Dow Drops Back 0.68 After a Week of Gains

The stock market was mixed today, pausing after more than a week of steady gains.

The Dow Jones average of 30 industrials, up 93.83 points over the past seven sessions, slipped 0.68 to 2,732.88.

Advancing issues edged out declines on the New York Stock Exchange, with 755 up, 723 down and 505 unchanged.

Big Board volume totaled 152.22 million shares, against 144.23 million in the previous session.

The NYSE’s composite index rose .38 to 187.49.

Interest rates moved higher in the credit markets today. Prices of long-term government bonds dropped more than $5 for each $1,000 in face value, increasing their yields to the 8.89% -8.93% range.

Analysts said both the stock and bond markets seemed to be on hold awaiting results from the Treasury’s quarterly auction of bonds and notes.

Samuel D. Kahan, chief financial economist for Kleinwort Benson government Securities Inc. in Chicago, attributed the price drop to “nervousness around auction time”.

A warm reception was reported Tuesday for the first of the offering’s three installments, a $10.5-billion sale of three-year notes.

The financing continued with the sale of $10 billion in 10-year notes today, and winds up with $10 billion in 30-year bonds on Thursday.

But market watchers warned that strong demand for three-year notes may not necessarily mean equal demand for longer-dated issues.

In the secondary market for Treasury bonds, prices of short-term governments fell this morning by 1/16 to 3/32 point, intermediate maturities fell 1/4 point to 9/32 point, and long-term issues were down 9/32 point to 11/32 point, according to Telerate Inc., the financial information service.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 1.78 to 1,138.86.

Yields on three-month Treasury bills rose to 8.05% as the discount rose 1 basis point to 7.79%. Yields on six-month bills fell to 8.20% as the discount fell 1 basis point to 7.78%. Yields on one-year bills rose to 8.40% as the discount rose 2 basis points to 7.80%.

A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value.

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