Stocks Mixed in Dull Day; Dow Unchanged

A late slide in International Business Machines and gains in other blue chip leaders buffeted Wall Street on Tuesday, but most stock prices drifted or declined in lethargic trading.

The Dow Jones average of 30 industrial stocks, which would have risen if IBM had not fallen, ended the day at 1,784.45, unchanged from Monday.

Most other indicators measuring the broader market were marginally lower, and the number of declining stocks held a slight edge over gainers on the New York Stock Exchange.

Volume on the Big Board totaled 125.1 million shares, compared to 88.25 million in the previous session.

Brokers said IBM’s 5 3/8 drop to 128 1/8 on composite volume of 3.37 million shares was caused by the computer giant’s assertion that overseas business was softening. Some Wall Street analysts reduced their third-quarter earnings estimates for IBM, which is due to release them next week.

Computer Stocks Down

“The IBM negative action was something that balanced this market out severely,” said Peter J. DaPuzzo, manager of the retail equity group at the New York investment firm Shearson Lehman Bros. “Overall, the market was sort of at a standstill.”

IBM’s weakness affected other computer and electronic stocks. Burroughs dropped 1 to 69 3/8, Hewlett-Packard fell 1 1/8 to 37 3/4, Honeywell fell 7/8 to 69 1/2 and Prime Computer fell 3/4 to 17.

But the broader effect of IBM’s plunge was diluted by strength in other blue chip stocks, which was largely attributable to takeover news.

Steel energy giant USX, target of a $31-a-share takeover offer from financier Carl C. Icahn, topped the Big Board’s most-active list, advancing 1 1/8 to 27 5/8, with more than 11.1 million shares changing hands.

BankAmerica jumped 2 5/8 to 14 7/8 because of an $18-a-share merger offer from First Interstate Bancorp. Volume exceeded 5.5 million shares.

Viacom was the third most-active, up 1 at 43 3/4 with more than 3.5 million shares changing owners. The diversified entertainment company’s board rejected a purchase offer from a management-led group, causing speculation that a bidding war could ensue.

Bonds Prices Mixed

In the bond market, prices were mixed to higher at the end of a quiet day of trading.

In the secondary market for Treasury bonds, the yield on the key 30-year issue rose to 7.54% from 7.53% late Monday and Friday. The price of the bond fell by $1.25 for each $1,000 of face value.

In the secondary market for Treasury bonds, prices of short-term governments rose less than 1/32 point, intermediate maturities were unchanged and long-term issues were down 1/16 point, according to the investment firm of Salomon Bros. 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 1/8 point in light trading. Among tax-exempt municipal bonds, general obligations rose 3/8 point and revenue bonds were up point.

Yields on three-month Treasury bills were unchanged at 5.04%. Six-month bills fell 5 basis points to 5.07%. A basis point is one-hundredth of a percentage point. One-year bills were off 1 basis point at 5.25%.

The federal funds rate, the interest on overnight loans between banks, traded at 4.875%, down from 5.625% late Monday.