Worries Over Inflation, Rates Depress Stocks : Dow Loses 11.73 on Fears of Contraction in Credit

The stock market posted its third straight loss Monday, still mired in uncertainty about the outlook for inflation and interest rates.

The Dow index of 30 industrials, down 14.94 last Thursday and Friday, fell 11.73 to 2,107.40.

Declining issues outnumbered advances by about 4 to 3 in nationwide trading of New York Stock Exchange-listed stocks. Big Board volume totaled 148.80 million shares, up from 113.40 million Friday.

Analysts said traders remained concerned about a possible increase in inflationary pressures and rising interest rates.

News on Friday of continuing expansion in payroll employment during July prompted increased talk that the Federal Reserve might tighten credit further.

“The Fed is being restrained and cautious in its moves toward firmness, but the economic data continue to argue that a still firmer stance is likely in the near future,” said analysts William Griggs and Leonard Santow at Griggs & Santow Inc. in a weekly financial commentary.

Fannie Mae Heavily Traded

Losers among the blue chips included American Express, down 7/8 at 28; International Business Machines, down 3/4 at 123 1/8; Ford Motor, down 3/4 at 53; General Electric, down at 41 1/2, and Philip Morris, down 5/8 at 91 3/4.

Interco climbed 4 to 72. City Capital Associates raised its offer for the firm from $64 to $70 a share.

Federal National Mortgage rose 5/8 to 49 1/2 on large volume, trading at record highs.

Stock prices on the Tokyo Stock Exchange also lost ground Monday in light trading for the second straight losing session since the Nikkei reached an all-time high last Friday.

The Nikkei 225-share index, which lost 61.20 Saturday, dropped 109.06 to close at 28,253.12.

Prices were little changed on London’s Stock Exchange; the Financial Times 100-stock index settled up 0.1 point at 1,876.0.