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The U.S. trade deficit widened dramatically in February to $13.8 billion, the largest since October and the second straight jump, the government said Thursday.

Prices of stocks and the value of the dollar fell almost immediately in reaction to the announcement that the gap between imports and exports rose $1.4 billion from January's $12.4 billion imbalance.The Dow Jones average of 30 industrial stocks fell nearly 45 points in the first few minutes of market activity but regained about 8 points of that loss through the first 90 minutes of trading.

The Federal Reserve Bank and central banks in Europe intervened in the foreign exchange markets, buying dollars in large volumes after the currency lost 2 percent of it value against the Japanese yen and the German mark almost immediately after the announcement.

Analysts had largely predicted beforehand that the February deficit would shrink slightly.

White House spokesman Marlin Fitzwater commented, "The overall report is discouraging in the sense that it went up instead of down." However, he said, the average trade deficit for January and February is $1.2 billion less than for the fourth quarter of 1987.

"The trade figures released this morning should be seen in context. As we have said before, too much emphasis should not be placed on any one month's figures," Treasury Secretary James A. Baker III told reporters.

"We've stumbled here a little bit," said Jay Goldlinger, an analyst for Capital Insight, an economic consulting firm based in Los Angles. "It reminds us that we have a major, major problem."