Stocks Make Scattered Gains; Dow Rises 2.54

The stock market eked out some scattered gains Wednesday, halting the decline of the past three sessions.

The Dow Jones average of 30 industrials, off 17.33 in the three previous trading days, rebounded 2.54 to 1,283.13.

Volume on the New York Stock Exchange reached 118.21 million shares, up from Tuesday’s six-week low of 90.40 million. Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 142.38 million shares.

Traders appeared to react cautiously to comments by Paul A. Volcker, chairman of the Federal Reserve Board, in testimony before the Senate Banking Committee.

Volcker said the Fed, after easing credit conditions late last year, was no longer following that policy. But he said the central bank was not tightening credit either.

He also repeated his recent optimistic views about the inflation outlook. “I sense some chance of further progress toward price stability this year even as the economy grows,” he said.

Bond Prices Dive

Bond prices fell sharply in response to Volcker’s testimony.

Analysts said investors interpreted his remarks as a signal that interest rates were unlikely to post any further significant declines in the near future.

Among the day’s most actively traded stocks, International Business Machines rose 1 7/8 to 133 3/4. The company predicted a “solid” year despite some difficulties in the first half and said its outlook for 1986 was “even stronger.”

Unocal climbed 1 to 46 7/8. A partnership led by T. Boone Pickens, chairman of Mesa Petroleum, said it increased its interest in Unocal to 8.5% from 7.9% of the total shares outstanding.

Stauffer Chemical rose 1/8 to 27 1/8 and Chesebrough-Pond’s gained 3/4 to 34. On Tuesday, the two companies agreed on a plan for Chesebrough-Pond’s to acquire Stauffer for $28 a share.

In the auto group, Ford Motor dropped 1/2 to 44 7/8, Chrysler rose 1/8 to 33 and General Motors was unchanged at 78 5/8. A group of Cabinet advisers recommended Tuesday that President Reagan allow restraints on Japanese auto imports to expire as scheduled March 31.

Kaufman & Broad, which projected record pretax earnings for its current fiscal year, picked up 1 to 19 3/8 to rank among the day’s biggest percentage gainers.

Separately, the Treasury Department sold $9 billion in two-year notes at an average yield of 10.12%, up from 9.83% at the last two-year note auction Jan. 31 and the highest since 10.47% at a two-year note auction Nov. 30, 1984.

In the secondary market for Treasury bonds, prices of short-term governments fell point, intermediate maturities were off by between 1/2 point and 1 point and long-term issues were down as much as 1 3/8 point, according to the investment firm of Salomon Bros. Inc.

Corporates Decline

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

In corporate trading, industrials and utilities were down 3/4 point in moderate trading. Among tax-exempt municipal bonds, general obligations were off 1/2 point and revenue bonds were down 5/8 point.

Yields on three-month Treasury bills rose 7 basis points to 8.25%. Six-month bills rose 9 basis points to 8.35%, and one-year bills were up 8 basis points at 8.53%.

Yields on 30-year Treasury bonds rose to 11.54% from 11.37% late Tuesday.

The federal funds rate, the interest on overnight loans between banks, traded at 8.675%, unchanged from late Tuesday.