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Stock Prices Head Lower; Dow Down 3.57 : Traders Said to Be Still Edgy Over Friday’s Drop

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From Associated Press

Stock prices posted some scattered losses in a quiet session Monday, extending last week’s decline.

The Dow Jones index of 30 industrials, which had fallen 36.97 on Friday, slipped 3.57 to 2,282.50.

Declining issues outnumbered advances by about 7 to 5 in nationwide trading of New York Stock Exchange-listed stocks, with 602 up, 861 down and 509 unchanged.

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Big Board volume came to 143.52 million shares, down from 173.56 million in the previous session. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 172.72 million shares.

Interest rates edged upward in the credit markets amid expectations of action soon by the Federal Reserve to tighten credit.

Prime Rate Rises

Analysts said stock traders also were in an edgy mood after the market’s decline Friday, which was the largest since Wall Street’s winter-long rally began.

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Prices tumbled Friday after the Labor Department reported that producer prices of finished goods jumped 1% in January, exceeding analysts’ projections.

Then stocks had to absorb another jolt when banks across the country raised their prime lending rates from 10.5% to 11%.

On Monday, however, early selling of blue chips apparently pushed them down to levels where they attracted a few traders who had been waiting for a pullback as a buying opportunity.

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Emery Air Freight climbed 1 1/2 to 7 5/8 as the most active NYSE issue. The company agreed to be acquired by Consolidated Freightways for $7.75 a share. Consolidated’s shares fell 1 7/8 to 32 7/8.

Long Island Lighting gained 1 1/2 to 14 1/4. Over the weekend, a federal judge dismissed a verdict of fraud returned against the company by a jury in December.

Losers among the blue chips included Eastman Kodak, down 7/8 at 47 1/2; General Electric, down 1/8 at 46 1/8, and American Telephone & Telegraph, down 1/4 at 31 3/8.

By contrast, General Motors, which a week ago announced a dividend increase and plans for a two-for-one stock split, rose 1 3/8 to 91 3/4.

Johnson & Johnson gained 1/2 to 89. The company reported higher fourth-quarter earnings, increased its dividend and voted a two-for-one stock split.

Champion Products, traded on the American Stock Exchange, jumped 12 1/8 to 75 3/4 on word of an agreement for Sara Lee Corp. to acquire it for $77 a share.

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The Wilshire index of 5,000 equities closed at 2,884.333, down 0.484, or 0.02%, from the previous day.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,983, compared to 3,474 on Friday.

The NYSE’s composite index of all its listed common stocks gained 0.14 to 164.15.

Standard & Poor’s industrial index rose 0.13 to 337.39; its 500-stock composite index was up 0.52 at 292.54.

The NASDAQ composite index dropped 1.10 to 401.27; the Amex index closed at 321.76, down 1.01.

In Tokyo, share prices fell Monday. The Nikkei index dropped 146.67, or 0.46%, to close at 31,985.32. It rose 53.56 to a record close of 32,131.99 on Friday.

Stock prices closed sharply lower in London but above their worst levels Monday. The Financial Times 100-share index was down 23.4, or 1.1%, at 2,032.7.

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