Inflation fears and concern about political instability in Russia sent stocks sharply lower on Friday.
The Dow Jones industrial average fell 29.18 points to 3,427.82.Declining issues outnumbered advancing ones by about 5-to-2 on the New York Stock Exchange, with 1,391 issues down, 549 up and 550 unchanged.
Volume on the floor of the Big Board came to 244.76 million shares as of 4 p.m., down from 250.62 million in the previous session.
Broad-market indexes fell. The NYSE's composite index fell 2.04 to 248.16. On the American Stock Exchange, the major market index slipped 1.22 point to 421.09.
Reports of Russian President Boris Yeltsin's continued battles with lawmakers could take President Clinton's eye off his own economic recovery plan, said Hugh Johnson, chief market strategist at First Albany Corp.
"The bond market really likes that plan," Johnson said, and the fear that it could be jeopardized forced interest rates higher and stocks lower.
Yeltsin stormed out of an emergency meeting with lawmakers at which he demanded a nationwide referendum on Russia's leadership after the Congress slashed his powers.
Stocks were also hit hard by a Labor Department report that wholesale prices jumped 0.4 percent in February, the biggest rise in more than two years. Analysts had been looking for a milder 0.3 percent rise in the department's Producer Price Index, which measures prices paid to producers such as factories and farmers.
Yeltsin's troubles and the PPI data sent interest rates higher. In the U.S. bond market, the 30-year bond was off $12.50 per $1,000 valuation and yielding 6.85 percent late in the day.
Higher interest rates increase companies' borrowing and production costs and make bonds more attractive than stocks as an in-vest-ment.
The Dow plunged more than 50 points in the morning in reaction to the wholesale prices data. It recovered about half of its losses by midday, retreated again as trouble heated up in Russia, then again recouped nearly half its losses in the afternoon as traders scrambled to cover short positions late in the day.
Interest-sensitive stocks were hit hard by the rise in rates. The Federal Home Loan Mortgage Corp. fell 11/2 to 473/4. The Federal National Mortgage Association declined 3/4 to 82.
Most gold stocks gained. Gold is generally seen as a hedge against inflation. Homestake Mining rose 5/8 to 121/2, and Newmont Gold advanced 3/4 to 35.
But American Barrick, a gold production company, fell 1 to 16 in heavy trading after Interior Secretary Bruce Babbit said the company might have trouble getting title to the land where its Nevada Goldstrike mine.
American Express finished up 5/8 at 28 in active trading after it got approval for the sale of the brokerage operations of Shearson Lehman Brothers to Primerica for about $1 billion in cash and securities. American Express also said it may spin off the Lehman unit.
Primerica rose 11/2 to 491/2.
Albertson's fell 15/8 to 52 in active trading. The supermarket company said Thursday that it was offering 5 million common shares at $52.50 each.
Casino stocks rose. Showboat Inc. was up 37/8 at 203/4, after getting the go-ahead for a riverboat casino in New Orleans.
Circus-Circus was up 23/4 at 49 after Morgan Stanley upgraded it, citing a brighter outlook for gambling stocks.