STOCK prices fell in New York yesterday in sympathy with bonds, amid concerns that mounting economic strength might prod interest rates higher.

Leading the Dow industrials lower yesterday was J P Morgan, down more than a point. Banking stocks often fall if traders expect interest rates to rise.

Oil stocks also dropped among the Dow industrials.

But cigarette maker Philip Morris, another Dow index component, was up sharply, in the highest volume on the New York Stock Exchange. Tobacco stocks rose after an Indianapolis jury on Friday denied damages to the family of a heavy smoker who died of lung cancer.

Meanwhile, proposed federal legislation would protect cigarette makers from smoking liability lawsuits and Food and Drug Administration regulation, in exchange for yearly payments into anti smoking efforts and healthcare programmes.