Stocks, Bonds in Broad Rally; Dow Closes Up 6

Stock and bond prices posted broad gains Wednesday, on the strength of hopes for lower interest rates.

Telephone and and financial stocks that are often sensitive to changing interest-rate expectations had a good day.

The Dow Jones average of 30 industrials, up more than 10 points at its mid-session peak, settled for a 6.08 advance to 1,259.54 by the close.

Expressed Misgivings

Interest rates fell in the long-term bond market Tuesday and Wednesday after Paul A. Volcker, chairman of the Federal Reserve Board, expressed some misgivings about the economic outlook.

In Wednesday’s activity, prices of long-term government bonds, which move in the opposite direction from interest rates, rose about $2.50 to $5 for every $1,000 in face value. However, interest rates on short-term Treasury bills moved up slightly.

At a conference of the Export-Import Bank on Tuesday, Volcker said that overall growth might falter because of problems afflicting the manufacturing, mining and farming sectors of the economy.

Analysts said his comments did not have upbeat connotations for the near-term outlook for corporate profits. But they added that traders interpreted his remarks as a signal that the Fed was likely to follow a credit policy that encouraged lower interest rates.

Among the regional telephone issues, Southwestern Bell rose 1 to 74, Nynex 1 to 81 1/8, Bell Atlantic 3/4 to 83 3/8, Pacific Telesis 3/4 to 69 5/8 and Ameritech 1/2 to 83 1/2. American reported higher first-quarter earnings.

In the bank and savings and loan sector, Citicorp gained 1 to 44 3/4, J. P. Morgan 1 to 47 5/8, H. F. Ahmanson 1 to 34 5/8 and Golden West Financial 1 to 31. J. P. Morgan came in with first-quarter earnings of $1.85 a share, up from $1.66 in the comparable period last year.

Uniroyal led the active list, up 7/8 at 18 3/4 on turnover of more than 2.7 million shares. Financier Carl Icahn said he planned an $18-a-share offer for control of the company.

CBS tumbled 9 3/8 to 98. The company attributed the selling to a suit it filed against investor Ivan F. Boesky alleging securities-law violations in connection with Boesky’s recent purchase of a stake in CBS.

CBS also denied rumors that it was considering acquiring Gannett Co. Gannett shares rose 1 3/8 to 59 and traded at record highs.

International Business Machines, which is expected to report its first-quarter earnings today, added 1 to 125 7/8.

In the daily tally on the Big Board, advances outnumbered declines by more than two to one. The exchange’s composite index climbed 0.67 to 103.99.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 132.10 million shares.

Standard & Poor’s index of 400 industrials gained 1.29 to 199.95, and S&P;’s 500-stock composite index was up 1.21 to 179.42.

The NASDAQ composite index for the over-the-counter market picked up 2.13 to 278.76.

At the American Stock Exchange, the market-value index closed at 229.67, up 1.28.

The Wilshire index of 5,000 equities closed at 1,849.821, up 12.495.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,310, compared to 1,715 on Tuesday.

Bond prices finished mostly higher following a more pronounced advance in the previous session.

In the secondary market for Treasury bonds, prices of short-term governments fell 3/32 point, but intermediate maturities rose 1/32 point and long-term issues were up 3/8 point, according to the investment firm of Salomon Bros.

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

Industrials Rise

In corporate trading, industrials rose 3/4 point and utilities were up 3/8 point in active trading.

Among tax-exempt municipal bonds, general obligations rose 1/2 point and revenue bonds were up 3/8 point.

In secondary trading, yields on three-month Treasury bills were up 5 basis point at 8.14%. Six-month bills fell 1 basis point to 8.45%, and one-year bills were up 3 basis points at 8.67%.

Yields on 30-year Treasury bonds fell to 11.56% from 11.61% on Tuesday.