Blue-Chips Drop 114 Points

The liquidation of stocks on Wall Street eased somewhat Friday.

But the looming specter of a worldwide economic slowdown and its deflationary implications for corporate profits continued to haunt investors as a frustratingly long week drew to a close.

"The real reason that the markets are doing what they're doing is that it's starting to become more clear that the deflationary pressures from Asia have spread, perhaps to the U.S.," said Hugh Johnson, chief investment strategist at First Albany Corp. "Investors realize that the outlook for corporate profits has darkened."

The Dow Jones industrial average shed 114.31 points, or 1.4 percent, to 8,051.68. On Thursday, the index sank 357.36 points, or 4.2 percent, its third-biggest point loss in history. On a percentage basis, it was the worst loss for blue-chips since last Oct. 27's 7.2 percent massacre.

Although Russia remained at the forefront of Wall Street's radar screens Friday, a development in Japan's stock market was not lost on the financial community.

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In the U.S., Friday's fall seemed to contain little of Thursday's fury, with volume ebbing somewhat.

The breadth of the decline was also less severe than Thursday's, yet remained heavily tilted in favor of losing issues on both the New York Stock Exchange and Nasdaq Stock Market.

In a television address, Russian President Boris Yeltsin said he will not step down from his post, and said there will be a presidential election in 2000 as scheduled. He said he will not run in the election.

Some long-time bulls on U.S. stocks maintained a stiff upper lip.

"I think for the majority of investors, this is a great opportunity to put money to work," said Robert S. Robbins, market strategist at Robinson Humphrey Co. "The fundamentals don't strike me as being bear market-type fundamentals, as far as the blue-chip averages go."

"In our view, Russia has no remaining capacity to service external debt, no liquidity to service domestic government obligations, and no private sector sources of credit either at home or abroad," said Carl B. Weinberg, chief economist at High Frequency Economics Ltd.

"However, we don't see Russia's meltdown as a terribly huge near-term factor for companies or most banks outside of Russia," Weinberg said. "The impact of Russia's woes falls on those who loaned money to Russia and their intermediaries, a small subset of the global investment cmmunity."

Russia's benchmark RTS stock index rebounded 5.7 percent Friday, encouraged by higher prices in European equities.

In global markets Friday:

• In Asia, stock markets were down across the board. The sharpest losses were logged by the Philippines' PSE Composite, down 5.7 percent; Indonesia's Jakarta Composite, off 4.5 percent; and Thailand's SET index, 3.5 percent lower. Hong Kong's Hang Seng index gave back 1.2 percent.
• European bourses also closed lower. London's FTSE 100 index descended 2.2 percent, Frankfurt's DAX index surrendered 1.3 percent, and Paris' CAC 40 index dipped 1.0 percent.
• Latin American markets were mixed. Mexico's IPC index gained 3.1 percent and Brazil's Bovespa index of 58 stocks ascended 2.2 percent. But Venezuela's IBC index skidded 4.5 percent.

• The Standard & Poor's 500 Index fell 1.5 percent.
• New York Stock Exchange losers outdistanced winners by nearly 2.5 to 1.
• On the Big Board floor, turnover dwindled 10 percent to 847 million shares.
• The Nasdaq Composite declined 2.8 percent. Declining issues led advancers by more than 2 to 1 in the Nasdaq Stock Market. Volume totaled 895 million shares.
• The Russell 2000 Index of small-company stocks sank 2.1 percent.
• In the bond market, the 30-year Treasury advanced 1/32, to yield 5.347 percent.