Dow Gains 3.65 Despite Late Selling : Stocks Advance for 2nd Straight Day; Volume Increases

The stock market weathered some late selling to post a moderate gain for the second straight session Tuesday.

The Dow Jones average of 30 industrials, up about 15 points at its midday high, closed with a 3.65-point advance at 1,845.47. The average rose 9.56 on Monday.

Volume on the New York Stock Exchange came to 145.87 million shares, against 133.24 million the day before.

The market has been moving erratically upward for the past several weeks, recovering some of the ground it lost in its early-September selloff.

Analysts say there has been no dominant theme to the advance, and no prominent stock groups have taken a leadership role.

But many individual issues have responded briskly to news or rumors of impending takeovers or corporate restructuring moves. In addition, better-than-expected third-quarter earnings reports have stirred interest in a variety of issues.

Brokers said such developments continued to set the tone for the market Tuesday.

Planning Research Jumps

Planning Research jumped 8 5/8 to 31, leading the list of percentage gainers among Big Board issues. Emhart Corp. plans to acquire the company for $31.50 a share.

Beverly Enterprises picked up 3 1/8 to 20 1/2. The company said some of its top executives and an outside investor group notified it that they were considering the possibility of a leveraged buyout.

Merrill Lynch rose 1 1/8 to 41 3/8 in active trading. On Monday, the company posted third-quarter earnings that were more than double the results for the comparable period a year earlier.

Lubrizol gained 3 5/8 to 33 5/8 following the company’s report Monday of sharply higher third-quarter earnings and an increase in its quarterly dividend to 30 cents a share from 29 cents.

Revco D. S. fell 1 3/8 to 35 3/4. The company said it knew of no reason for the unusual activity in its shares.

Goodyear Tire & Rubber led the NYSE active list, down 1/2 at 47 3/4 on turnover of more than 4.3 million shares. The stock jumped 4 1/8 points Monday after the company, which has been the subject of takeover speculation, said it had retained investment bankers to advise it on a possible restructuring plan.

Computer Stocks Sag

Computer and other technology issues were generally weak. International Business Machines dropped 1 3/8 to 120 3/4, Digital Equipment 1 5/8 to 96 7/8, Texas Instruments 1 1/2 to 109 3/4 and Hewlett-Packard 3/8 to 38 3/4.

In the overall tally on the Big Board, advancing issues outnumbered declines by four to three, with 888 up, 661 down and 454 unchanged.

Bond prices retreated and short-term interest rates edged higher Tuesday as traders weighed the prospect of a heavy round of government borrowing over the next two weeks.

The price of the Treasury’s bellwether 30-year issue fell by about $7.50 for each $1,000 in face value as its yield rose to 7.79% from 7.72% late Monday.

The Treasury is expected to announce plans today to sell as much as $30 billion in three- and 10-year notes and 30-year bonds next week.

Average Yield Drops

On the eve of that announcement, it sold $7 billion in six-year, 11-month votes for an average yield of 7.2%, the lowest average yield on such an issue in a decade. The Treasury received bids totaling $16.37 billion.

The 7.2% average yield was the lowest since a similar issue was sold for a yield of 7.02% on Nov. 1, 1976, and was down from 7.33% at the most recent auction of issues with a comparable maturity on June 25.

In the secondary market for Treasury bonds, prices of short-term governments fell 1/8 point, intermediate maturities were down by between point and 1/2 point and 20-year issues were off 3/8 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 were down point and utilities fell 3/8 point in quiet trading, Salomon Bros. said.

Among tax-exempt municipal bonds, the investment firm said general obligations fell point and revenue bonds were down 3/8 point. Trading was light-to-moderate.

Yields on three-month Treasury bills rose 4 basis points to 5.23%. Six-month bills were also up 4 basis points to 5.36% and 12-month issues were rose 2 basis points to 5.49%. A basis point is one-hundredth of a percentage point.

The federal funds rate, the interest on overnight loans between banks, traded at 5.75%, down from 5.813% Monday.