Market Trims Early Losses; Dow Dips 1.69

The stock market lost ground Monday, undermined by apprehension over the Iranian arms imbroglio and strongly influenced by computerized program trading, analysts said.

At the close of trading, the Dow Jones average of 30 industrials--which had been off by about 20 points for all but the last hour--stood at 1,912.54, down 1.69 points.

Losers outpaced gainers by about three to two, with 960 stocks down, 637 up and 417 unchanged on the New York Stock Exchange.

Big Board volume totaled 133.75 million shares, against 93.53 million in the previous session.

“This morning, it was ‘Irangate,’ the soft dollar and the soft bond market, and if it hadn’t been for the arbs, the Dow wouldn’t have rallied to over 1,900,” said Alfred E. Goldman, an analyst at A. G. Edwards & Sons in St. Louis.

Goldman was referring to computerized program trading by arbitrageurs, who sought profits by playing off differences between stock index futures and their underlying “baskets” of stocks.

Chesebrough-Pond’s led the Big Board’s most-active list at 68 1/2, up 3, following a $66-per-share tender offer by American Brands.

Carter Hawley Hale Stores, a takeover candidate, was up 1 3/8 at 54.

Ford Motor was up 1 1/2 at 60, while General Motors was down 1 5/8 at 71. GM Class E stock was down 5 at 26 3/8, after the company said it would pay about $700 million for H. Ross Perot’s stake in the company and remove him as chief of its EDS division and as a director.

Lear Siegler, which said it received a renewed buyout proposal from AFG Partners at $85 a share, was up 1 at 83.

At the American Stock Exchange, the market-value index fell 0.14 to 264.67. The NASDAQ composite index for the over-the-counter market closed at 357.87, down 1.70.

In the credit markets, bond prices finished little changed, bouncing back in afternoon trading after slumping earlier in the day.

Short-term interest rates edged higher.

Prices of the closely watched 30-year Treasury bond finished unchanged, yielding 7.41%, the same as late Friday.

In the secondary market for Treasury bonds, prices of short-term governments were off 3/32 point, intermediate maturities fell 2/32 point and long-term issues were unchanged to 2/32 point lower, according to the investment firm 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.

The federal funds rate, the interest on overnight loans between banks, traded at 7%, up from 6.625% late Friday.