Investors on Sidelines; Dow Steady : Volume Light as Trade, Other Economic Reports Awaited

The Dow Jones industrial index closed unchanged Tuesday, unable to build on the previous day’s advance as investors shied away before today’s U.S. trade report for January.

“Essentially it was a dead market,” said Emmanuel Geronimous, senior vice president of Shearson Lehman Hutton Inc. “There were no major sales and no major buys.”

The Dow index, which rose 24.11 Monday and was higher early Tuesday, ended unchanged at 2,306.25.

Declining issues barely outpaced advancers in nationwide trading of New York Stock Exchange-listed stocks, with 722 issues down, 670 up and 554 unchanged.

Big Board volume came to 139.97 million shares, down from 140.40 million Monday. Analysts attributed the light volume to a lack of participation by institutional investors, who were awaiting a slew of economic reports later this week.

The market opened higher on the heels of a bond market rally that followed the government’s report of an unexpected 0.4% drop in retail sales last month.

“The consensus was looking for flat to up 0.4% and that helped relieve concern that the economy is overheating,” said Alfred E. Goldman, vice president for A. G. Edwards & Sons Inc.

The report stimulated speculation that consumer spending has eased and that inflation is beginning to subside.

But by mid-morning, the enthusiasm fizzled and the stock market drifted lower in the face of a weakening dollar, which suggested the possibility of higher inflation, further credit tightening by the Federal Reserve and higher interest rates.

After rallying briefly around midday, the market drifted through the rest of the session on light trading volume as big institutional investors left the market to await the government trade report scheduled to be released in Washington.

“Basically, after some upward stimulation and feeling that maybe the economy is slowing the market has gone back into hibernation to await the trade figures,” Goldman said.

Some economists have forecast a narrowing of the U.S. merchandise trade deficit in January to about $9.7 billion from $10.23 billion in December.

Investors were also awaiting reports later in the week on housing sales, industrial production and wholesale prices to determine whether the Federal Reserve’s tight credit policy is working, analysts said.

Among blue chip issues, Philip Morris finished down 3/8 at 118 3/8, General Motors was down 5/8 at 84 3/4 and Union Carbide finished off 5/8 at 30 1/2.

Gainers included Coca Cola, up 1/4 at 50 1/4; Merck, up 5/8 at 66 1/4, and American Telephone & Telegraph, up 1/4 at 31 3/4.

The Wilshire index of 5,000 equities closed down 2.068 at 2,917.116.

The NYSE’s composite index of all its listed common stocks fell 0.07 to 165.93.

Standard & Poor’s industrial index lost 0.26 to 340.95; its 500-stock composite index declined 0.18 at 295.14.

The NASDAQ composite index was off 0.55 to 406.01; the American Stock Exchange index closed down 0.01 at 330.53.

Stocks rebounded on the Tokyo Stock Exchange on Tuesday, bolstered by late buying by foreign institutional investors. Trading was moderate. The Nikkei 225-share index, which fell 148.82 on Monday, recovered 171.39 to close at 31,724.35.

Stocks also rose sharply on the London Stock Exchange, strengthened by what market investors welcomed as an inflation-fighting budget plan from Chancellor of the Exchequer Nigel Lawson. At the close, the Financial Times 100-share index was up 22.4 at 2,125.4.