Dow Up 11 on Takeover Talk, Economic Signals

Stock prices staged a moderate advance Monday as the second quarter of the year opened to a barrage of takeover news and rumors. Analysts said the market also benefited from a drop in open-market interest rates on fresh signs of a slowing economy.

The Dow Jones index of 30 industrials rose 11.18 to 2,304.80.

Big Board volume totaled 164.66 million shares, against 170.96 million in the previous session.

Advancing issues outnumbered declines by about 4 to 3 in nationwide trading of New York Stock Exchange-listed stocks, with 852 up, 622 down and 493 unchanged.

Volume on the floor of the Big Board came to 164.66 million shares, against 170.96 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 198.59 million shares.

The pace of business activity dropped off significantly in March, according to the results of a monthly survey of corporate purchasing executives.

That was taken as supporting evidence for the widely held belief on Wall Street that the economy has been slowing since February, responding to credit-tightening over the past year by the Federal Reserve in its efforts to restrain inflation.

Inflation Threat Defused

“I think there’s a pretty good shot that the economy has peaked out,” said Andrew Riley, a portfolio strategist with Yamaichi Securities. “I think the wisdom is that if the economy is slowing, the Fed will step off the brakes.”

For the time being, he said, “stocks are trading off the bond market. People are looking at short-term rates.”

Treasury Secretary Nicholas F. Brady told the International Monetary Fund’s Interim Committee that he forecasts no serious pick up in inflation for the United States or other nations.

Bank of Japan Governor Satoshi Sumita also said the threat of higher inflation has been defused and the remarks from the two were enough to boost bonds and in turn stocks.

Slower growth would presumably benefit the securities markets by reducing upward pressure on inflation and interest rates.

But some Wall Street analysts have voiced concern lately that stock prices might suffer as investors anticipated an accompanying decline in corporate earnings growth and a possible recession.

Stocks involved in takeover news or rumors dominated the active list.

“Merger mania is back,” said market analyst Alfred Goldman of A. G. Edwards, referring to gains in drug and entertainment issues spurred by recent takeover news. He said professionals were mainly involved in the speculative stock buying.

“The only thing that seems to be moving (the market) is (speculation about) who’s buying whom,” said Andrew McVeigh, Rodman & Renshaw Inc. co-director of research.

SmithKline Beckman, the volume leader, was up 4 3/4 at 65 7/8. The company and Beecham Group PLC of Britain said they may merge major elements of their operations.

Carson Pirie Scott jumped 7 1/4 to 21 1/8. The company said it received a takeover bid from P. A. Bergner & Co. with a price tag of at least $20 a share.

Tribune Co. rose 3 3/4 to 48 on reports that the Robert M. Bass Group had acquired a stake in the company. Officials at both Tribune and the Bass Group declined to comment on the speculation.

MCA gained 3 7/8 to 56 5/8. Sony denied reports that it was negotiating a deal to buy the company.

Regina Projects Loss

Gulf & Western advanced 1 3/4 to 49 1/2 in heavy trading. The company attributed the rise to investor interest in the media and entertainment industry.

The stock of Regina Co. eased 1 7/8 to 3 1/2. The maker of vacuum cleaners and floor-care products said it projects a loss for the third quarter, which ended March 31.

Lockheed Corp. shares gained 3 to 49 3/4 after a group led by corporate raider Harold Simmons said it had acquired a 5.3% stake in the aircraft company and may seek control.

CBS Inc. rose 2 to 175 1/2 on a rumor that the company was about to announce a special dividend of $70 a share. The company had no comment.

Atlanta-based Citizens & Southern, the bank holding company that is considering a $2.4-billion bid from NCNB Corp., fell 1 1/8 to 34 3/4.

As measured by Wilshire Associates’ index of more than 5,000 actively traded stocks, the market increased $11.68 billion, or 0.40%, in value.

The NYSE’s composite index of all its listed common stocks edged up 0.80 to 166.49.

Standard & Poor’s industrial index rose 1.87 to 341.29, and S&P;’s 500-stock composite index was up 1.52 at 296.39.

The NASDAQ composite index for the over-the-counter market gained 0.92 to 407.65. At the American Stock Exchange, the market value index closed at 329.47, up 1.16.

In other markets, share prices closed mixed Monday on the London Stock Exchange as a surge in pharmaceutical stocks was offset by signs of further weakness in the pound and concern about upward pressure on British interest rates.

The Financial Times-Stock Exchange 100-share index closed 4.6 points, or 0.2%, higher at 2,079.6. Volume was 397.1 million shares, down from 631.2 million shares on Friday.

In Tokyo, share prices surged in brisk trade, pushing the key Nikkei average to its fourth straight record close. Prices continued to rise on heavy seasonal demand marking the start of the new Japanese fiscal year on April 1, brokers said.

The Nikkei rose 203.39 points, or 0.62%, to a record closing 33,042.07 and finishing above 33,000 for the first time.

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