Late Selling Pushes Stock Prices Lower

A late round of selling pushed stock prices lower Monday, wiping out a mild early bid to extend last week’s rally.

The Dow Jones average of 30 industrials, up nearly 15 points at its midday peak, closed with a 3.91 loss at 2,139.58. The average rose 51.21 points last week.

Declining issues outnumbered advances by about 6 to 5 in nationwide trading of New York Stock Exchange.

Volume on the floor of the Big Board came to 124.16 million shares, down from 133.77 million in the previous session.

Analysts said stocks drew some early benefit from a rise in the dollar against leading foreign currencies.

But that upbeat theme seemed to be overridden by caution about prospects for Federal Reserve policy and the pending monthly report due out Wednesday on the nation’s international trade balance.

Brokers said it would be no surprise if Fed policy-makers, meeting today and Wednesday, decided to tighten credit conditions a bit further, especially if the news on trade isn’t good.

Advance estimates call for the October trade data to be about the same as September’s, when imports exceeded exports by $9 billion, excluding freight and insurance costs.

Jack Solomon, technical analyst at Bear, Stearns & Co., said a generally dull market weathered some futures-related sell programs late in the day.

Traders said activity in the major U.S. financial markets was muted as investors evened their positions ahead of a host of U.S. economic indicators to be released this week.

Takeover news and rumors provided the day’s few instances of brisk activity.

Pennwalt jumped 14 3/4 to 98. A New York partnership said it would offer $100 per share for the Pennwalt stock it doesn’t already own.

Pillsbury climbed 3 7/8 to 62 1/8. Grand Metropolitan PLC raised its offer for the company’s stock from $60 a share to $63 a share.

And Alexanders Inc., discussed as a possible takeover candidate, rose 4 to 67.

Among the blue chips, General Electric was up 1/8 at 46; International Business Machines gained 1/8 to 120 1/2; Exxon was unchanged at 44 5/8; American Telephone & Telegraph slipped 1/4 to 29 1/4, and Philip Morris was down 3/8 at 97 1/4.

American depositary receipts of Japanese stocks gave ground following a decline in the Tokyo market. Honda Motor dropped 2 to 155 1/4; Kyocera fell 1 3/4 to 82 1/4, and Matsushita Electric was down 3 3/8 to 192.

In foreign trading, share prices slid on the Tokyo Stock Exchange in dull trading amid investor worries over the worsening health of Emperor Hirohito and ahead of this week’s U.S. merchandise trade data, brokers said. The Nikkei 225-share average closed 121.23 points lower at 29,672.29.

Share prices also closed lower on the London Stock Exchange with the Financial Times 100-share index closed 2.4 points lower at 1,747.9.