Stocks Tumble For Second Straight Session

Stocks tumbled again Monday, sending the Dow Jones industrial average to its worst two-day slide since the crash of 1987 and firming beliefs the nearly 7-year-old bull market is finally suffering a correction.

The Dow lost 157.11, its sixth worst point-drop ever, closing at 6,583.48. The drop sliced the year’s gain to slightly more than 2 percent. Just three weeks ago, when it set an all-time high at 7,085.16 on March 11, the Dow was up nearly 10 percent on the year.

Broader stock measures also extended Thursday’s selloff, which was spurred by mounting fears the Federal Reserve will keep raising interest rates to slow the economy, muffling inflationary pressures, but choking company profits.

Regardless of what the central bank decides to do, the market’s steepening pullback, which has now sliced more than 7 percent off the Dow and other popular measures like the Standard & Poor’s 500 list, could shape up as the first full-fledged “correction” - usually a drop of at least 10 percent - since the Persian Gulf crisis of 1990.

Some of the stocks that moved substantially or traded heavily Monday.

NYSE

Columbia/HCA, down 3-7/8 at 33-5/8.

The nation’s biggest hospital company, dogged by revelations of a federal probe into possible Medicare fraud at the company’s Texas operations, was downgraded by PaineWebber and Goldman Sachs, the Dow Jones News Service reported.

Reader’s Digest Association class A, down 4 at 28-3/4.

Reader’s Digest Association class B, down 2-7/8 at 27.

The publisher warned that earnings for its third quarter ending March 31 and its fiscal year ending June 30 will be below expectations. Reader’s Digest blamed lower than anticipated responses to many of its third quarter promotional mailings.

NASDAQ

Ascend Communications, down 11-1/4 at 40-3/4.

Cascade Communications, down 2 at 26-3/8.

Ascend agreed to buy Cascade for stock initially valued at $3.4 billion. Each Cascade share is to be swapped for 0.7 shares of Ascend. The deal is the latest among companies that make equipment used to link computers.

Belden & Blake, up 5-1/8 at 25-7/8.

Texas Pacific Group agreed to acquire the independent oil and gas exploration company for about $302 million in cash. Texas Pacific, a San Francisco-based investment partnership, is offering $27 for each share of Belden.

AMEX

Paxson Communications, up 1-3/4 at 10-3/4.

The Supreme Court upheld a 1992 federal law that requires cable television systems to carry local broadcasters, a decision that could mean survival for many small, independent stations.