Dow Gains 1 to Close at 3rd Straight Record High; Volume Surges

Stock prices seesawed in heavy trading today, losing ground late in the session, but the Dow Jones average of 30 industrials managed to eke out a modest gain.

The Dow Jones average of 30 industrials rose 1.72 to 1,433.60, a new closing high.

Advancing issues outpaced those declining by better than a two-to-one margin on the New York Stock Exchange.

Big Board volume totaled 170.80 million shares, against 126.54 million in the previous session.

The NYSE’s composite index went up 0.51 to 114.33.

At the American Stock Exchange, the market-value index was up 1 to 236.41.

The Dow Jones average of 30 industrials, which first crossed the 1,400 mark last week, had given a stellar performance Monday by posting its best one-day gain in 10 months.

Rebounded in the Afternoon

The blue-chip index spent most of the Tuesday session bouncing around above the previous session’s closing level. The market drifted lower in the morning but rebounded in the afternoon and, at one point, the Dow Jones index was up nearly 8 points.

The market has been doing well even though the economy still seems lethargic.

Investors are hoping lower interest rates and inflation’s good behavior will pump some energy into the economy. Better economic conditions next year could lead to improvements in corporate profits.

Bond prices moved higher in early trading, while short-term interest rates edged lower.

Later in the day, the Treasury Department planned to auction $13.4 billion in three-month and six-month bills. The size of the auction was reduced from the usual $14.4 billion to avoid exceeding the federal debt ceiling. Congress has been unable to complete work on legislation which would raise the debt ceiling.

In the secondary market for Treasury bonds, prices of short-term governments rose 1/8 point, intermediate maturities rose by between 6/32 point and 3/8 point and long-term issues were up as much as 3/4 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.

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, rose 0.19 to 108.03 from Friday’s close. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 2.57 to 1,133.60.

In corporate trading, Salomon Bros. said industrials rose 1/2 point and utilities were up 3/8 point in light trading.

Among tax-exempt municipal bonds, the investment firm said general obligations rose point and revenue bonds were up 3/8 point in moderate trading.

Yields on three-month Treasury bills were down 4 basis points at 7.20%. A basis point is one-hundredth of a percentage point. Six-month bills fell 3 basis points to 7.25% and one-year bills were off 4 basis points at 7.27%.

Yields on 30-yearyo 10.07% from 10.12% late Friday.

The federal funds rate, the interest on overnight loans between banks, traded at 8%, up from 7.875% late Monday.