Stocks Continue to Gain; Dow Edges Up a Fraction

The stock market continued its broad-based rally Thursday, although gains moderated as trading slowed in what analysts described as a respite from advances earlier in the week.

The Dow Jones average of 30 industrials, up 61.87 in the three previous sessions, rose 0.42 to 1,844.91.

But, as has been the case all week, broad market indicators showed gains and advancing issues outnumbered declining issues in New York Stock Exchange trading, this time by about five to three.

The bond market rally, which had supported stocks earlier in the week, cooled off, with interest rates edging slightly higher. But hopes that economic weakness will encourage further declines in rates kept investor confidence high, analysts said.

Analysts said many investors moved to the sidelines Thursday to wait for further indications of the direction of interest rates--and of whether the market advance had the strength to continue.

Profit taking also curbed gains in the blue chips.

Anheuser-Busch led the list of most active NYSE issues, up to 55 7/8 as 2.6 million shares changed hands. The company said it purchased 2.3 million shares from an estate as part of its previously announced stock buyback.

ICN Pharmaceuticals of Costa Mesa was up 2 to 24 in heavy trading. The stock received a buy recommendation Wednesday from a major Wall Street investment firm.

Shares of NL Industries’ chemicals business, which is to be spun off from the parent company, rose 1/2 to 11 1/2 as one of the most heavily traded issues of the session.

Ex-Cell-O rose 1 5/8 to 76 in active trading. The company said its directors rejected an unsolicited buyout offer of $68 a share by Textron. Textron rose 5/8 to 57 3/8.

Major auto makers slipped after reporting disappointing early August sales on Thursday. General Motors fell 1 5/8 to 71, Ford to 59 3/4, Chrysler 3/8 to 39 3/8 and Honda 1 1/2 to 65 7/8.

Retailers gave up Wednesday’s gains. J. C. Penney was off 1 1/8 to 79 1/8, K mart 5/8 to 53 3/4 and Federated Department Stores 3/8 to 81 5/8.

Financial issues were mostly higher. Citicorp rose 7/8 to 56, Household International 3/8 to 43 1/2, J. P. Morgan 3/8 to 93 7/8 and Travelers 1/2 to 46 1/2.

Other actively traded issues included IBM, up to 134; AT&T;, unchanged at 23 1/2; Big Three Industries, up 1/8 to 28 3/8, and Owens-Corning Fiberglas, up 3/4 to 78.

Big Board volume totaled 123.77 million shares, against 156.4 million on Wednesday.

Bond prices were little changed.

In the secondary market for Treasury bonds, prices of short-term governments fell 1/32 point and intermediate maturities ranged from a drop of 1/16 point to an increase of 1/16 point. Long-term issues were down about 7/32 point.

Among tax-exempt municipal bonds, general obligations were unchanged and revenue bonds were down point.

Yields on three-month Treasury bills were up 2 basis points to 5.58%. Six-month bills were unchanged at 5%. One-year bills were up 3 basis points at 5.65%.