STOCKS closed lower for the second day in a row yesterday as new economic data showed the slowdown that analysts have been expecting in the third quarter may not be kicking in.

On Wall Street, the Dow Jones average of 30 industrial stocks dropped 31.44 points to close at 5.616.21.

The data raised new fears that the Federal Reserve Board will raise interest rates next month to cool growth and forestall inflation.

Declining issues outnumbered advancers by about a 9 to 5 margin on the New York Stock Exchange, where volume totalled 256.95 million, against 321.10 million on Thursday.