Stocks Retreat as Wary Traders Opt for Profits

Prices fell from record high levels on Monday as traders cast a wary eye toward coming economic news and decided to take their profits.

The Dow Jones industrial index, which closed above 2,500 for the first time on Friday, dropped 22.32 to 2,487.72.

Declining issues outpaced advancers by a margin of about 2 to 1 on the New York Stock Exchange.

Big Board volume totaled 168.14 million shares, against 209.98 million in the previous session.

In taking profits, traders were influenced by a drop in the dollar and Treasury bond prices, analysts said.

Bond prices declined in mostly light trading, dampened by investors’ concern that inflation could be rekindled.

The Treasury’s 30-year bond fell about 5/8 point, or $6.25 for every $1,000 in face value. Its yield jumped to 8.62% from 8.55% on Friday.

Corporate and municipal issues were unchanged to 3/8 point lower.

In the secondary market for Treasury bonds, prices of short-term governments declined 1/32 point to 1/8 point, intermediate maturities fell 3/16 point to 5/16 point, and 20-year issues lost 5/8. In corporate trading, industrials and utilities fell 3/8 point in light activity.

Yields on three-month Treasury bills, meanwhile, were unchanged at 5.56%. Six-month bills rose 1 basis point to 5.63%, and one-year bills gained 2 basis points at 6.14%.

The federal funds rate, the overnight interest charged on loans between banks, was 6.675%, unchanged from late Friday.