Dow Drops 35.15 as 2-Day Rally Fizzles

NEW YORK —  Stock prices fell sharply on Wall Street today as rising oil prices, disappointing earnings reports and federal budget bickering punctured the stock market’s two-day rally.

The Dow Jones industrial average fell 35.15 points to close at 2,381.19. Volume on the New York Stock Exchange was moderate at 149.57 million shares, while losing issues outpaced gainers by 5 to 2.

Today’s decline brought Wall Street’s two-day rally to an end. The Dow Jones industrial average had gained more than 51 points over Friday and Monday.

Stocks meandered for the first half of the session, but then took a downward turn as oil prices advanced. The November contract for delivery of light, sweet crude oil rose 90 cents to $38.85 a barrel on the New York Mercantile Exchange.

The price fall-off continued as third-quarter earnings results flowed in.

Among the casualties were companies that announced their results today, but even firms that have yet to release their figures were hit. Just the fear of lower earnings was enough to make some traders sell, analysts said.

Citicorp, the most actively traded issue on the NYSE, fell 1/4 to 13 7/8 after announcing its third-quarter earnings fell 38% because of problem loans.

General Electric tumbled 1 1/2 to 52 7/8 after announcing its third-quarter results.

However, some stocks jumped on earnings announcements. Honeywell gained 2 1/8 to 74 1/4 after reporting that its third-quarter results rose.

Computer-driven program trading also caused the 30-share index to lose much of the 51 points it had gained the prior two sessions.

Analysts also said many traders were on the sidelines, waiting for September consumer price figures and the August trade deficit report due out Thursday morning.