NEW YORK -- U.S. stocks fell yesterday amid concern that the dollar's collapse will prevent the Federal Reserve from taking new steps to cut interest rates.
The Dow Jones industrial average fell for a fourth straight session, declining 25.93 points to 3228.17 -- its lowest close since April 9.
Declining common stocks outnumbered advancing issues by more than 4-to-1 in moderate trading on the New York Stock Exchange.
Standard & Poor's 500 index slid 4.13 to 410.72, and the NASDAQ Combined Composite dropped 8.32 to 555.38.
"The dollar is the No. 1 problem facing the stock and bond markets right now, but it isn't the only problem," said Jon Groveman, president of Ladenburg, Thalmann & Co.
Beside a weak dollar, government bond yields are rising, the economic recovery is sluggish and the U.S. political situation is confused. "It isn't hard to see why stocks are falling," Mr. Groveman said.
The dollar sits at its lowest level relative to the German mark, despite repeated intervention by the world's central banks to support the currency. The dollar's weakness stems from the faltering U.S. economy and low interest rates.
"It's unlikely the Fed's going to do anything [to lower rates]," said Thomas Bonen, an analyst at Barclays de Zoete Wedd Securities. Another interest rate cut would only widen the interest rate gap between low U.S. rates and high European rates, weakening the dollar even more.
U.S. stocks also were hurt yesterday by the slump in European stock markets, traders said.
Insurance stocks were lower on concern about heavy costs tied to Hurricane Andrew, which slammed into southern Florida early yesterday.
Geico Corp. fell 3/8 to 57 1/8 , Progressive Corp. declined 1/8 to 63 3/8 , Travelers dropped 1/2 to 20 5/8 , Aetna slid 1 to 39, Cigna fell 5/8 to 51 and Ohio Casualty declined 3/4 to 62 1/4 .
Wang Laboratories, Imatron Inc., RJR Nabisco Holdings, Ford Motor Co. and General Motors were the five most actively traded issues on the U.S. composite.
Imatron gained 13/32 to 1 21/32 on reports that the company is developing a scanner that detects the buildup of fatty plaque in coronary arteries.
General Motors fell 1 3/8 to 34 on concern about a slowdown in auto production and reports that workers may take steps to contest a plan by the company to make some salaried employees pay for part of their health benefits.
Ford declined 1 3/4 to 38 3/4 amid concerns about the auto industry's plan to cut third-quarter production.
Disney fell 7/8 to 32 7/8 after Salomon Brothers strategist David Shulman removed the stock from his recommended list.