Rash of Mergers Gives Investors Itch to Sell; Dow Index Falls 24.35

NEW YORK —  Stock prices tumbled Thursday in selling attributed to investors’ misgivings over the recent wave of corporate buyout bids.

The Dow Jones index of 30 industrials dropped 24.35 to 2,140.83.

Declining issues outnumbered advances by nearly 4 to 1 in nationwide trading of New York Stock Exchange-listed stocks. Big Board volume reached 196.54 million shares, up from Wednesday’s 181.55 million.

Huge bids for companies like RJR Nabisco and Kraft in recent days have stirred conflicting emotions on Wall Street.

While deals like these bring opportunities for large short-term profits, analysts said, they have also prompted widespread talk about the potential dangers of the new debt burdens created to finance the transactions.

News reports Thursday morning said investors apparently had balked at an offering of high-yield Federated Department Stores bonds arising from Campeau Corp.’s takeover of Federated last spring.

Caution Advised

First Boston Corp., the lead underwriter, said it had not withdrawn the offering but was engaged in discussions with the company to “restructure the transaction.”

Also, Chairman Alan Greenspan of the Federal Reserve Board said Wednesday that the Fed has advised banks to be cautious in their lending for buyouts.

RJR Nabisco shares dropped 2 3/4 to 82 and Kraft fell 3 to 94 1/2, ranking among the most active Big Board issues.

Kohlberg Kravis Roberts & Co., an investment firm seeking to acquire RJR, said it was “extremely confident” of getting financing for its bid.

Sears Roebuck, which had climbed sharply of late on talk of a possible restructuring or other transaction, lost 1 1/2 to 43.

Pillsbury, the target of a takeover bid by Grand Metropolitan PLC of Britain, dropped 2 1/8 to 58 7/8.

Hospital Corp. of America, which recently received a management buyout bid, fell 1 3/8 to 45. West Point-Pepperell, being sought by Farley Co., slumped 3 3/8 to 44 1/2.

Golden Nugget Gains

On the plus side, General Motors gained 2 7/8 to 80 1/2, helping to cushion the loss posted by the Dow Jones industrial average. The company reported third-quarter earnings of $2.46 a share, against $2.28 in the like period last year.

Golden Nugget rose 3/4 to 13 3/4. The company said directors approved a plan to repurchase as many as 5 million of its shares.

The NYSE’s composite index of all its listed common stocks dropped 2.20 to 156.17.

Standard & Poor’s industrial index fell 5.04 to 319.18, and S&P;’s 500-stock composite index was down 4.10 at 277.28.

The NASDAQ composite index for the over-the-counter market dropped 3.42 to 381.77. At the American Stock Exchange, the market-value index closed at 300.64, down 2.80.

On the Tokyo Stock Exchange, share prices closed higher Thursday but below their peaks and volume was strong as investors focused on large capital stocks. The Nikkei 225-share index gained 102.32 to close at 27,722.92.

Shares prices finished mixed on the London Stock Exchange as the government reported better-than-expected British trade figures. The Financial Times 100-share index rose 1.4 points to end the day at 1,852.1.