Oil Issues Spark Late Rally; Dow Gains 6.33

Oil issues turned in a strong showing, helping the stock market rally from a sharp drop in early trading Monday to finish mixed.

The Dow Jones average of 30 industrials, down about 25 points at its mid-session low, closed with a 6.33 gain at 1,769.97

Volume on the New York Stock Exchange came to 129.99 million shares, against 114.92 million on Friday.

Energy stocks jumped ahead late in the day on signs that ministers of the Organization of Petroleum Exporting Countries were getting close to an agreement on a plan to shore up world oil prices.

Atlantic Richfield gained 2 7/8 to 48 5/8, Mobil 1 1/8 to 31 1/2, Occidental Petroleum 1 3/4 to 24 3/4, Exxon 1 to 61 3/4, Amoco 2 1/2 to 59 7/8 and Chevron 2 3/4 to 38 3/4.

In the oil service and drilling sector, Schlumberger rose 1 1/8 to 29, Halliburton 1/2 to 18 3/8, Baker International 3/4 to 10 and Hughes Tool 3/8 to 8 1/8.

At a meeting in Geneva, an Iranian plan to cut OPEC’s production received mostly favorable responses, including an announcement that Kuwait would nearly halve its output.

Traders Still Cautious

However, analysts said traders continued to proceed cautiously as they awaited the Treasury’s $28-billion sale of bonds and notes that starts today and runs through Thursday.

There has been considerable concern that rates may have to rise to stimulate demand for the new securities. In particular, doubts focus on Japanese investors, because a weak dollar reduces the effective return that they get on U.S. investments.

Brokers also said that many investors were wary of buying in the early going Monday morning after a succession of sharp declines in stock prices on recent Mondays.

Word of a possible OPEC agreement weighed down stocks of airlines. UAL dropped 1 7/8 to 50 5/8, AMR 1/2 to 51, Delta 5/8 to 41 7/8 and TWA 7/8 to 16.

Grumman dropped 1 to 23 5/8. The company reported second-quarter earnings of 50 cents a share, down from 75 cents in the comparable period last year.

Raychem, which sold off sharply late last week on earnings that fell short of analysts’ expectations, lost another 6 3/4 to 72 3/4.

In the daily tally on the Big Board, declining issues outnumbered advances by about four to three.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,280, compared to 2,197 on Friday.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 152.49 million shares.

Bond Prices Modestly Up

In the bond market, prices of most government securities moved modestly higher in light trading.

The closely watched 30-year Treasury bond dipped 1/16 point, a small enough change to leave the bond’s yield unchanged from late Friday at 7.45%.

In the secondary market for Treasury bonds, prices of short-term governments rose 1/16 point to 1/8 point and intermediate maturities were up by point, according to the investment firm of Salomon Bros. The firm said the 20-year bond gained point. 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 rose point in quiet activity, Salomon Bros. said. Among tax-exempt municipal bonds, general obligations were up 3/8 point and revenue bonds rose point in light to moderate trading volume.

Yields on three-month Treasury bills fell 6 basis points to 5.70%. Six-month bills fell 2 basis points to 5.75%. One-year bills were off by 2 basis points at 5.77%. A basis point is one-hundredth of a percentage point. The federal funds rate, the interest on overnight loans between banks, traded at 6.25%, unchanged from late Friday.