Stocks Tumble As Budget Stalemate Goes On

Stocks ended sharply lower Thursday along with bond prices, erasing early gains, in response to a fresh breakdown in budget negotiations in Washington.

The Dow Jones industrial average ended down 20.23 points at 5,173.84. The blue chip average rose as much as 32 points in the morning, and it slumped as much as 55 points in the afternoon, before recouping more than half the day’s losses.

The Dow’s loss was serious enough to prompt the New York Stock Exchange to curb computer-driven program trading, which traders said was responsible for a large portion of the afternoon’s losses.

Decliners led advancers by 8 to 5 on the New York Stock Exchange. Volume was heavy at 512.51 million shares as of 4 p.m., up substantially from Wednesday’s pace.

The market retreat was aggravated by a continuing sell-off of technology shares. Broad market indexes, where tech shares are heavily represented, fell sharply.

Market analysts were unstinting in their criticism of the budget impasse.

“It is seeping into the market’s consciousness that what we have in Washington is restrained chaos,” said Michael Metz, Oppenheimer & Co.’s top market strategist.

Some of the stocks that moved substantially Thursday:

NYSE

Tandy fell 4-3/4 to 35-1/8.

The Fort Worth-based computer maker and retailer said December sales at stores open at least a year rose 2 percent, while total sales rose 18 percent over a year ago. Citing poor holiday sales, the company revised 1995 earnings growth estimate to between 7 percent and 10 percent, but declined to provide a previous growth estimate.

Musicland Stores Corp. fell 5/8 to 3-3/4.

The Minneapolis-based music and video retailer said fourth-quarter earnings would be disappointing because of weak December music sales.

NASDAQ

FTP Software fell 13-3/8 to 11-7/8.

The company warned late Wednesday that its fourth-quarter earnings would be disappointing, and Alex. Brown downgraded the stock.

Gymboree fell 2-5/8 to 14-7/8.

The children’s clothing retailer said weak December sales will push earnings to between 30 cents and 32 cents a share for the quarter ending in January, compared with analysts’ consensus of 36 cents.

AMEX

Competitive Technologies rose 1-3/4 to 12-1/2.

The Westport, Conn., biotechnology company will begin to get royalty payments on U.S. sales of Johnson & Johnson’s version of Retin-A medicine to reduce wrinkles.