Stocks Mixed in Heavy Trading; Dow Off 1.03

Stock prices finished mixed in heavy trading Tuesday as blue chips took a breather from the recent run that has repeatedly carried the Dow Jones industrial average into record territory.

The Dow Jones average of 30 industrials slipped 1.03 to 1,438.99. Broader market indicators, however, turned in better performances.

Gainers heavily outnumbered losers among issues listed on the New York Stock Exchange. Volume on the Big Board picked up to 126.14 million shares from 108.36 million on Monday.

Trading started the day on a strong note. The Dow Jones industrial average moved up about 7 points early in the session amid lingering optimism in the bond market about the chances for lower interest rates. Enthusiasm in the bond market has kept yields on long-term government securities close to five-year lows in recent days.

Blue chips drifted lower in the afternoon as investors decided to take profits. But, as the afternoon progressed, the blue chips trimmed their losses, ending the day well above the session’s lows.

Ralph Acampora, a technical analyst for Kidder, Peabody & Co., said the overall market had a positive day, and, if not for a drop in Texaco stock, the blue chips would have done better as well.

Pennzoil-Texaco Suit

Texaco finished down 3 at 36 and was No. 3 on the list of most active issues. A jury in Houston ruled that Texaco deliberately interfered in a merger agreement between Pennzoil Co. and Getty Oil and awarded Pennzoil $10.5 billion in damages.

Pennzoil, another actively traded stock, ended the session up 7 5/8 at 57 1/2.

Leading the most active list was Duquesne Light, finishing up 1/8 at 16 5/8.

Analysts said there was little market reaction to a Commerce Department report before the session opened that housing starts jumped 10.8% in October.

Bond prices retreated slightly in late trading but still netted gains on the day as the credit markets continued a rally that has pushed some long-term interest rates to their lowest levels in about five years.

Despite the continuation of a heavy schedule of Treasury auctions that will mean the sale of $46.8 billion in new securities this week, prices of long-term Treasury bonds edged upward to push yields below 10%, where they have not been sustained since mid-1980.

Prices on 30-year Treasury bonds in late trading were up about point, pushing yields to 9.98%, down from 10% late Monday.

In addition, yields on $8.76 billion in new three-year notes auctioned by the Treasury hit seven-year lows, averaging 8.74%.

Yields for the three-year notes were the lowest since 8.46% on Aug. 15, 1978, and fell below the 9.53% average in the last three-year note auction Aug. 15.

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