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Nervous stock market tumbles 48 points

The stock market dropped sharply Friday, unsettled by worries about the banking industry and prospects in the Persian Gulf. The Dow Jones average of 30 industrial stocks fell 48.02 points to 2,436.14, finishing the week with a loss of 84.65 points.

Declining issues outnumbered advances by more than 3-to-1 in nationwide trading of New York Stock Exchange-listed stocks, with 364 up, 1,164 down and 451 unchanged.

Oil prices fluctuated erratically amid intensifying speculation that the showdown in the Persian Gulf might be moving closer to open conflict.

Analysts said that gave little encouragement to investors already worried about the shaky state of the domestic economy.

Sharply higher costs for gasoline, heating oil and a wide range of other goods are expected to act as a drag on consumer spending and business investment at a time when the economy is already burdened with debt problems and a battered real estate market.

Brokers said traders seemed to have grown increasingly uneasy about the health of many large banks.

Manufacturers Hanover fell 3 to 17 after remarks by a company official that were interpreted as raising the possibility of a dividend reduction.

Among other prominent commercial banking issues, Citicorp dropped one-half to 11[; Chase Manhattan one-quarter to 11~; Chemical Banking 1 to 11\; BankAmerica 1[ to 18}; NCNB 1 to 17~, and Security Pacific 1| to 18|.

Dime Savings Bank of New York tumbled 1\ to 2|. The company posted a $153.62-million loss for the third quarter,

citing an increase in its loan-loss reserve, and suspended its dividend.

Elsewhere in the financial-services sector, American Express fell 1[ to 18|; Primerica 2 to 19, and Merrill Lynch 1} to 17~.

But Aetna Life & Casualty, which reported lower third-quarter earnings and announced plans for an overhaul of its operations, rose one-quarter to 31.

Unisys led the active list, down 1[ at 2\. On Thursday, the company reported a loss of $356.8-million for the third quarter and said it might be in the red for the fourth quarter as well.

Volume on the floor of the New York Stock Exchange came to 130.19-million shares, down from 141.46-million in the previous session. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 171.59-million shares.

As measured by Wilshire Associates' index of more than 5,000 actively traded stocks, the market lost $47.16-billion, or 1.63 percent, in value.

The NYSE's composite index of all its listed common stocks dropped 2.80 to 166.71.

Standard & Poor's industrial index fell 6.34 to 358.50, and S&P's 500-stock composite index was down 5.46 at 304.71.

The NASDAQ composite index for the over-the-counter market dropped 5.38 to 334.36. At the American Stock Exchange, the market value index closed at 291.39, down 1.39.