Stocks Lower in Slow Trading; Dow Off 0.57
The stock market made little headway in slackened trading Monday, pausing after last week’s strong rally.
As the advance bogged down, attention shifted again on Wall Street to stocks involved in takeover news and rumors.
The Dow Jones average of 30 industrials, up 33.73 points last week, dipped 0.57 to 1,389.68.
Volume on the New York Stock Exchange tailed off to 104.94 million shares from 129.36 million on Friday.
Buyers Seem Reluctant
Analysts said buyers appeared a little reluctant to chase after stocks following the upsurge last week that carried the Dow Jones industrial average to record highs.
But they said there was nothing in the news to deal any great setback to investors’ hopes for lower interest rates and a healthy economy in 1986.
A survey of corporate purchasing executives found that the economy, after gaining strength in September, held its ground in October. An index calculated by the National Assn. of Purchasing Management pointed toward economic expansion for both of those months after posting negative readings for most of this year.
In the course of Monday afternoon’s trading, the Dow Jones industrials showed a loss of as much as 7 points at one stage.
Analysts said prices were weighed down by “sell programs,” or packages of stock for sale, by investing institutions or Wall Street professionals.
After those orders were executed, the Dow snapped back to finish nearly unchanged.
Merger Offer Made
Potlatch Corp. jumped 6 3/4 to 42 3/4. The company said it received a $45-a-share takeover offer from the Belzberg family of Canada.
Cluett, Peabody, which agreed to be acquired by West Point-Pepperell for $41 a share in cash and stock, climbed 3/4 to 38 1/8. West Point-Pepperell was down 2 1/8 at 40 7/8.
Amsted Industries, which said some of its top executives are considering a bid to buy out the company, gained 4 1/2 to 45.
Chromalloy American added 1 to 15 3/4. The company said it received a $17.50-a-share offer for its stock from Forsch Corp.
Sun Chemical, which owns a big chunk of Chromalloy’s stock, was up 2 at 36 3/4.
CBS, which has been strong lately on renewed takeover speculation, fell back 5 to 118.
Among leading computer and technology issues, International Business Machines gained 1 3/8 to 132, Digital Equipment 2 1/8 to 115 3/8 and Hewlett-Packard 1/8 to 30 1/8.
In the overall tally on the Big Board, advances and declines ran about even. The exchange’s composite index lost 0.10 to 110.45.
Indexes Drop
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 125.05 million shares.
Standard & Poor’s index of 400 industrials fell 0.43 to 212.44, and S&P;’s 500-stock composite index was down 0.28 at 191.25.
The NASDAQ composite index for the over-the-counter market edged up 0.12 to 294.23.
At the American Stock Exchange, the market value index closed at 229.59, up 0.22.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,133, compared to 2,833 on Friday.
The Wilshire index of 5,000 equities closed at 1,963.026, down 1.776.
Bond prices finished a dull trading session little changed but generally above the low levels of the day.
Interest rates on short-term Treasury securities declined at the weekly auction after increasing the two prior weeks.
The Treasury sold $7.2 billion in three-month bills at an average yield of 7.21%, which was down from 7.24% last week and the lowest since 7.18% on bills sold Oct. 21.
Another $7.2 billion in six-month bills was sold at an average rate of 7.3%. That return was down from 7.37% the previous week and the lowest since 7.24% on bills sold Sept. 30.
Heavy Schedule Expected
In the absence of any major economic news, dealers watched Capitol Hill, where congressional negotiators were still trying to come up with a measure raising the federal debt limit.
Once the government’s borrowing authority is increased, the Treasury is expected to announce a heavy schedule of auctions. The Treasury has had to put much of its financing operations on ice while Congress deliberates.
A subject generating interest in the bond market is the meeting Monday and today of the Federal Reserve Board’s policy-making arm, the Federal Open Market Committee.
The committee is mapping the course of monetary policy for the next several weeks, but economists don’t expect any dramatic changes.
