The stock market wound up a banner year on a quiet note Tuesday, closing mixed after a brief move toward record highs.
The Dow Jones average of 30 industrials, up more than 4 points at mid-session, ended the day with a loss of 3.79 at 1,546.67.
For the year, the Dow index rang up a net gain of 335.10 points, or 27.66%. It was the best yearly showing for the Dow since it jumped 38.3% in 1975.
Tuesday's volume on the New York Stock Exchange came to 112.65 million shares, up from 91.97 million on Monday.
All-Time Closing High
The Dow Jones industrials established an all-time closing high of 1,553.10 on Dec. 16. Since then the market has been fluctuating erratically as traders have been maneuvering for year-end tax and reporting purposes.
Brokers have also said that it has been difficult to discern any message in the market's recent ups and downs because so many investors have taken extended Christmas and New Year's holidays.
In the blue chip sector, International Business Machines dropped 2 3/4 to 155 1/2. The stock, which is widely described as a bellwether for the market, was credited with leading the market higher Monday. Analysts said its drop Tuesday apparently had a dampening effect on investors' mood.
General Motors stood at 70 3/8, down 1/8. GM was trading ex-dividend, with the distribution of one Class H common share for each 20 GM shares taking effect. The Class H stock was created in connection with GM's acquisition of Hughes Aircraft.
Midcon climbed 3 1/8 to 69 1/2. An investor group that has made a hostile takeover bid for the company said it was willing to sweeten its offer.
Meanwhile, sources said Occidental Petroleum was preparing to make an offer of its own for Midcon. Occidental shares dropped 2 to 31.
Regional telephone stocks, which were primary beneficiaries of falling interest rates through much of 1985, had another strong day. Bell Atlantic gained 2 1/2 to 106 1/2, Ameritech rose 2 3/4 to 106 1/2, Nynex gained 1 to 97 3/4, U.S. West rose 1 to 89 and Pacific Telesis rose 7/8 to 84 5/8.
Gainers Outpace Losers
In the daily tally on the Big Board, about seven issues rose in price for every five that lost ground. Large blocks of 10,000 or more shares traded on the NYSE totaled 2,188, compared to 1,567 on Monday.
There was little action in the credit markets, with prices remaining flat for government bonds and corporate and municipal issues. Interest rates stayed close to recent levels.
The credit markets remained open Tuesday to accommodate year-end transactions but the session was sparsely attended.
Trade Deficit Rises
In economic news, the Commerce Department reported that the U.S. merchandise trade deficit reached $13.68 billion in November, the third-largest imbalance on record. The November trade shortfall was 19.5% larger than the October figure of $11.45 billion.
The trade report was consistent with the predictions of many economists who have predicted that the deficit for all of 1985 will be between $140 billion and $150 billion. Bond traders showed little reaction to the report.
Separately, the Commerce Department reported that sales of new single-family homes rose 7.7% in November. It marked the first gain since July and the biggest increase in more than a year.
In the secondary market for Treasury securities, prices of short-term governments declined between 1 16 point and 1 32 point. Intermediate issues were unchanged to up 1 16 point. Long-term issues were unchanged, 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.
In corporate trading, industrials and utilities were unchanged in light dealings.
Among tax-exempt municipal bonds, revenue bonds and general obligations were unchanged in light trading.
Treasury Bills Up
Yields on three-month Treasury bills rose 14 basis points to 7.04%. Six-month bills rose 2 basis points to 7.08%, while one-year bills remained at 7.09%. A basis point is one-hundredth of a percentage point.
Yields on 30-year Treasury bonds held at 9.27%, unchanged from the previous session.
The federal funds rate--the interest on overnight loans between banks--stood at 10.5%, down from 11% late Monday. That rate, which had been trading in the 7.5% to 8% range recently, generally jumps sharply at the end of the year and at the end of quarters, when banks borrow reserves to report on their balance sheets.