Stocks Mostly Higher but Dow Declines 4.64

Stocks mostly advanced again today, although prices closed below their highs of the session.

The blue chips of the Dow Jones industrial average, meanwhile, lost ground for the second straight day.

The Dow Jones index fell 4.64 to 1,280.59 after losing 4.85 points Tuesday. The measure hit a record high 1,292.62 on Jan. 29.

Advances outpaced declines by about three to two on the New York Stock Exchange, but the NYSE’s composite index slipped 0.02 to 104.40.

Big Board volume totaled 140.98 million shares, against 143.90 million in the previous session.

At the American Stock Exchange, the market-value index rose 1.98 to 228.70.

Prices moved broadly ahead early in the session, but the rally stalled and the ratio of gainers to losers narrowed in the final two hours of trading.

Stocks have rallied strongly over the past month amid investor confidence about economic growth in 1985.

Prices also were supported by the recent drop in interest rates, which made interest-bearing investments such as bonds and money market mutual funds relatively less attractive.

Some credit analysts suggest the recent drop in interest rates might have bottomed. Short-term rates were little changed in the money markets today, however.

Bond prices were little changed in quiet, early trading as the government continued its heavy schedule of borrowing.

Short-term interest rates inched lower.

The federal funds rate, the interest on overnight loans between banks, traded at 8.1875%, down from 8.25% late Tuesday.

The Treasury Department was to auction $6 billion of 10-year notes later today and has scheduled the sale of $5.75 billion in 30-year bonds on Thursday.

On Tuesday, bidding was brisk as the government sold $7.3 billion in three-year notes at an average annual yield of 10.40%, the lowest yield for such an issue since the $9.48% of May, 1983. In the previous similar auction, three months ago, the average yield was 11.01%.

Both corporate and municipal bonds were unchanged in the early going today.

In the secondary market for Treasury bonds, prices of short-term governments were up 2/32 point, but medium-term issues were mixed, ranging from a rise of 1/32 point to a drop of 3/32 point, and long-term issues were unchanged to off 2/32 point, according to the investment firm of Salomon Bros. Inc.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

Yields on 30-year Treasury bonds were unchanged from late Tuesday at 11.29%.

Yields on three-month Treasury bills slipped 3 basis points to 8.11%. Six-month bills fell 3 basis points to 8.21% and one-year bills were off 2 basis points at 8.41%.