Dow Rebounds 11.38 on Program Trading

Stock prices moved moderately higher in light trading today as bargain hunters and computer-program buying helped awaken the quiet market late in the session.

The Dow Jones average of 30 industrials rose 11.38 to 2,893.56. On Monday, the Dow had fallen 53.71 points, its largest loss since dropping 77.45 points Jan. 22.

Advancing issues outnumbered losers by about 10 to 9 on the New York Stock Exchange, with 778 up, 708 down and 519 unchanged.

Big Board volume totaled 134.93 million shares, against 133.47 million in the previous session.

The NYSE’s composite index rose 0.68 to 195.61.

Activity was slow all day with many analysts saying participants were waiting for signals of whether the market is headed for a downward correction. “It’s been pretty quiet action. Basically the market is just buying time,” said Jon Groveman, a stock market analyst at Ladenburg, Thalmann & Co.

Others said the market would likely hover in a range as broad as 2,850 to 2,950 points in the Dow industrial average.

“I don’t think we’re going to see a collapse, but an absence of buying interest until we get an indication of where the (federal) budget talks are going,” said Alan Ackerman, market strategist at Gruntal & Co.

Program trading helped push the market up in the closing hours as arbitragers tried to take advantage of differences between stock index futures and the cash value of the stocks that make up the index, said Thomas Walsh, head of equity trading for Nikko Securities Co. International Inc.

Walsh said today’s light volume showed relatively few traders were participating in the market and institutional investors were not active.

Bond prices fell in light early trading today as selling momentum from Friday and Monday continued into another session.

The Treasury’s benchmark 30-year bond lost 5/32 point, or about $1.56 per $1,000 in face amount, after dropping more than $4 on Monday. Its yield, which rises when prices fall, edged up to 8.47% from late Monday’s 8.46%.

There was no news to influence the market, traders said, and it appeared that the selling wave triggered by a bullish economic report on Friday still has a grip on the market.

In the secondary market for Treasury bonds, prices of short-term and intermediate governments fell from 1/32 point to 1/16 point and long-term issues fell as much as 5/32 point, according to the Telerate financial information service.

The movement of a point equals 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 outstanding Treasury issues with maturities of a year or longer, fell 0.91 to 1,157.36.

Yields on three-month Treasury bills were unchanged at 7.98% as the discount remained at 7.73%. Yields on six-month bills rose to 8.05% as the discount gained 1 basis point to 7.64%. Yields on one-year bills rose to 8.11% as the discount rose 3 basis points to 7.56%.