Stock Prices Edge Higher in ‘Sleepy’ Session : Gains Reflect Technical Rebound; Dow Up 6.40

The stock market posted a modest gain Tuesday in generally quiet trading with little activity outside the takeover arena.

“It’s been pretty dull,” said Charles Jensen, a technical market analyst for the investment firm MKI Securities Corp.

The Dow Jones industrial index, which fell 17.07 Monday, bounced up 6.40 to close at 2,087.48.

Advancing issues outnumbered declines by more than 4 to 3 in nationwide trading of New York Stock Exchange. Big Board volume came to 142.22 million shares, up from Monday’s 135.77 million.

“The market’s flat and sleepy unless you’re involved in merger or buyback stocks,” said investment strategist Donald Hays of Wheat First Securities Inc.

“There’s very little incentive to buy,” Hays said. “I think there’ll be continued boredom until short-term interest rates start subsiding.”

Technical Rebound

The Dow industrials opened slightly higher, traded in a narrow range for most of the day and finished near the day’s highs.

Investors are using the pending economic reports as an excuse to put off commitments, analysts said. The August consumer price index and the personal income report due today could reveal more evidence about the economy.

So far, reports for August indicate a slowing, but “the September numbers might show some snap-back and that would be disconcerting,” said Value Line Asset president Mark Tavel.

Jack Baker, head of institutional trading at Shearson Lehman Hutton, said the gains reflected a technical rebound from Monday’s selloff. “People are nervous about yesterday’s decline. There doesn’t seem to be any urgency to rush into stocks. I don’t see the buying there as any more than a knee-jerk reaction to yesterday’s decline,” he said.

Alfred E. Goldman, director of technical market analysis at A. G. Edwards & Sons Inc. in St. Louis, said the market appeared to be consolidating its gains of the past few weeks.

“The market is not acting like it is ready to start a serious advance, because we are not seeing cumulative buying by institutional investors,” he said.

Kroger led the NYSE most active list, climbing 3 1/2 to 56. The investment firm Kohlberg, Kravis Roberts & Co. proposed a buyout.

In Tokyo, share prices closed sharply lower as reports that the Japanese Emperor was in critical condition worsened an already uncertain market outlook.

The Nikkei index fell 352.42 points, or 1.26%, to 27,548.58. It gained 34.62 Monday.

Stock prices finished higher in London in calm trading, supported by news of slower-than-expected growth in British bank lending during August.

The Financial Times 100-share index closed up 12.2 at 1,772.1.