Analysts Cite Profit Taking : Stocks Sink; Dow Off 15.92

The stock market took its biggest drop in almost four weeks Monday, relinquishing some of last week’s record gains.

Analysts ascribed the decline to profit taking, abetted by some uncertainties about where interest rates and oil prices might go from here.

The Dow Jones average of 30 industrial stocks fell 15.92 to 1,776.82 for its largest single-session loss since Feb. 19, when it dropped 20.52 points. Big Board volume slowed to 137.46 million shares from 181.87 million Friday.

Analysts said many investors scrambled to cash in on the market’s recent gains, reasoning that stock prices had risen too far, too fast in last week’s upsurge.

The Dow Jones industrial average’s rise of 92.91 points was its biggest weekly gain ever.

Some observers also questioned whether a letdown might be coming after the steady flow of favorable news reaching Wall Street of late.

Interest rates, which have taken a steep drop since last fall, rose slightly in the credit markets. Prices of long-term government bonds dropped about $5 for every $1,000 in face value, reflecting the upswing in rates.

Brokers also noted uncertainty over the oil price outlook. Organization of Petroleum Exporting Countries ministers are meeting in Geneva in an attempt to reach an agreement allocating production and stabilizing the world market.

There were some rumors, unconfirmed as of the stock market’s close in New York, that the ministers were moving toward agreement on a production-sharing plan.

Losers in the blue-chip sector included American Telephone & Telegraph, down 3/8 at 23; Merck, down 2 1/8 at 159 1/2; International Paper, down 3 3/8 at 61 1/2; Du Pont, down 1 3/8 at 76, and General Electric, down 5/8 at 77 1/2.

Merck, International Paper and Du Pont each contributed an unusually large gain to the Dow Jones industrial average’s rise Friday.

By contrast, buying interest showed up in two blue chips that didn’t do much late last week--General Motors, which rose 1 1/8 to 81 1/8, and International Business Machines, which was up 1/2 at 150 7/8.

Warnaco climbed 2 1/8 to 37 1/2. A private investor group said it made a $36-a-share bid for all of the company’s stock.

Tonka dropped 2 1/8 to 31 7/8. The company disclosed plans for an offering of 1 million shares after a 3-for-2 stock split that is payable early next month.

Declines Lead Advances

In the overall tally on the New York Stock Exchange, about five issues declined in price for every two that gained ground. The exchange’s composite index gave up 1.10 to 135.07.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,369, compared to 3,238 on Friday.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 166.30 million shares.

Standard & Poor’s index of 400 industrials fell 1.49 to 258.91, and S&P;’s 500-stock composite index was down 1.88 at 234.67.

The NASDAQ composite index for the over-the-counter market dropped 1.82 to 370.01.

At the American Stock Exchange, the market-value index closed at 265.22, down 2.59.

The Wilshire index of 5,000 equities closed at 2,408.038, down 20.944.

Volatile Bond Trading

Government bond prices finished a volatile session mostly lower as traders awaited the outcome of OPEC’s emergency meeting.

In the secondary market for Treasury bonds, short-term securities were unchanged to off 1/16 point, intermediate governments dropped by point to 19/32 point and long-term issues were down by 5/32 point to 7/32 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, closed at 116.74, down 0.22 from Friday’s close.

The Shearson Lehman daily Treasury bond index, which makes a similar measurement, fell 2.79 to 1,220.28.

In corporate trading, industrials dipped 1/8 point and utilities fell 3/8 point in light activity.

Among tax-exempt municipal bonds, general obligations and revenue bonds dropped 1 points amid moderate trading.

The yield on the benchmark 30-year Treasury bond rose to 7.98% from 7.94% late Friday.

The federal funds rate--the interest on overnight loans between banks--traded at 7.5%, up from 7% late Friday.