Market Stages Broad Retreat; Dow Falls 9.83

The stock market turned downward Monday, retreating from last week’s new high near the 1,300 level in the Dow Jones industrial average.

Issues involved in takeover developments provided most of the excitement in a session of moderately active trading.

Dow Jones’s average of 30 blue chips, which wound up last week at a record closing high of 1,299.36, dropped back 9.83 to 1,289.53.

The widely recognized indicator has surpassed 1,300 in the midst of a trading day at least four times since late January but has quickly fallen back on each occasion.

Monday’s volume on the New York Stock Exchange came to 102.08 million shares, down from 139.87 million Friday. Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 129.67 million shares.

Investor Confidence Strong

Analysts said investors’ confidence about the economic outlook seemed to remain strong.

A monthly survey of purchasing executives found a “healthy increase” in new orders last month, along with small increases in production and employment. The respondents to the survey also reported widespread evidence that inflationary pressures remained subdued.

But some traders evidently continued to regard the Dow 1,300 level as a cue to sell.

Stock prices, which were held back in February by an upswing in interest rates, again got no help from the credit markets. Prices of long-term government bonds, which fall when rates rise, dropped about $5 for every $1,000 in face value.

Phillips Petroleum led the NYSE active list, up 3/4 at 50 1/8. Over the weekend the company made a sweetened offer to its shareholders to stave off a takeover bid by a group led by financier Carl Icahn.

On Monday, Phillips said it had settled its battle with Icahn and that he was withdrawing his offer for Phillips stock.

ITT gained 2 to 32 1/8, while Sperry fell 1 7/8 to 51 1/8. The companies said they called off merger discussions.

American Natural Resources, which is the target of a $60-a-share takeover bid by Coastal Corp., jumped 6 to 60.

Hoover Universal Jumps

Hoover Universal, which plans a merger into Johnson Controls in a transaction involving cash and stock, climbed 5 7/8 to 34 5/8. Johnson Controls fell 3 to 41.

American Savings & Loan of Florida took a 3 3/4 drop to 7 7/8. The company said it faced a possible substantial loss arising from certain repurchase agreements in which it participated.

In the daily tally on the Big Board, issues falling in price outnumbered advances by about five to three. The exchange’s composite index of all its listed common stocks fell 0.61 to 105.43.

Standard & Poor’s index of 400 industrials lost 1.35 to 203.80, and S&P;’s 500-stock composite index was down 1.17 at 182.06.

The NASDAQ composite index for the over-the-counter market slipped 0.10 to 287.06.

At the American Stock Exchange, the market-value index closed at 228.25, down 0.23.

The Wilshire index of 5,000 equities closed at 1,877.454, down 9.490.

Large blocks of 10,000 or more shares traded on the NYSE totaled 1,919, compared to 2,616 on Friday.

Bond Prices Decline

Bond prices fell in light trading as traders were said to be worried about prospects of a shift by the Federal Reserve Board to a more restrictive policy.

Yields on 30-year Treasury bonds climbed to 11.90% from 11.81% late Friday.

In the secondary market for Treasury bonds, prices of short-term governments fell 1/8 point, intermediate maturities fell 3/8 point to 5/8 point and long-term issues were down 5/8 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.

In corporate trading, industrials and utilities fell point.

Among tax-exempt municipal bonds, general obligations and revenue bonds were down point.

Yields on three-month Treasury bills rose 5 basis points from Friday in the secondary market to end the day at 8.72%. Six-month bills were up 4 basis points at 8.99%, and one-year bills rose 6 basis points to 9.11%.