Dow Declines in Session Marked by Profit Taking

NEW YORK — Stock prices finished mixed Thursday in a session marked by profit taking in many of the blue chips.

The Dow Jones average of 30 industrials, after reaching a record high on Wednesday, dropped back 12.76 to 2,451.21.

Volume on the New York Stock Exchange came to 195.40 million shares, against 207.46 million in the previous session.

A drag on the market was a rise in open-market interest rates, which pushed prices of long-term government bonds lower.

Stock trading volume has increased this week as the market continued the rally it began in late May. Analysts have generally been hoping for a pickup in activity to suggest that investors are buying with confidence and conviction.

But the market’s “breadth”--the number of stocks participating in the advance--was unimpressive.

“The market had a very narrow advance with most measurements failing to confirm the new high in the DJIA, a condition which if not soon corrected usually leads to some problems,” said Newton Zinder at E. F. Hutton & Co.

Losers among the blue chips included American Express, down at 33 3/8; General Electric, down 7/8 at 55 3/4; Philip Morris, down 2 1/8 at 91; International Business Machines, down 1/2 at 166, and RJR Nabisco, down 1 at 53 5/8.

Airborne Freight fell 4 1/2 to 28, posting one of the day’s biggest percentage declines. Late Wednesday the company estimated lower earnings for the second quarter.

Conrail led the active list, up 3/8 at 33. The stock, which was added to Standard & Poor’s 500-stock composite index, apparently benefited from buying by index funds that seek to duplicate the performance of the 500.

Advancing issues outnumbered declines by about 9 to 8 on the NYSE.

Meanwhile, trading was moderate in the credit markets, where the Treasury’s 30-year bond dropped about 3/4 point, or $7.50 per $1,000. Its yield jumped to 8.51% from 8.45%.

Corporate and municipal bond prices also declined.

Analysts said the dollar’s decline helped depress bond prices. Investors were also concerned about a recent hike in oil prices, which has deepened inflation worries.

On Thursday, August contracts for West Texas Intermediate rose 35 cents to $21.23 a barrel on the New York Mercantile Exchange.

Prices of short-term government issues declined in the range of 1/8 point to 3/16 point, intermediate maturities fell point to 17/32 point and 20-year issues dropped 23/32 point.

The federal funds rate, the interest on overnight loans between banks, was 6.563% Thursday, up from 6.438% Wednesday.