Dow Declines 7.41 Despite Rally in Transport Stocks

Wall Street stocks edged lower today in slow trading on profit-taking, but the drop was tempered by a strong dollar and a fresh rally in transport stocks, headed by takeover target UAL Corp.

The Dow Jones industrial average fell 7.41 points to 2,744.68. But the Dow Jones transportation average rose 5.69 to 1,532.01, led by a gain in UAL, parent of United Airlines.

Trading was quiet with only 147 million shares changing hands. In the broader market, declining issues outnumbered advances by about 4 to 3 on the New York Stock Exchange, with 826 down, 613 down and 523 unchanged.

Big Board volume totaled 145.18 million shares, against 133.30 million in the previous session.

The NYSE’s composite index fell 0.52 to 195.85.

Action centered on UAL, which rose 3 1/2 to 290 1/2 on speculation that a bid higher than management’s $300 a share takeover offer might emerge.

A stronger dollar also helped to dampen the Dows decline, as the currency rose despite concerted intervention by the Federal Reserve and a dozen other central banks.

Bond prices moved slightly lower today as the credit market marked time in the wake of Friday’s rally.

A spreading belief that the Federal Reserve will keep its policy on hold until a clearer economic picture develops has tempered traders’ buying enthusiasm.

The Treasury’s benchmark 30-year bond declined 7/32 point, or nearly $2.50 for each $1,000 in face amount by late morning. Its yield rose to 8.14% from 8.12% late Friday.

Raymond W. Stone of the investment firm Stone & McCarthy Research Associates Inc. said the market struggled today but volume was thin following the long Labor Day weekend. Financial markets were closed Monday.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8 15/16%, the same as late Friday.