the Fed's easy-money policy, designed to restore confidence in the stock market and to avoid recession, would continue even if the dollar falls as a result.

But Federal Reserve and other officials have privately made clear that such an open-ended monetary policy will not continue indefinitely.

At some point, they predicted, a dollar decline would have to be halted with higher interest rates to prevent two negative results: a soaring inflation caused by higher-priced imports, and an end to the flow of foreign investment money helping to finance the U.S. budget deficit.

Hence, Baker and Greenspan have been negotiating for lower interest rates abroad, which would have an effect comparable to higher rates here: The dollar would be more desirable to have, other currencies less so.

"The only American policy I see is to avoid an American recession at all costs, regardless of the impact of a cheaper dollar on the Japanese and European economies," Bell said.