Stocks Prices Drift Lower; Dow Dips 2.10

The stock market drifted down in dull trading Monday amid uncertainty over tax reform and the direction that interest rates and the dollar will take.

The Dow Jones average of 30 industrials dipped 2.10 and closed at 1,787.33.

In the broader market, declines outnumbered advances by 899 to 698 on the New York Stock Exchange, with 409 stocks unchanged. The NYSE composite index slid 0.19 to 136.93.

Volume on the Big Board contracted to 125.36 million shares from 137.40 million on Friday.

Stocks were restrained by weakness in the credit markets. The price of the Treasury’s bellwether 30-year bond fell 7/8 of a point, or $8.75 for every $1,000 in face amount, and its yield rose to 7.44% from 7.36% late Friday. Interest rates, which move in the opposite direction of bond prices, headed upward.

For much of the day, the Dow Jones industrial average traded slightly above Friday’s close, buoyed largely by strength in International Business Machines, American Express and some oil stocks. But professional selling in the afternoon sapped some of the strength from the blue chips.

IBM Gains a Fraction

IBM ended the session up at 150, and American Express rose 7/8 to 58 7/8.

Investors were also assessing the potential impact of the Senate Finance Committee’s tax proposals, which would lower the maximum personal income tax rate to 27% from 50% while eliminating many tax shelters and raising corporate taxes.

News that Norway might cooperate with the Organization of Petroleum Exporting Countries on a plan to stabilize oil prices benefited the oil patch.

Exxon, one of the Dow industrial stocks, rose 3/4 to 59 3/8. Inexco Oil spurted 1 1/8 to 4 7/8, Amoco 1 to 65 7/8, Mobil 1/2 to 30 7/8 and Occidental Petroleum 3/8 to 28 7/8.

Among other gainers, Associated Dry Goods rose 2 1/8 to 47 1/8 and Gap jumped 2 5/8 to 79 5/8, a 52-week high.

Oak Industries was the volume leader and finished up 1/8 at 2.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 151.31 million shares.

In the secondary market for Treasury bonds, prices of short-term governments fell nearly one point, intermediate maturities fell nearly two points and long-term issues fell in a range from 3/4 point to 2 3/8 points, the investment firm of Salomon Bros. said.