Takeover Stocks Hit but Dow Climbs 9.42

Stocks were mixed Wednesday on Wall Street as traders moved into blue chips after continuing to dump issues related to real or rumored takeovers, analysts said.

Trading was active in a roller-coaster session that saw the Dow Jones average of 30 industrial stocks close up 9.42 at 1,826.63.

Even so, losers outpaced gainers by a margin of 11 to 6 on the New York Stock Exchange, with 1,026 lower, 563 higher and 399 unchanged.

On Tuesday, the closely watched index had dropped by 43.31 points--its fourth-steepest one-day decline ever--as the market reacted to recent developments in the insider trading scandal.

After Wednesday’s opening, the index moved more than 7 points lower, rallied to a 4.36 advantage by noon, then fell back to a loss of more than 3 points going into the last half-hour.

“The shock waves are still going through the system,” said Jack Baker, who heads block trading at Shearson Lehman Bros. “But the bond market acted fine today, and psychologically, the (stock) market seemed to be pretty good.”

In the credit markets, the U.S. Treasury’s bellwether 30-year bond was up by $10 per $1,000 in face value, lowering its yield to 7.43% from 7.52% on Tuesday.

Economic Reports Boost Bonds

Analysts attributed the bond market’s strength partly to Commerce Department reports on the upward revision of the gross national product and lower-than-expected housing starts and to remarks by Federal Reserve Board Vice Chairman Manuel Johnson that were interpreted as signaling no change in the Fed’s accommodative monetary policy.

Baker and other stock market analysts said that, like Tuesday, most of the selling in the stock market was concentrated on issues that had been involved or rumored to be involved in takeover activity.

Traders were worried that the scandal might spread to some of the major investment firms that back the takeover deals, weakening prospects that the deals would go through--and weakening demand for the stocks as well.

What changed Wednesday, they said, was that buying picked up in the blue-chip sector as traders retreated from the market turmoil into higher quality issues, they said.

Among the NYSE’s most active stocks, Lear Siegler fell by 10 7/8 to 79 after Wickes Cos. said it might not be able to complete its $1.7-billion acquisition of Lear because of difficulties in getting bank loans. Wickes led the most active list on the American Stock Exchange, unchanged at 4.

Variety of Losers

Other Big Board most active stocks included USX Corp., down 3/8 at 20 3/4; Gillette, down 2 at 57 3/4, and Goodyear, down 3 1/8 at 41 3/4. All have been involved in takeover activity.

Beverly Enterprises was down 2 3/4 at 17 after saying that it had ended discussions on a possible leveraged buyout with an investor group.

Lockheed was down 1 at 48 3/4.

Transworld, which has announced a restructuring, fell 2 to 36.

Among the blue chips, IBM was up 2 1/2 to 123, Eastman Kodak was up 3/4 to 65 1/8, Honeywell 7/8 to 69 1/8, Unisys--formerly known as Burroughs--1 1/8 to 78 7/8 and AT&T; 3/4 to 25 1/2.

General Motors was up 1 5/8 to 71, Ford Motor was up 1 7/8 to 57 and Chrysler was down 7/8 to 36 7/8.

Eli Lilly was up 1 to 73 1/2 while American Express was down 1 3/4 to 54 3/4.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 211.65 million shares.

Large blocks of 10,000 or more shares traded on the New York Stock Exchange totaled 3,793, compared to 3,677 on Tuesday. The NYSE index was up 0.14 at 136.62.

Standard & Poor’s index of 400 industrials rose 1.14 to 264.53, and S&P;’s 500-stock composite index was up 0.88 at 237.66.

In the secondary market for Treasury bonds, prices of short-term governments were up about 1/8 point, intermediate maturities rose in a range of 5/16 to 11/16 point and long-term issues rose 1 point, according to the investment firm of Salomon Bros.

In corporate trading, industrials and utilities were up 1 point in active trading.

Among tax-exempt municipal bonds, general obligations were up 1/2 point and revenue bonds were up 1/2 point in active trading.