Stock Market Mixed; Dow Index Gains 1.11

The stock market turned in a mixed performance Tuesday as traders were hit with a surprise switch in the Reagan Administration lineup, a swap of jobs by the Treasury secretary and White House chief of staff.

“Wall Street was a little confused by it all,” said William LeFevre, an analyst at Purcell, Graham & Co.

The Dow Jones average of 30 industrials, up 5.63 points Monday, gained another 1.11 points to close at 1,191.70. Earlier in the session, the blue-chip average had been up as much as 4.64 points.

More than eight stocks rose in price for every seven that fell on the New York Stock Exchange.

But several broad indexes of stock-market activity declined.

Monday’s advance, the first gain of the new year, came as hopes brightened for additional declines in interest rates and for continued moderation in inflation.

But even though bond-market interest rates fell again Tuesday, there was uncertainty about the Cabinet shake-up and worries about the coming round of corporate earnings reports.

Just before the start of Tuesday’s session, President Reagan announced that his chief of staff, James A. Baker III, and his Treasury secretary, Donald T. Regan, were trading jobs.

“The stock market was befuddled by the side-door shuffle,” LeFevre said. “A lot of the day was spent figuring out what does it all mean.”

Diamond Shamrock, the most active NYSE issue, tumbled 1 7/8 to 18 1/8, with almost 3.7 million shares changing hands. Occidental Petroleum rose 1 to 25.

Big Board volume rose to 92.11 million shares from 86.19 million Monday.

For the most part, analysts said, major stock swings resulted from developments affecting individual companies rather than broad trends.

Teledyne, which plunged 11 7/8 on Monday following a disappointing earnings report, fell another 8 7/8 to 232 3/4.

Holiday Inns, which said it plans to buy back up to 28.6% of its outstanding stock, climbed 2 3/8 to 46 3/8.

Unidynamics, the object of a takeover bid by Nortek, jumped 5 1/2 to 22 3/8. Nortek rose 1/8 to 15 3/8.

Bond prices rose as rates on short-term Treasury securities edged lower.

Another closely watched short-term interest rate--that charged on overnight loans between banks and called the federal funds rate--climbed to 8.5% from 8.25% late Monday.

In the secondary market for Treasury bonds, prices of short-term governments rose 2/32 point, intermediate maturities rose between 7/32 point and 14/32 point, and long-term issues were up about 20/32 point.

In corporate trading, industrials and utilities rose 1/2 point in moderate trading.

Among tax-exempt municipal bonds, general obligations and revenue bonds rose 3/4 point. Trading also was moderate.