FINANCIAL MARKETS : Dollar Takes Another Fall; Dow Tumbles 16.25 Points

The battered dollar fell again Tuesday, approaching its all-time low of 80 yen, and worries about the weakened currency’s effect on corporate profits sent Wall Street stocks lower.

The Dow Jones industrial average closed down 16.25 points at 4,179.13.

Long-term bond yields rose slightly, but short-term Treasury bill yields fell to their lowest levels since September.

Silver prices, though, soared to their highest levels in five years.

The dollar, which has recently hit historic lows against the Japanese yen, dropped on concerns that auto trade talks between the United States and Japan may have stalled.

By late trading in New York, the dollar was at 80.75 yen, well within reach of the 80.15-yen postwar low set April 10. It was at 82.05 yen in New York late Monday. The dollar also fell to 1.3528 German marks from 1.3688 marks late Monday.

Tough talk from U.S. officials, frustrated by the lack of progress in nearly two years of negotiations with Japan on auto trade, weighed heavily upon the dollar.

The concerns about the dollar spilled over into the stock market as investors worried that the weakened currency would begin to cut into U.S. corporate earnings. Investors also were taking profits since the market’s recent run-up to record highs.

March

The Standard & Poor’s composite index of 500 stocks fell 0.76 point to 505.37. The Nasdaq index fell 5.08 to 825.74.

In overseas markets, London’s FTSE-100 closed down 14.3 points at 3,194.5 on light volume. Tokyo’s 225-share Nikkei average closed down 79.04 points at 16,225.11.

Among the stock market highlights:

* Johnson & Johnson jumped 2 1/8 to 62 5/8 after its first-quarter profits came in well ahead of Wall Street forecasts.

* Texas Instruments and Intel both reported quarterly earnings that exceeded analysts’ forecasts. Texas Instruments gained 1 5/8 to 93 5/8, and Intel, which reported its earnings Monday, added 5/16 to 94 5/16.

* Bank stocks gained on strong earnings reports. Chase Manhattan gained 2 1/8 to 44 3/4, and Wells Fargo jumped 7 to 167, a record high. Bankers Trust New York added 1 1/4 to 54 1/4 even though the bank reported a record loss of $157 million for the first quarter because of bad bets in Latin American securities.

* Procter & Gamble and TheraTech said they will develop and market hormone replacement skin patches for women. TheraTech gained 1 1/2 to 13 1/2, and P&G; finished up 1 1/4 to 67 7/8.

* Lincare Holdings shot up 4 5/16 to 33 10/16 on news that Coram Healthcare would acquire the firm in a stock swap.

* Shares of gold companies rose. American Barrick gained 7/8 to 25 5/8, Placer Dome rose 3/4 to 25 3/8, ASA added 5/8 to 47 3/8 and Vaal Reefs was up 3/16 to 7 3/16.

In the bond market, the yield on the 30-year Treasury bond rose to 7.39% from 7.37% on Monday. Analysts said bonds got a lift in mid-morning trade from a surprisingly sharp drop in March housing starts, but that was later outweighed by fears of inflation.

Yields on six-month Treasury bills fell to 5.94%, and one-year yields dropped to 6.13%.

The rise in the price of precious metals, which are usually seen as inflation barometers, sent at chill through the market, traders said. Silver prices soared for the second consecutive session, buoyed by optimism about global economic activity and the weak dollar and talk of buying by influential trading firm Phibro.

Most-active May silver jumped 14 cents to $5.865 an ounce, the highest price for an active contract since November, 1989. The rally in silver has carried the market up 27% in the past three weeks.

June gold rose $1.30 to $397.80 an ounce.

Market Roundup, D6