Dow Gains 0.91 in Seesaw Trading : Stock Prices Track Wide Swings in the Bond Market

The stock market rode out alternating waves of buying and selling to post a small gain Wednesday in stepped-up trading.

The Dow Jones index of 30 industrials, up about 30 points and down about 15 at its extremes, closed with a gain of 0.91 at 2,353.61.

Volume on the New York Stock Exchange reached 197.44 million shares, up from 164.18 million in the previous session.

Interest rates dropped in early activity, giving stock prices a lift.

Treasury Secretary James A. Baker III said the economic summit that concluded in Venice, Italy, on Wednesday had produced “real progress” on a variety of issues.

Brokers also said expectations are running high for second-quarter earnings reports, which will start coming out less than a month from now.

That helped prompt some investing institutions to step up their buying in order to show increased stock holdings when they make their midyear reports to clients at the end of June, analysts said.

But the bond market gave up most of its gains as the session progressed. That, in turn, touched off a wave of afternoon selling in the stock market, which left prices fluctuating erratically just before the close.

With all its fits and starts, the market managed to post its third-straight gain this week. The Dow Jones industrial index shows a net advance of 27.46 points since last Friday’s close.

Allegis climbed 2 to 92 3/4 and led the NYSE active list on turnover of more than 3.3 million shares. The company, which has been the subject of various restructuring proposals, said it was likely to sell its hotel and car-rental operations and concentrate on its United Airlines business.

JWT Group Jumps

JWT Group jumped 9 3/4 to 49. The advertising company said it received a $45-a-share takeover proposal from WPP Group, a British marketing firm.

Traders bid the stock up past WPP’s price, evidently anticipating competition for control of JWT.

International Business Machines was a drag on the blue-chip sector, falling 2 1/8 to 157 3/4. Analysts said the pressure on the stock was prompted by unconfirmed rumors of delays affecting the company’s new line of personal computers.

In the credit markets bond prices rallied briefly, then retreated, as traders digested the mostly disappointing news from the economic summit in Venice.

By late in the day, the Treasury’s 30-year bond was trading at levels unchanged from late Tuesday, with a yield of 8.73%.

The morning rally, which had carried the long bond’s price up a point over its level late Tuesday, was also fueled by traders trying to cover short positions, analysts said.

Analysts said traders were still anxiously awaiting economic data to be released Friday on the nation’s trade balance and producer prices--reports that could provide more information on the dollar and inflation.

In the secondary market, prices of short-term governments were up 1/32 point, intermediate maturities were unchanged and 20-year issues were up 3/16 point, according to figures provided by the financial information service Telerate Inc.

In corporate trading, industrials and utilities were both unchanged. Among tax-exempt municipal bonds, general obligations were up point and revenue bonds were up 3/8 point, Salomon Bros. said. Trading was quiet.

Yields on three-month Treasury bills fell 3 basis points to 5.47%, according to Telerate. Six-month bills declined 2 basis points to 5.87% and one-year bills were off 4 basis points at 6.34%. The federal funds rate, the interest on overnight loans between banks, traded at 6.69%, up from 6.50% late Tuesday.