Topsy-Turvy Stock Market Tumbles Again

Exchanges Announce Plan to Shorten Trading Sessions

NEW YORK--Stocks tumbled in frantic trading yesterday, dousing hopes of quick recovery from the market's historic crash and raising fears that violent financial spasms may afflict the world indefinitely.

The Dow Jones average of 30 industrial stocks, the nation's best-known barometer of stock values, fell 77.42 points to 1950.43 at closing. Losing stocks swamped gainers by a 5-to-1 margin on the New York exchange. Volume exceeded 393 million shares in the fourth-busiest trading day ever.

Stocks also dropped sharply in London, wiping out more than two-thirds of the gains in Wednesday's record trading.

In an unusual step, the New York and American stock exchanges announced yesterday they would shorten each of their next three trading sessions by two hours to process the crushing volume of the last week. The New York exchange processed almost 2.5 billion shares in the past week, said NYSE Chairman John Phelan.

The exchanges will close at 2 p.m. today, Monday and Tuesday, and will open as usual at 9:30 a.m.

At one point yesterday, the Dow was down 140 points and bobbed violently afterward at sharply lower levels.

"The market's extremely fragile," said Peter J. DaPuzzo, manager of the retail equity group at Shearson Lehman Brothers Inc. in New York. "Any negative news causes it to break and people to sell out equities. There's so much tension and nervousness, the confidence level is very close to zero."

The value of all U.S. stocks fell $107.79 billion, wiping out nearly half the recovery of the previous two days, according to the Wilshire Associates 5000 Equity Index of stocks. The drop represented 4.2 percent of the total valuation of $2.4 trillion.

The frantic selling that gripped the New York and London exchanges much of the day reverberated through every other market, eroding the dollar's value and pushing up the price of U.S. treasury bonds and gold in a migration to safehaven securities.

"The stock market doesn't know what to do," said Robert Brusca, chief economist at Nikko Securities International Inc. in New York. "The message coming through clear, loud and strong is that the market is looking for greater coordination of economic policies that we haven't seen in a number of years."

Sell orders swamped the New York Stock Exchange when it opened after two days of partial recovery from the Monday crash that obliterated $500 billion in U.S. stock values in Wall Street's worst crisis since the Crash of 1929.