Blue-chip issues paced an afternoon advance in the stock market Monday, lifting the Dow Jones industrial average back above the 1,800 level.
But trading set its slowest pace in nearly three months as investors awaited developments in the U.S.-Libya situation. (U.S. bombing raids over Libya were carried out several hours after the markets closed.)
The Dow Jones average of 30 industrials rose 15.13 to 1,805.31, closing above 1,800 for the first time this month. The average established a record closing high of 1,821.72 on March 27.
Volume on the New York Stock Exchange slowed to 106.73 million shares from 139.44 million on Friday. That marked the lightest activity since an 85.34-million-share day on Jan. 20.
Widespread expectations have developed on Wall Street that new reductions in central bank discount rates are on the way in this country and other leading industrialized nations. There were reports that Japanese and U.S. officials have agreed on such a step.
Some Traders Cautious
But analysts said some traders were reluctant to bid aggressively for stocks until they knew what action, if any, President Reagan will take against Libya in retaliation for its suspected role in recent instances of terrorism.
Brokers also observed that economic growth lately has fallen short of the high hopes implied by the stock market's sharp rise from last September through March.
A fresh reading on the state of the economy is due Thursday, when the government issues its preliminary estimate of the gross national product for the first quarter.
International Business Machines helped set the tone for the overall market with a 2 5/8-point rise to 152 3/8. Late last week, IBM reported a modest increase in first-quarter profit.
Among other prominent blue-chip and technology issues, Digital Equipment gained 4 to 173, General Electric 1 5/8 to 76 3/4, Minnesota Mining & Manufacturing 1 1/2 to 99 3/8 and Merck 3 7/8 to 170.
National Gypsum climbed 4 to 62 3/4. The company said a group of investors led by management sweetened a proposal to buy it out, countering a recent offer by Wickes Cos.
General Motors dropped to 84 1/2. The company, beset by sluggish sales and large inventories, set new financing incentives for buyers of some of its car models.
Mortgage and savings and loan issues were generally strong as interest rates continued to fall. Federal National Mortgage, the volume leader, was up 1 at 32 5/8.
Advancing issues outnumbered declines by about three to two in the daily tally on the Big Board. The exchange's composite index added 0.71 to 136.93.
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,971, compared to 2,638 on Friday.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 125.94 million shares.
The Wilshire index of 5,000 equities closed at 2,448.117, up 12.684.
Standard & Poor's index of 400 industrials rose 1.60 to 262.97, and S&P;'s 500-stock composite index was up 1.31 at 237.28.
Record highs were set by the NASDAQ composite index for the over-the-counter market, up 1.93 at 380.84, and the American Stock Exchange market-value index, up 1.32 at 271.48.
In the bond market, long-term government bond prices advanced strongly while shorter maturities posted more moderate gains. Municipal and corporate issues were mixed.
Continuing weakness in oil prices also aided the market because reduced energy costs help keep inflation under control.
Oil ministers from the Organization of Petroleum Exporting Countries are gathering for an emergency session today to try to agree on production curbs to draw down the excess world oil supply. Traders will be awaiting the outcome of the OPEC talks in Geneva.
But oil industry analysts have predicted that the 13 OPEC members probably won't be able to reach agreement on a common strategy.
Traders were encouraged by unconfirmed reports that Federal Reserve Board Chairman Paul A. Volcker and Japan central bank Governor Satoshi Sumita agreed to trim base lending rates by half a percentage point before the economic summit in Tokyo begins May 4.
U.S. government officials had no comment on the reports, which appeared in Japanese newspapers. The U.S. discount rate was reduced half a percentage point to 7% in early March as part of an orchestrated international effort.
At the Treasury's weekly auction, yields on short-term securities fell below 6% for the first time since 1977.
In the secondary market for Treasury securities, prices of short-term governments rose by 3/16 point to 9/32 point and intermediate maturities rose by 13/32 point to 25/32 point.