NEW YORK -- U.S. stocks, buffeted by a late round of computer-guided sell orders, closed lower for the fourth straight session yesterday.
The Dow Jones industrial average dropped 11.88 to 3292.30, led by Allied-Signal, Aluminum Co. of America, and General Electric.
Standard & Poor's 500 index dipped 0.89 to 432.84. Tobacco, food, chemical and automobile stocks led the decline, according to Bloomberg calculations. The NASDAQ Combined Composite Index slipped 1.06 to 654.73.
"We're at a stage where everybody's loaded up and waiting for the year-end rally," said Thomas Gallagher, managing director in charge of capital commitment at Oppenheimer & Co. "There's too much complacency" for the market to sustain a rally, he said.
In the absence of economic news, investors sought direction from President-elect Bill Clinton's economic meeting in Little Rock, Ark., and from the bond market, traders said. Short-term Treasury notes dropped for the fourth straight session because people expect the new administration to sell more short-term securities than long-term securities to reduce interest costs to taxpayers.
"A lot of people are ambivalent," said Richard Ciardullo, director of trading at Eagle Asset Management. "You've got the economic summit going on, and bonds are weak."
In addition, the recent flood of initial public offerings has sapped the market of its buying power for the time being, some traders said. "The [new equity] calendar was very heavy last week, and it's very heavy this week," Mr. Ciardullo said. "You can't fight the trend."
Buoyed by computer-guided buy orders, the Dow recovered from an opening slump to rise as high as 3316.78 yesterday morning, before retreating around midday.
"The further the market gets above 3300, the more resistance it finds," said Kenneth Ducey, director of trading at BT Brokerage. "Most people feel a little more confidence [in the economy]. They're waiting to see the consumer step up to the plate."
Decliners led advancers by a margin of 8 to 6 among common stocks on the New York Stock Exchange. Trading was more active than Friday, when a storm in the Northeast interfered with commuting and caused some people to leave work early. Still, Big Board turnover of about 185 million shares fell far short of the pace of recent weeks.
The yield on the benchmark 30-year bond rose 1 basis point to 7.45 percent.
"I think the bulls have to be disappointed," said Mr. Gallagher of Oppenheimer. "They thought what happened Friday with over-the-counter stocks was the end." After sliding for four sessions, the NASDAQ Composite stands 1.9 percent below its record closing high of 667.12 set Dec. 8.
The Dow Jones transportation index tumbled 14.71 to 1396.83. The American Stock Exchange Market Value index dropped 0.82 to 392.56.