Rally Halts Broad Slide as Dow Finishes Off 16

Stock prices finished broadly lower today, although a late-afternoon rally trimmed the losses for the session.

The Dow Jones average of 30 industrials, which rose 19.82 points on Monday, fell 16.21 to 2,606.31.

Declining issues outnumbered gainers by about 3 to 2 on the New York Stock Exchange, with 579 up, 895 down and 497 unchanged.

Big Board volume totaled 134.07 million shares, against 130.95 million in the previous session.

The NYSE’s composite index fell 1.02 to 182.33.

Trading activity was moderate, picking up the pace from Monday which was the slowest trading day of the new year.

Stock prices had risen in three of the past four sessions after sinking for most of the month of January.

Some analysts said today’s decline was an indication that the market’s broader trend is still lower.

The prospect of rising interest rates has inhibited recent price gains, making yields on short-term Treasury securities more competitive with those available on stocks and dimming chances for corporate earnings growth.

Those worries grew more pronounced as the Treasury’s auction of $30 billion in new securities approached this week.

In the credit markets today, rates edged up on six-month Treasury bills while yields on 30-year Treasury bonds rose to the 8.56% level from 8.53% late Monday.

Bond prices fell in early trading today. The benchmark 30-year bond was down 3/8 point, or $3.75 per $1,000 face amount, around midday. Its yield rose to 8.57% from 8.53% late Monday.

Money market economists said traders were slightly skittish because of uncertainty over the prospects for the Treasury Department auction of 10-year and 30-year bonds Wednesday and Thursday.

The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8 3/16%, down from 8 1/4% late Monday.