Computer Issues Take Beating; Dow Up 0.55

The stock market posted a tiny gain Tuesday, rebounding from an early price decline but unable to mount a serious resumption of its early 1985 rally.

Several computer issues fell sharply in the wake of lowered earnings expectations, but auto, brokerage and airlines stocks posted modest gains.

The Dow Jones average of 30 industrials, which tumbled 13.91 on Monday, finished up 0.55 at 1,276.61.

The widely watched market measure had been down more than six points after the first half-hour of trading and was up nearly 3 points in the early afternoon.

Advancing issues outpaced declines eight to seven on the New York Stock Exchange, whose composite index rose 0.07 to 104.57.

Big Board volume was 111.12 million shares, compared to 104.00 million shares on Monday. Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 133.73 million shares.

Trading Was Muted

Analysts said trading was somewhat muted because many major U.S. banks and the government bond market were closed in observance of Lincoln’s birthday.

“The market is acting pretty well except for the high-technology sector,” said Carolyn Cole, who follows the market for the investment firm Paine Webber Mitchell Hutchins.

She said her firm feels that the market is in the midst of a sustained upward drive and that Monday’s decline was a “pause” in the 5-week-old rally.

But Michael Metz, senior vice president and market strategist for Oppenheimer & Co., said the less-favorable earnings outlook for some widely known computer stocks is making some institutions reassess the outlook for other stocks.

“We are seeing a shift in institutional attitudes here,” Metz said. “It doesn’t look terribly bright for the next few months.”

In addition, Metz said the recent slide in the bond market may be dampening investor enthusiasm for stocks as well.

Data General Plunges

Data General led the list of most actively traded stocks on the NYSE, falling 14 1/8 to 58 3/4 after the company reduced its earnings projection. International Business Machines, which finished off 3 3/4 on Monday after two brokerage houses lowered their earnings forecasts for the company this quarter, was down another 1 3/4 at 131 3/4. It unveiled the first two models of its new generation of mainframe computers and cut prices on selected versions of its current top-of-the-line computers.

Also in the technology group, Digital Equipment was down 4 7/8 at 117, NCR was down 5/8 at 29, Texas Instruments was down 3 1/2 at 121 3/4 and Hewlett Packard was off 1 1/8 at 36 1/2.

Unocal was the second-most actively traded issue on the NYSE, falling 2 to 47 1/2. Its chairman had said on Monday that the company is not for sale.

Phillips Petroleum, fighting a takeover bid, was third-most actively traded, finishing unchanged at 50. Investor Carl Icahn made a new bid for Phillips, offering $60 a share to buy 70 million shares of the company’s stock.

If successful, Icahn would raise his stake in Phillips to just over 50% of the shares. He said he then would acquire the remaining 77.1 million shares for securities with a value of $50 a share.

Auto Issues Gain

In the auto group, Ford was up 5/8 at 45 7/8, General Motors rose 1 to 79 3/4 and Chrysler was up 1/2 at 33 1/2.

Among other actively traded issues, American Telephone & Telegraph was down at 20 7/8, Bell South was up 3/8 at 36 1/8 and ITT Corp. was up 5/8 at 33 1/2.

Standard & Poor’s index of 400 industrials fell 0.13 to 201.72, and S&P;’s 500-stock composite index was up 0.05 to 180.56.

At the American Stock Exchange, the market-value index fell 0.33 to 229.20. The NASDAQ composite index for the over-the-counter market closed at 286.57, down 0.86.

The Wilshire index of 5,000 equities closed at 1,865.617, up 0.536.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,218, compared to 1,956 on Monday.

Bond prices were unchanged to slightly lower in a session abbreviated because of a holiday. The U.S. government bond markets were closed in observance of Lincoln’s birthday as were several major banks and the New York Federal Reserve Bank.

Corporates Unchanged

In corporate trading, industrials and utilities were unchanged, according to the investment firm Salomon Bros. Inc.

Among tax-exempt municipal bonds, general obligations were unchanged and revenue bonds were off point, or about $2.50 for every $1,000 in face value.

Meanwhile, Federal Reserve Board policy-makers gathered in Washington to begin a private, two-day meeting at which they are to review their strategy for 1985. Most analysts said they expect no significant changes in Fed policy to emerge from the meeting.