Stocks erased substantial early gains in New York yesterday as investors, made nervous by a warning from a Federal Reserve official that the United States' economy could not continue to grow at its current pace, sold their holdings and took profits.

On Wall Street, the Dow Jones industrial average rose 2.84 at 9,184.27. The blue-chip index had gained as much as 168.64 to 9,350.07 in the morning, threatening to challenge its record closing high at 9,374.27 last November 23rd.

The blue-chip index finished 1998 with a gain of 16.1 per cent the fourth straight year that it rose 15 per cent or more.

Advancing issues outnumbered decliners by a 6-to-5 margin on the New York Stock Exchange, with 1,746 up, 1,447 down and 407 unchanged. NYSE volume totalled 875.2 million shares, against 726.14 million in the previous session.