Stock prices settled for a mixed showing Tuesday after making an unsuccessful run at a record high in the Dow Jones industrial average.
Energy stocks involved in takeover news and speculation held the spotlight in a busy session on Wall Street.
The Dow Jones average of 30 industrials, after moving several times past the all-time closing high of 1,292.62 reached a week earlier, settled back to finish with a loss of 4.85 points at 1,285.23.
In a pattern that has become familiar to investors in recent weeks, other market gauges made up of broader samples of stocks showed gains while the Dow lagged.
Volume on the New York Stock Exchange reached 143.90 million shares, against 113.72 million Monday.
Analysts said there were no special news developments driving the market. Many traders were impressed when stock prices advanced broadly Monday, defying many expectations of a pullback after their sharp rise in January.
Investors have appeared lately to be buying stocks as an alternative to interest-bearing vehicles such as bonds and money-market mutual funds because falling interest rates have lowered their yields to relatively unattractive levels.
Stocks have also benefited lately from reports that the debt problems of several developing countries have eased significantly. It has long been feared that those problems might sooner or later put a severe strain on the international financial system.
But the market also has been faced with selling by traders eager to cash in on its recent gains.
Phillips Petroleum led the NYSE active list and climbed 3 1/8 to 50 on turnover of more than 5.1 million shares.
Right behind Phillips among the volume leaders was Unocal, up 5 3/8 at 47 3/4. There has been widespread talk on Wall Street that T. Boone Pickens, chairman of Mesa Petroleum, is readying a bid for the Los Angeles-based company, parent of Union Oil Co. of California.
KN Energy, meanwhile, picked up 3 7/8 to 39. Mesa disclosed that it had bought 7.2% of KN's stock and might expand its holding to 10% "for investment purposes."
Mesa shares gained 1 to 18 7/8.
Auto stocks didn't fare so well as the domestic car makers posted a 4.1% sales decline for the final 10 days of January. General Motors dropped 1 5/8 to 81, Ford Motor fell 1 to 46 3/4 and Chrysler dropped 7/8 to 33.
In the daily tally on the Big Board, advancing issues outnumbered declines by about five to three, and the exchange's composite index rose 0.26 to a record 104.42.
Most bond prices rose in quiet trading as a key short-term interest rate fell and as investors bid actively in the opening round of the Treasury Department's latest borrowing binge.
The Treasury Department said it 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%.
Another $6 billion of 10-year notes is to be sold today and $5.75 billion of 30-year bonds will be sold Thursday.
Fed Funds Rate Falls
Meanwhile, the federal funds rate, the interest on overnight loans between banks and a peg for many other short-term interest rates, fell to 8.25% from 8.438% late Monday.
In the secondary market for Treasury bonds, prices of short-term governments were unchanged to up 2/32 point, intermediate maturities rose 1/8 point and long-term issues were up nearly 3/8 point.
In corporate trading, industrials and utilities rose 1/8 point.
Among tax-exempt municipal bonds, general obligations rose point and revenue bonds were unchanged.
Yields on three-month Treasury bills fell 3 basis points to 8.14%.