Stocks Hit by Profit Taking; Dow Falls 4.48

The stock market bogged down in profit taking Monday, finishing mixed after Friday’s rise to record levels.

However, bond prices jumped sharply and interest rates continued to fall.

Analysts say interest rates are falling for several reasons--among them a stimulative Federal Reserve credit policy, relatively sluggish growth in the domestic economy and signs of weakness in oil prices that have prompted hopes for continuing low inflation.

Utilities, Financials Strong

Utility and financial issues were generally strong, thanks to falling interest rates, while energy stocks mostly declined.

The Dow Jones average of 30 industrials dropped 4.48 to 1,310.93.

Volume on the New York Stock Exchange reached 125 million shares, down from 134.14 million on Friday.

Analysts said traders were selling to cash in on the market’s recent gains, despite a generally favorable news background.

To many stock traders, brokers say, that combination adds up to expectations of no severe recession in the immediate future and possible strong growth in business activity later on.

Falling interest rates prompted buying of utilities, as well as mortgage, savings and loan and similar financial issues. Among telephone utilities, Ameritech was up 1 at 91 1/2, Pacific Telesis rose 1 1/2 to 76 5/8 and Bell Atlantic gained 5/8 to close at 90 1/2.

Federal National Mortgage gained 1/2 to 19 7/8, Great Western Financial rose 3/8 to 27 3/8, CalFed rose 5/8 to 22 1/8 and H. F. Ahmanson rose 1 1/8 to 34 5/8.

Energy Stocks Fall

In the energy sector, Exxon dropped 1 3/8 to 52 5/8 in activity marked by blocks of 500,000 and 400,000 shares at 54, Chevron fell 1/8 to 35 5/8, Atlantic Richfield dropped 1/2 to 60 1/8 and Amoco fell 3/8 to 62.

U.S. depositary receipts of several Japanese companies fell after a sell-off hit the Tokyo market. Sony was down 1 at 15 3/4, Hitachi dropped 1 3/8 to 27 1/2 and TDK fell 1 3/4 to 35.

E. F. Hutton climbed 1 1/2 to 33 and Merrill Lynch dropped 1/8 to 31 7/8. Hutton named a top Merrill Lynch executive, Robert Rittereiser, as its president.

Phibro-Salomon was unchanged at 41 1/2 in active trading. An offering of 10 million Phibro-Salomon shares, being sold by Minerals & Resources, came to market at that price.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,421, compared to 2,573 on Friday.

The federal funds rate, the interest on overnight loans between banks, traded at 8%, up from 7.675% late Friday.

Bond prices leaped ahead by more than $17.50 for every $1,000 in face value amid speculation that oil prices and interest rates are headed lower.

Yields on short-term Treasury securities, already at their lowest levels in nearly five years, fell again in Monday’s auctions.

In the secondary market for Treasury bonds, prices of short-term governments rose 3/8 point to 1/2 point, intermediate maturities jumped 3/4 point to 1 1/2 points and long-term issues were up more than 1 3/4 points.

In corporate trading, industrials and utilities rose a full point in moderate trading.