The stock market tumbled today, mirroring a plunge in bond prices and wiping out gains posted in the previous two, record-setting sessions. The Dow Jones average of 30 industrials, which struggled to reach its second consecutive post-crash high Wednesday, was down 37.69 points at 2,093.71 an hour before the closing bell. Volume on the Big Board came to 139.77 million shares. Losers led gainers by about 3 to 1 with 388 up, 1,105 down and 442 unchanged as of 3 p.m. on Wall Street. While the Dow was off the entire session, the key index fell through the psychologically important 2,100-point level in mid-afternoon. Analysts had hoped that the Dow was solidly above the mark and that it would serve as a floor for a further advance. Market watchers said the decline was triggered by disarray in the credit markets, which were reacting to an unsubstantiated report in a West Germany newspaper that indicated the central Bundesbank might be tightening monetary policy. ``There are some indications that Japan might be doing the same, and that says effectively that if the Federal Reserve wants to keep the dollar stable, it will not give interest rates much room to decline,'' said Hugh Johnson, senior vice president at Frist Albany Corp. The Treasury's bellwether 30-year issue was off 1\ points, or $12.50 per $1,000 in face value at midday. ``Everybody is picking up on its cue,'' Johnson said. The dollar also fell in value. ``Let's face it, it's the rates that call the turn,'' said Larry Wachtel, first vice president at Prudential-Bache Securities Inc. ``The whole stock market turns on interest rates.'' A pull-back in stock prices has been anticipated since the Dow has climbed more than 200 points in recent weeks. But analysts described today's drop, which was exacerbated by profit-taking, as jolting. ``In the last two days, the market's performance has been impressive,'' Johnson said. ``This just points out what thin ice we're on.'' Analysts fear a crack in the confidence that has been building, but lower stock prices also could bring out some bargain hunters. ``We would use any weakness as a buying opportunity,'' one trader said. Among actively traded issues, Texaco was down ] at 49{. The oil company, which will face off against Carl Icahn it its annual shareholders meeting Friday, announced a joint venture with a Saudi Arabian oil company. General Electric was off } at 42}. The company said it will acquire Borg-Warner's chemical division for $2.31 billion in cash. Elsewhere, Deere Co. was off 2\ at 46{, Philip Morris was off 1[at 83[, and Smithkline Beckman was off 8| at 46]. The pharmaceutical company predicted 1988 operating earnings will be below last year's levels. The NYSE's composite index of all its listed common stocks fell 2.41 at 152.26. At the American Stock Exchange, the market value index was off 2.02 at 306.76.
