Stocks Tumble As Inflation Jitters Intensify

Stocks slid Wednesday and the Dow Jones industrial average snapped a three-day advance, retreating from record levels as investors found few reasons to cast aside worries over inflation and interest rates.

The average of 30 big-name stocks fell 45.79 to 7,039.37 after recovering partly from an afternoon deficit of more than 74 points. The blue-chip barometer had risen since Friday, closing at records Monday and Tuesday.

Broader indicators had posted fairly modest losses until interest rates started rising in the bond market at midafternoon. Bellwether technology shares continued to struggle.

“A portion of the street now believes that the economy is strong enough to warrant some restraints by the Fed,” said Larry Wachtel, a market analyst at Prudential Securities. Higher interest rates would impede borrowing and spending, helping ease inflationary pressures, but also could hurt stocks by slowing company revenues and raising corporate operating costs.

Declining issues outnumbered advancers by more than a 5-to-3 margin on the New York Stock Exchange, where volume totaled 483.12 million shares as of 4 p.m., down slightly from Tuesday’s pace.

Some of the stocks that moved substantially or traded heavily Wednesday:

NYSE

TPC, up 2 at 13-1/8.

PacifiCorp of Portland agreed to acquire natural gas company TPC for $288 million, or $13.41 a share, plus $147 million in assumed debt. Houston-based TPC was formerly known as Tejas Power Corp.

General Signal, down 3-1/4 at 40-3/8.

The maker of electrical components, instruments and other industrial products expects first-quarter earnings to be about 7 percent lower than year-ago levels due to lower order expectations and pricing pressures.

Office Depot, up 3-3/4 at 23-1/8.

Staples (Nasdaq), down 1-1/4 at 22.

In an effort to help overcome antitrust regulators’ objections to their merger, the office supply retailers agreed to sell 63 stores to their biggest competitor, OfficeMax.

Black & Decker, up 2-3/8 at 33-3/8.

Smith Barney analyst David Dwyer raised his rating on the appliance and tool maker’s shares to “buy” from “outperform,” the Dow Jones News Service reported.

NASDAQ

Noven Pharmaceuticals, down 2-7/8 at 8-1/8.

The maker of drug-delivery systems expects to report losses and declining orders for the first half of 1997.

Access Health, down 7-39/64 at 14-57/64.

The provider of health care information cautioned that this year’s earnings will be below expectations.