Most Big Board Issues Sag, but Dow Gains 15

Prices closed mixed in a lackluster session on Wall Street Tuesday as traders kept a wary eye on fluctuations in the bond and commodities markets.

The Dow Jones average of 30 industrial stocks rose 15.30 to 2,322.60.

Declining issues outpaced those gaining by a margin of about seven to six, with 842 stocks down, 722 up and 415 unchanged on the New York Stock Exchange.

Big Board volume totaled 155.32 million shares, against 203.66 million in the previous session.

“It was actually a boring day,” said Dennis Jarrett, an analyst with Kidder, Peabody. “Everyone was trying to see what was going on in everyone else’s backyard.”

Noting the light volume, Jarrett said many traders stayed out of the market after a sharp reversal in Monday’s session “just to get a better feel of what was taking place.”

Soaring commodities prices--considered an indicator of rising inflation--and a subsequent drop in Treasury bond prices on Monday caused the stock market to give up sizable gains and finish on the down side.

Analysts said investors were nervously tracking the other financial markets Tuesday, and fluctuations in the Dow Jones average--which reversed direction several times during the first half of the session--reflected Wall Street’s jitters.

Commodities prices were lower Tuesday and the bond market was up.

Michael Metz, an analyst with Oppenheimer & Co., said traders feared that the Federal Reserve Board would be less accommodative in its credit policy and more inclined to raise interest rates if commodities prices rise.

AT&T; Stock Shines

The industrial average had a late upward surge of nearly nine points, but Jarrett attributed the jump to program buying.

AT&T; led the NYSE most active list and rose 3/4 to 25 3/4.

Among the big gainers were IBM, which rose 2 3/8 to 165 3/8; Teledyne, which jumped 3 3/4 to 325; Exxon, which rose 1 1/2 to 90; Eastman Kodak, which was up 1 1/2 to 80 1/2, and Southern California Edison, which rose 5/8 to 30 1/2.

Minnesota Mining & Manufacturing, which declared a 2-for-1 stock split, rose 3 to 129.

Also on the most active list was Texaco, which fell 1 to 36 3/4. At the company’s shareholders meeting in Denver, Texaco executives gave no indication that an end to their multibillion-dollar dispute against Pennzoil was near.

Pennzoil, meanwhile, tumbled 1 7/8 to 84 3/8.

In the credit markets, bond prices rose modestly as traders shook off the previous day’s worries about higher commodity prices.

Analysts said a decline in a closely watched index of commodity prices cooled fears of higher inflation temporarily. But traders continued watching for signs of higher prices and tighter credit.

‘Fears Overblown’

“The markets are very tightly focused on any signs that inflation might be accelerating,” said Marshall Front of the investment firm Stein Roe & Farnham in Chicago.

The bond market continued to track the Commodity Research Bureau’s index of 26 raw materials, which had posted its largest one-day jump in a decade on Monday and sent bond prices plunging.

“I think the fears were overblown,” said Martin Mauro, senior economist for Merrill Lynch Capital Markets in New York. “But it (inflation) is probably something that’s going to remain a concern.”

The Treasury’s 30-year bond, which lost about $20 for each $1,000 in face value Monday, was up about 1 point, or $10 per each $1,000 in face value. The yield on the bond dipped to 8.71% from 8.79 Monday.

The federal funds rate, the interest on overnight loans between banks, traded at 6.688%, down from 6.875% Monday.

Monday’s big jump in commodity prices was particularly alarming to the bond market because it came on a day when the dollar was relatively stable against most major currencies. That prompted worries that inflation had heated up to a level that would force the Federal Reserve to tighten credit.

While some of those concerns lingered Tuesday, the inflation scare apparently had diminished.

Mauro said traders were looking ahead to Thursday when the government was scheduled to release its latest foreign trade figures. On Friday the government is to release its monthly report on wholesale prices.

Both reports will be crucial to charting the future of inflation and interest rates, analysts said.