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Stocks and bonds were slightly lower today after a slew of European central banks raised interest rates, reducing investors' expectations that lower borrowing costs would boost profits.

Rising interest rates overseas came one day after Federal Reserve Chairman Alan Greenspan roiled U.S. stock and bond markets by warning that inflation may become a problem because the U.S. job market is so tight.

"The Pied Piper spoke, and everybody is following his lead," said Charles Smith, chief investment officer at Fort Pitt Capital Group in Pittsburgh. "If investors think interest rates are going up, they jump out."

At 3 p.m. the Dow Jones Industrial Average was off 29.96 points to 8,065.10, pulling up from an early steep dive of 92 points.

The yield on the benchmark 30-year Treasury bond rose to 6.38 percent from 6.37 percent after Germany's Bundesbank unexpectedly boosted its securities repurchase rate to 3.30 percent from 3.00 percent for the next two weeks. The Bank of France followed, raising its intervention rate to 3.30 percent from 3.10 percent.

In addition, central banks in Denmark, Austria, Netherlands and Belgium also boosted key borrowing rates. The moves make dollar-denominated securities comparatively less attractive to investors, which could erode demand for U.S. stocks and bonds.

General Electric rose 3/4 to 71 1/4 after reporting a third-quarter profit of $2.01 billion, or 62 cents a share, topping forecasts by a penny.

Rational Software Corp. tumbled 2 5/8 to 9 3/4 . The company said it expects revenue and profit growth to be below forecasts through March 1999.

Axiom Inc. tumbled 6 to 9 1/8 after the provider of data-collection and telecommunications systems said it expects a profit of 8 cents to 13 cents a share for the fourth quarter, well below the 43 cents analysts expected.

RockShox Inc. dropped 3 to 11 1/4 after the maker of bicycle-suspension products said it expects earnings to fall to 24 cents to 26 cents a share for the second quarter. The company was expected to earn 31 cents a share.

Ford rose 3/4 to 49 after saying it would spin off its 80.7 percent stake in its consumer finance unit, Associates First Capital Corp.

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