Stocks Drop Swiftly at Open but Stabilize

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Renewed fears over the repercussions from the near-collapse of hedge fund

Long Term Capital Management

helped send stocks down early on.

The

Dow Jones Industrial Average

was down 71 to 7931, having fallen as low as 7889.99. The

S&P 500

was down 8 to 1035, while the

Nasdaq Composite Index

was down 14 to 1706 and the

Russell 2000

was down 3 to 367.

Safety, safety, safety. The 30-year Treasury bond was recently up 20/32 to 105 23/32, yielding 5.12%. Still, that was well off the long bond's best levels of the morning.

Yesterday, the Dow fell initially on profit-taking. But its eventual hefty losses were attributed in large part to the Long Term debacle. Financial-services concerns were slugged over fears of their exposure to Long Term.

A bunch of banks and brokerage firms from the U.S. and overseas are infusing $3.75 billion into the fund in return for a 90% equity stake in Long Term, a Connecticut-based hedge fund. The fund was founded by former

Salomon Brothers

bond big

John Meriwether

.

UBS

said yesterday it will take a third-quarter charge, with part of the blame for the hit placed on its exposure to Long Term.

Meanwhile, in the background is Washington. The

House Judiciary Committee

said yesterday it will vote on Oct. 5 or 6 whether to begin a formal impeachment inquiry against

President Clinton

. If the panel approves going forward with the inquiry, a vote before the full House could follow on Oct. 8 or 9.

Most Up at Open -- NYSE

Anglogold (AU) - Get Report, up 1 1/4 to 13 3/8

:

Prudential Securities

upgraded the company to strong buy from accumulate.

Most Down at Open -- NYSE

Citicorp (CCI) - Get Report, down 2 3/8 to 97 1/2

.

Most Down at Open -- Nasdaq

NICE Systems ( (NICEY) NICEY ADR), down 13 1/16 to 16 3/4

: The Israeli company warned third-quarter earnings won't meet analysts' expectations.