Scandal, Asian Crisis Deflate Dow

Stocks fell for the third straight session Friday on worries that in addition to being hurt by the Asian fiscal crisis, the U.S. economy will be undermined by instability in the White House.

The Dow Jones industrial average fell 30.14 to 7,700.74 despite swinging from an early 46-point gain to an 88-point loss during the session.

The Dow, which has fallen 172 points in three sessions after rallying 119 points higher on Tuesday, lost 52.81 points for the week and is now down 207.51 for the new year.

Broader indicators also pulled back again, pressured by the nagging worries about how much the Asian crisis will hurt U.S. companies and mounting concerns over whether the latest allegations of sexual improprieties by President Clinton will impair government initiatives at home and abroad.

“The market hates uncertainty,” said Alfred E. Goldman, director of market analysis, A.G. Edwards & Sons Inc. in St. Louis. “When the word ‘impeachment’ is used, investors worry about what that will mean for the economy.”

Notably, the technology sector suffered only marginal damage despite another disappointing profit report from the group that cited the Asian crisis. Analysts said computerrelated shares have already been battered down to levels that are too appealing for bargain hunters to resist.

But financial shares, the other group considered particularly vulnerable to the turmoil overseas, took another drubbing: J.P. Morgan fell 3-7/16 to 88-7/16 as the Dow’s weakest component. Friday’s problem, however, may have been more a matter of domestic affairs than foreign, with interest rates taking a turn for the worse in the bond market.

Bonds were pressured by supply concerns in advance of next week’s auction of new Treasury securities, as well as this week’s unsettling developments in Washington, said Ned Riley, chief investment officer at BankBoston.

“Bonds needed an excuse to at least slow from the tremendous bull market it’s seen since last summer,” said Riley. “But the primary factors are still Asia and domestic economic environment.”

Stocks opened Friday higher after Asian markets finished a volatile week on an upbeat note. Tokyo’s main index rose 2.3 percent, Indonesia’s rose 1.7 percent and Hong Kong’s rose 0.4 percent after two days of sharp declines.

Declining issues outnumbered advancers by a 12-to-7 margin on the New York Stock Exchange, where volume continued at the hectic clip that’s characterized the market since the second trading day of the year. NYSE volume totaled 635.77, the 13th time in 15 sessions this year that more than 600 million shares have changed hands.

The Standard & Poor’s 500-stock list fell 5.45 to 957.59, and the NYSE composite index fell 3.11 to 500.68.

The Nasdaq composite index fell 0.58 to 1,575.93, and the American Stock Exchange composite index fell 3.98 to 661.63.

The Russell 2000 index of smaller companies fell 1.39 to 424.81.