Falling Interest Rates Help Stocks; Dow Index Up 2.77

The stock market extended its modest rally of the past several sessions with a small advance Tuesday.

Analysts said falling interest rates helped encourage some late buying.

The Dow Jones average of 30 industrials rose 2.77 to 1,269.55, bringing its gain for the past six sessions to 14.57 points.

Volume on the New York Stock Exchange reached 98.48 million shares, against 80.66 million Monday.

Stock prices have been nudging ahead for the past week, aided by falling interest rates in the credit markets.

Prices of long-term government bonds, which move in the opposite direction from interest rates, rose $5 or more for every $1,000 in face value in Tuesday’s activity.

But analysts said confusion persisted on Wall Street over whether the economy was growing strongly or losing momentum.

The government reported that housing starts registered a stronger-than-expected 16.2% increase in March.

Building permits, regarded as a good indicator of future construction activity, rose 10.9%.

However, another key measure of the economy, industrial production, was less upbeat. It rose 0.3% last month, according to the Federal Reserve Board.

Though the market has been moving ahead since early last week, each day’s gains have been small. “It has not been easy to make a buck in this rally,” observed Newton Zinder at E. F. Hutton.

Among Japanese issues traded in this country in the form of American depositary receipts, Kyocera dropped 2 3/8 to 41 1/8, Matsushita Electrical 1 to 55 3/4, Sony 3/4 to 16 3/8 and Hitachi 1 to 31.

Prices fell sharply Tuesday on the Tokyo Stock Exchange amid what analysts described as concern over the prospective impact on many Japanese companies arising from pressures for greater import access to that nation’s markets.

The Nikkei Dow Jones index dropped 345.45 points to close at 12,207.28.

Unocal led the active list, down 1 at 48.

Wheeling-Pittsburgh Steel tumbled 1 1/2 to 7. The company filed for protection under Chapter 11 of the U.S. Bankruptcy Code.

In the overall tally on the Big Board, advancing issues nosed out declines by a small margin. The exchange’s composite index of all its listed common stocks rose 0.15 to 105.02.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 115.13 million shares.

In the credit markets, bond prices rose and interest rates fell in moderate trading.

In the secondary market for Treasury bonds, prices of short-term governments rose 12/32 point, intermediate maturities were up 18/32 point and long-term issues were up 21/32 point.

Prices of industrial and utility bonds were up 3/4 point in moderate trading.

Among tax-exempts, general obligations and revenue bonds were up 1/2 point.

In the secondary market, yields on three-month Treasury bills fell 11 basis points to 7.96%, six-month bills fell 17 basis points to 8.08%, and one-year Treasury bills fell 16 basis points to 8.28%.

Yields on 30-year Treasury bonds fell to 11.31% from 11.35% late Monday.

The federal funds rate, the interest on overnight loans between banks, traded at 8.25%.