Stocks Rise in Seesaw Session; Dow Gains 4.34

Stock prices finished slightly higher Tuesday in a moderate session restrained by the U.S. bombing raid on Libya, but many market analysts predicted that Wall Street’s advance would accelerate as the week progressed.

“I think the market’s performance was unbelievably positive,” said Theodore Halligan, an analyst at the investment firm of Piper, Jaffray & Hopwood. “The fact that the market did not take a hit indicates confidence in President Reagan.”

Others said Reagan’s decision to order the Monday night bombing attack on Libya compelled some investors to sell stocks or stay away from the market until the political and economic consequences became clearer.

Merck Climbs

“If you’re bullish you say, ‘Wow, an international incident and the market held like a rock.’ If you’re bearish you say, ‘This is the calm before the storm,’ ” said Lawrence Wachtel, an analyst at Prudential-Bache Securities.

The Dow Jones average of 30 industrial stocks advanced 4.34 points to 1,809.65 after seesawing in a narrow range on both sides of Monday’s closing level of 1,805.31.

But much of the index’s advance was linked to the performance of a few major stocks, notably Merck, which rose 3 to 173; Exxon, up 1 to 57, and Westinghouse, up 1 3/8 to 56 3/4.

Analysts said the market was helped by a Federal Reserve report showing that industrial production declined last month. That intensifies pressure on the Fed to push interest rates lower by lowering the discount rate, the loan fee it charges banks, they said. That would make stocks a more attractive investment.

Some analysts said the gross national product figure for the first quarter, due out Thursday, will be a major influence on the market. A lower-than-expected figure would further press the Fed to reduce the discount rate, which it lowered from 7.5% to 7% last month.

Financial stocks showed some gains Tuesday, notably First Boston, which jumped 2 3/4 to 61. The Wall Street investment firm said its net profit for the first quarter nearly tripled from a year earlier.

Auto stocks generally declined, led by General Motors at 83 7/8, down 5/8.

Polaroid Falls

Stocks in retailing, electronics, metals, forest products and energy companies showed mixed results. Among the most notable issues were Sperry Corp., down 1 5/8 to 54 1/8; International Paper at 58 3/8, up 1; Polaroid at 55 1/2, down 1 3/4, and Lockheed at 58, up 1 5/8.

In the broader market measurements, the New York Stock Exchange composite index rose 0.22 to 137.15, while the American Stock Exchange market value index rose 0.78 to 272.26.

The Wilshire index of 5,000 equities closed at 2,453.543, up 5.426.

Standard & Poor’s index of 400 industrial stocks rose 0.70 to 263.67, and S&P;’s 500-stock composite index was up 0.45 to 237.73.

The NASDAQ composite index for the over-the-counter market closed at 381.71, up 0.87.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,324, compared to 1,971 on Monday.

Advancing issues held a slight edge over decliners on the NYSE, where the volume totaled 123.65 million shares, compared to 106.73 million on Monday.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 145.72 million shares.

Bond Prices Mixed

In the bond market, prices were mixed in nervous trading.

“The market was reacting within seconds to news of developments in the conflict between the United States and Libya,” said Jay Goldinger, an analyst with the Beverly Hills-based investment banking firm Cantor, Fitzgerald & Co. “I feel like I’m seasick, the market is so volatile.”

In the early going, the market moved higher after the Fed report on U.S. industrial production.

But it gave up its early gains after reports that Libya had attacked a U.S. installation on an Italian island in the Mediterranean.

In the secondary market for Treasury securities, prices of short-term governments rose by 1/32 point to 1/8 point and intermediate maturities went up by 1/32 point to 5/32 point. The 20-year bond fell point, according to the investment firm of Salomon Bros.

The Treasury’s 30-year bond lost 5/16 point; its yield edged up to 7.32% from 7.29% late Monday.

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, closed at 120.10, down 0.06 from Monday’s close. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, was up 0.55 to 1,256.22.

In corporate trading, industrials fell point and utilities held steady in light dealings.

Among tax-exempt municipal bonds, general obligations gained 3/8 point in average trading volume, while revenue bonds were off point in quiet activity.

Yields on three-month Treasury bills fell three basis points to 5.87%. Six-month bills slid four basis points to 5.92%. One-year bills dipped one basis point to 5.90%.