Profit Taking Pushes Dow Into 8-Point Fall

The stock market closed lower Wednesday in busy, trendless activity marked by profit taking in the wake of gains made in the previous record-breaking session.

The Dow Jones average of 30 industrials fell 8.30 to 1,947.27.

Losers outpaced gainers by about nine to eight on the New York Stock Exchange, with 832 issues down, 746 up and 435 unchanged.

Big Board volume totaled 200.14 million shares, compared to 230.35 million shares in Tuesday’s session.

Throughout the day, the market hovered within a close range of Tuesday’s close, but mostly on the downside.

“The market indulged in a little profit taking,” said Hildegarde Zagorski, an analyst at Prudential-Bache Securities. “You might call it the pause that refreshes.”

After a 43.03-point leap--its third-biggest gain in history--the closely watched index hit 1,955.57 at Tuesday’s close.

General Trend Upward

Analysts said they had expected that some profit taking would follow. But many agreed that the general trend was still upward.

Among Wednesday’s most active issues on the Big Board, IBM was down 1 at 128 5/8, General Electric was up 3 5/8 at 88 1/2 and American Express was up 1 at 60 3/4. Officials for the latter two companies had reportedly offered bullish reports in meetings with securities analysts.

General Motors was up 1 at 72.

Diamond Shamrock, subject of a takeover offer by T. Boone Pickens’ Mesa Limited Partnership, was up 1 1/8 at 14 5/8, Occidental Petroleum was down 1/8 at 25 5/8 and Exxon was down 1 1/8 at 69 3/8.

Chesebrough-Pond’s was up 1/2 at 72 1/8, and Paine Webber was up 1 5/8 to 34 3/4.

Large blocks of 10,000 or more shares traded on the NYSE totaled 3,707, compared to 4,166 on Tuesday.

Government bond prices moved higher Wednesday, slowing slightly from the rally of the previous session.

Prices of 30-year Treasury bonds rose about 3/8 point, with the yield dipping to 7.32% from 7.35% on Tuesday.

Analysts said profit taking curbed Wednesday’s gains and could be expected to continue today in the wake of advances during the past several weeks.

Bullish Tone

But the overall market tone remained bullish, analysts said, as government reports continued to indicate that inflation and the economy remained weak, which encourages speculation that the Federal Reserve Board may move to depress interest rates.

Many credit market participants were awaiting further economic clues from a Labor Department report due Friday on the nation’s unemployment rate.

In the secondary market for Treasury securities, prices of short-term governments were unchanged to 1/32 point higher; intermediate maturities rose 1/32 point, and 20-year issues were up 5/16 point, according to Salomon Bros.

In corporate trading, industrials were up 1/2 point in moderate trading volume and utilities rose point in lighter dealings.

Among tax-exempt municipal bonds, general obligations gained 1/8 point and revenue bonds rose point in light to moderate activity.

Yields on three-month Treasury bills were up 2 basis points at 5.42%; six-month bills rose 1 basis point to 5.44%, and one-year bills were down 1 basis point at 5.45%. A basis point is one-hundredth of a percentage point.

The federal funds rate traded at 6.75%, up from 5.875% late Tuesday.