Wall Street stocks rose to a record closing high Monday, their second in less than a week, propelled by a late burst of computerized program trading after blue chips had fallen most of the day.
Strength in transportation stocks also provided support.
The Dow Jones industrial index rose 11.00 to close at 2,743.36, eclipsing the record close of 2,734.64 set only last Thursday, when the Dow industrials leaped nearly 57 points.
The stock market meandered mostly at lower levels in lethargic activity during much of a session marked by several rounds of futures-related buying programs.
Initially, the market appeared to be continuing the downward trend that developed Friday after the rally on Thursday, when the Dow Jones industrial average surged 56.53 to smash the old record of 2,722.42 set Aug. 25, 1987.
Several rebounds linked to program trading failed to spark a sustained rally before renewed buying going into the final half-hour of the session generated fresh buying interest.
In the broader market, trading was slow and nervous before several economic reports this week. Some analysts expect the market to weaken before Friday's important August jobs report, which will give the first official indication of the economy's performance last month.
In the late going, advancing issues took the lead from declines in nationwide trading of New York Stock Exchange-listed stocks and 760 issues went up in price while 692 fell and 537 were unchanged.
Big Board volume slowed to 131.18 million shares, down from 165.93 million Friday.
Wall Street analysts say trading volume will probably remain fairly light this week before the long Labor Day weekend.
Also, analysts say investors are likely to be reluctant to trade heavily before the release of several potentially market-moving economic reports due this week.
Today, the government will report on revised figures for the second-quarter gross national product. Other key figures include July factory orders on Thursday and August unemployment and leading indicators on Friday.
"It was a pretty good performance with very few people around and low volume," said Paul Hennessey, vice president in trading at Boston Co.
Some analysts had expected stocks to pull back after the Dow industrials' record close last Thursday. On Friday, the Dow index slipped 2.28.
"I think some people were looking for some correction when the market closed down two points Friday. It did carry over for a short period of time (earlier today), but the market just refuses to do what people anticipate," Hennessey said.
Marshall Acuff, a Smith Barney portfolio strategist, described Monday's action as "deals and dividends," noting that the most actively traded issues rose for those reasons.
"In the idle days of summer, people focus on deals and dividends. The breadth was totally unexciting, the volume was totally unexciting. The market was up one hour and down one hour," Acuff said.
Shares in UAL Corp., parent of United Airlines, rose on news that Chairman Stephen M. Wolf had told his employees in an internal memo that the company's ownership may change. UAL stock gained 3 1/2 to close at 281 1/2, above the $275 a share that Los Angeles investor Marvin Davis has offered.
Wolf warned in the memo that ownership of the Chicago-based airline may change as a result of Davis' offer to buy the company and other factors. "It is too soon to tell what form a possible change in ownership may take, if there is one," Wolf said, "because alternatives are still developing."
Davis has set a Thursday deadline for UAL to respond to his bid for the company.
Among other airline stocks, AMR, owner of American Airlines, rose 2 1/8 to 81 1/4; Delta went up 2 3/4 to 80 1/2, and Southwest Airlines gained 1 1/8 to 27 1/2.
Texas Air rose 1 1/8 to 22 in American Stock Exchange trading. There were reports that Scandinavian Airlines System and an unidentified partner were interested in acquiring all or part of Texas Air-owned Continental Airlines.
Meanwhile, W. R. Grace jumped 1 3/8 to 37 1/8, responding to a USA Today article that said several brokerage houses have accumulated Grace shares for an unidentified client. The company said it was unaware of any group buying up its shares.
Texaco, which fell 1/4 to 53 1/2, led the Big Board's list of active shares as more than 6.5 million shares changed hands.
In Tokyo, stock prices closed broadly lower in lifeless trading. The 225-share Nikkei average lost 132.52, or 0.38%, to close at 34,607.41.
The London Stock Exchange was closed for a public holiday.
Bond prices fell in light vacation-time trading.
The Treasury's bellwether 30-year bond slipped 17/32 point, or $5.31, for every $1,000 in face amount. Its yield rose to 8.23% from 8.18% late Friday.
Bond prices rose in early August on speculation that the Federal Reserve would lower interest rates to stimulate economic growth. But traders have begun to decide that the economy is already growing fast enough for the Fed.
"Prospects of a near-term further easing on the part of the Federal Reserve Board appear to be very slim," said William Veronda, portfolio manager for Financial Programs Inc. in Denver.
Lower interest rates and low inflation are good for the bond market because they increase the value of bonds already on the market. The economic reports due this week should give a clearer picture of the U.S. economy's direction.
Credit markets were particularly quiet because the London financial markets were closed for a bank holiday.
Prices of short-term government issues fell 5/32 to 7/32 point, intermediate maturities fell about 3/8 point and long-term issues were down about 1/2 point, according to Telerate Inc., a financial data service.
The federal funds rate, the interest on overnight loans between banks, was quoted late at 8.875%, down from 8.938% Friday.
The dollar edged higher against most key currencies in thin trading as dealers awaited the upcoming data on the U.S. economy.
Gold prices were weaker. On the Commodity Exchange in New York, gold bullion for current delivery stood at $360 an ounce, down 70 cents from late Friday. Republic National Bank of New York quoted a late bid for gold of $359 an ounce, down $1.25.
Ronald H. Holzer, chief currency dealer for Harris Trust & Co. in Chicago, said the dollar got a boost from expectations that the spate of government reports to be released this week would show continued economic growth, thereby keeping interest rates strong.
Higher interest rates tend to support a currency.
Trading was subdued Monday by the closure of London financial markets for a bank holiday. Financial institutions also were shut down in Hong Kong for the Liberation Day holiday.
In Tokyo, where trading ends before Europe's business day begins, the dollar rose to a two-month high of 144.28 Japanese yen, up from 143.53 yen at Friday's close. It edged up further in Europe to 144.55 yen, and in New York to 144.52 yen from 143.90 yen.
The British pound fell in Europe to $1.5635 from $1.5725 in London late Friday. Sterling fetched $1.5636 in New York, down from $1.5660.
Prices of cattle futures fell sharply on the Chicago Mercantile Exchange, reflecting a seasonal slump in beef consumption during the dog days of summer.
On other markets, coffee futures rebounded, sugar futures declined, grains and soybeans were mostly lower, oil futures were mostly higher and precious metals retreated.
Coffee futures rallied on New York's Coffee, Sugar & Cocoa Exchange in a largely technical rebound from recent 14-year lows. Coffee settled 1.60 to 3.19 cents higher, with September at 82.25 cents a pound.
Most grain and soybean futures finished lower on the Chicago Board of Trade in reaction to rainfall in the Midwest, where corn and soybeans are approaching maturity.
Live cattle settled 0.15 cent to 0.70 cent lower, with the contract for delivery in September at 73.02 cents a pound; feeder cattle were 0.30 cent to 1.03 cents lower, with August at 83.37 cents a pound.