Dow Dips in Lightest Trading Since August

Stock prices remained stuck in a narrow trading range Tuesday in the lightest trading since the end of August.

The Dow Jones index of 30 industrial stocks fell 2.84 to 2,082.33. That marked the average’s 11th-straight finish inside the range of 2,080-2,101 points.

Trading volume on the New York Stock Exchange was 113.01 million shares, down from 116.42 million in the previous session and the lowest since Aug. 30, when 108.72 million shares changed hands.

Advancing issues outnumbered declines by about 4 to 3 in nationwide trading of New York Stock Exchange-listed stocks.

Jobs Report Awaited

Traders said the market could not overcome the stumbling block of weak bond prices. “Stocks are captive to the bond market,” said Brad Weekes, a trader with Donaldson Lufkin & Jenrette. Higher yields on U.S. Treasury bonds attract money that might otherwise go into stock investments.

The benchmark 30-year Treasury bond fell 13/32, raising its yield to 9.12% from 9.08% at Monday’s close.

Blue chip stocks moved in a narrow range throughout the day, mirroring their activity in Monday’s directionless trading, traders said. The next major economic indicator is the September jobs report due Oct. 7, which will give the first sign of September’s economic activity.

“People are really caught in a battle over the next unemployment numbers,” said trader William Bee of Prudential-Bache Securities Inc. “Will it be more worry over inflation or will it say the economy is slowing down and we should worry about a recession?”

Many investors reacted to the quandary by choosing to keep out of the stock market altogether, analysts said, as demonstrated by the scanty volume of recent sessions.

Market analysts also said the index of leading economic indicators for August due out Friday may give some hint of the likely direction of interest rates and could give the market some impetus.

Waiting for Rally

Other analysts suggested that this week’s narrow-ranged trading may be setting the stage for gains over the next few weeks. “You get the best rallies when few people are really expecting one to start,” said technical analyst Ralph Bloch of Raymond James & Associates.

Takeovers, restructurings and a stock buyback provided much of the interest in the day’s session.

Macmillan rose 1 3/8 to 88 5/8. The publishing company said it had agreed to an amended acquisition offer by Kohlberg Kravis Roberts & Co. of $90.05 a share. Later Maxwell Communications, which had offered a rival bid of $89 a share, said it was evaluating the situation.

SmithKline Beckman fell 2 to 46 1/8. The company announced a pretax charge against earnings of $375 million to $400 million and cuts of 1,600 jobs as part of a major restructuring.

IBM rose 1 to 113. The computer maker announced plans to buy back up to $2 billion worth of its shares, or roughly 3% at current prices.

Among other widely held stocks, AT&T; fell 1/8 to 26, General Electric rose to 42 7/8 and General Motors fell 1/2 to 73 5/8. Exxon fell 1/2 to 44 3/8, weighed down by the weakness in oil prices.

On the Tokyo Stock Exchange, the Nikkei 225-share index rose 165.81 points to close at 27,499.56.

In London, the Financial Times 100-share index ended 15.3 points higher at 1,808.0.