Stocks Sag as Volume Falls; Dow Off 9.63 : Sellers Apparently Are Motivated by Tax Considerations

All stock and commodities markets are closed today. There will be no Business section in Thursday’s home editions of The Times.

Stock prices sagged in slow pre-holiday trading Tuesday, weighed down by sellers apparently motivated by tax considerations.

The Dow Jones average of 30 industrials dropped 9.63 to 1,519.15, bringing its decline for the past two sessions to 23.85 points. Other, broader indicators posted losses of similar proportions.

Volume on the New York Stock Exchange came to 78.30 million shares, down from 107.89 million on Monday, and was the lightest total since a 66.70-million-share day Sept. 16.

Activity was especially light in the afternoon as many market participants departed early for the Christmas holiday.

Under the rules, Tuesday’s session was the first in which investors could sell stocks at a profit and choose to have the gain go into their tax accounts for 1986 rather than 1985. By contrast, losses realized through Dec. 31 are considered to have been taken in 1985.

After the market’s sharp rally in October and November, analysts said, it was only logical that a large number of investors would have gains that they were waiting to cash in.

In fact, money managers at tax-exempt institutions seemed to anticipate this kind of downward pressure on the market and accordingly sold stocks on Monday, when the Dow Jones industrials dropped 14.22 points.

Aside from these special factors, brokers said there was nothing in the news to dampen hopes for a strong economy in 1986.

With four trading days left in the year, the Dow Jones industrial average shows a net gain of 307.58 points.

In the blue chip sector Tuesday, International Business Machines lost 1 to 152 3/4, American Telephone & Telegraph fell 3/8 to 24 1/8 and Sears slipped to 37 5/8. AT&T; led the active list on turnover of more than 2.2 million shares.

Among actively traded tobacco stocks, Philip Morris fell 2 to 88 3/4 and R. J. Reynolds Industries was down 3/4 at 32 1/2. The group has been strong lately following two court rulings in favor of cigarette manufacturers in product liability cases.

Some bank issues also gave up a part of their recent gains. Citicorp dropped 1 5/8 to 46 1/2, Chase Manhattan 7/8 to 68 3/8 and J. P. Morgan to 62 3/8.

In the overall tally on the Big Board, about nine issues declined in price for every five that gained ground. The exchange’s composite index of all its listed common stocks fell 0.76 to 119.25.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 97.89 million shares.

Bond prices wound up a quiet Christmas eve trading session little changed and interest rates made minor movements.

In the secondary market for Treasury securities, prices of short-term governments finished up 1/16 point, intermediate maturities were unchanged to 3/32 point higher and long-term issues rose 1/8 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, edged up 0.02 from late Monday to 111.08. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, rose 0.71 to 1,164.09.

In corporate trading, industrials and utilities were unchanged in light trading. Among tax-exempt municipal bonds, general obligations and revenue bonds also were unchanged in light dealings.

Yields on three-month Treasury bills declined two basis points to 7.06%. A basis point is one-hundredth of a percentage point. Six-month bills fell six basis points to 7.07% and one-year bills held at 7.13%.

Yields on 30-year Treasury bonds dipped to 9.32% from 9.35% late Monday.