Stocks Drop 2

NEW YORK Stocks retreated today in subdued trading ahead ofPresident Bush's speech this evening before the Republicanconvention.

The Dow Jones average of 30 industrial stocks slipped 2.17points to close at 3,304.89.

Volume on the floor of the New York Stock Exchange was 184.5million shares. Declining shares outnumbered advancing ones on theNYSE, with 761 up, 942 down and 610 unchanged.

"There's a general nervousness in the market," said MichaelMetz, managing director with Oppenheimer & Co. "Fears about theelection and about the strength of the economy are temperingenthusiasm."

Many investors were waiting on the sidelines to see what Bushwould say in Houston and whether the acceptance speech would boosthis standing in the polls, traders said. Wall Street tends to favorRepublican administrations.

On Wednesday, the Dow fell 22.42 points to 3,307.06 in a lateselloff linked to rumors that sent bank shares tumbling.

Bank stocks recovered some ground in trading today. Citicorpwas the most active issue, up 5/8 at 17 3/8. Chemical Bank was up3/4 at 33 1/2, BankAmerica was up 1/2 at 43 5/8 and Chase Manhattanwas up 1 1/4 at 23 7/8.

The market appeared to ignore today's government reading on initial jobless claims, whichsoared by 71,000 in the week ended Aug. 8 to 474,000.

The report, however, was within forecasts by private economistsand reflected the second round of filings after General Motors'two-week shutdown.

The U.S. dollar fell against other major currencies today inEuropean trading.

In Tokyo, the dollar fell to a closing 126.37 Japanese yen from 126.41 yen at Wednesday'sclose. Later, in London, it rose to 126.50 yen.

In London, the British pound rose to $1.9371 from $1.9355 lateWednesday.

Other late dollar rates in Europe, compared with late Wednesday,included: 1.4520 German marks, down from 1.4530; 1.2955 Swiss francs,down from 1.3020; 4.9280 French francs, down from 4.9315; 1.6360Dutch guilders, down from 1.6375; 1,103.25 Italian lire, down from1,103.50, and 1.1917 Canadian dollars, down from 1.1977.

Gold fell in London to a late bid of $337.35 a troy ounce, downfrom $338.45 bid late Wednesday. In Zurich, the metal fell to aclosing bid of $337 an ounce from $338 bid late Wednesday.

Silver bullion fell in London to a late bid of $3.74 a troyounce, down from $3.80 bid late Wednesday.