Stocks Fall on Interest Rate Fears; Dow Off 6

Stock prices declined broadly Monday in selling blamed on uncertainty over interest rates and the outlook for the economy.

Trading set its slowest pace since the July 5 session that fell between the Independence Day holiday and a weekend.

The Dow Jones average of 30 industrials dropped 6.16 to 1,346.89.

Volume on the New York Stock Exchange totaled 79.61 million shares, compared to 87.86 million last Friday. On July 5, 62.45 million shares were traded.

Analysts said investors were uneasy about the prospective reception that the credit markets will give to the Treasury’s record offering this week of $21.5 billion in bonds and notes. The concern is that interest rates might have to move up to attract enough buyers for the securities.

No Support Found

At the same time, hopes that economic growth was reviving got no support from a survey of corporate purchasing executives, the results of which were reported over the weekend. The National Assn. of Purchasing Management’s index was unchanged from its reading in June at a level that is interpreted as indicating a declining economy.

That was at variance with other recent data--including a rise in the government’s index of leading indicators--that have prompted hopes for a pickup in economic activity and corporate profits in the third quarter of the year after a sluggish first half.

Most of the market’s losses came in the first half of the session. Stocks showed no adverse reaction after President Reagan said he had a small patch of skin cancer on his nose.

MGM/UA Entertainment jumped 4 3/4 to 22 5/8. The company said it was discussing a possible deal under which it would be acquired by Turner Broadcasting System for $29 a share in cash.

Beatrice Cos. led the active list, up 2 at 32 on turnover of more than 2.5 million shares. Over the weekend, the resignation of the company’s controversial chairman and chief executive, James L. Dutt, was announced.

Trans World Airlines gained 1/2 to 22 5/8. Financier Carl C. Icahn, who owns more than one-third of the company’s stock, said he would bid $24 a share in cash and securities for the rest, seeking to preempt a previous merger plan under which Texas Air would acquire TWA.

Tandy Rises

Tandy, which said it expected its purchase of the Video Concepts store chain to increase its sales by $150 million to $200 million in the fiscal year that began this month, rose 1 3/8 to 33.

The daily tally on the Big Board showed about five losers for every two stocks that gained ground. The exchange’s composite index declined 0.58 to 110.27.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 96 million shares.

Large blocks of 10,000 or more shares traded on the NYSE totaled 1,386, compared to 1,088 on Friday.

Bond prices mostly rose as rates on short-term Treasury securities edged lower.

In the secondary market for Treasury bonds, prices of short-term governments inched up 1/32 point, intermediate maturities climbed 10/32 point and long-term issues were up 15/32 point, according to the investment firm of Salomon Bros. The movement of a full point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.