Blue Chip Rally Boosts Dow 32 on Spotty Day

The stock market rallied today as investors focused on blue chip issues at the expense of the broader market.

The Dow Jones average of 30 industrials rose 32.67 to 2,485.64.

Advancing issues nearly matched decliners on the New York Stock Exchange with 764 up, 746 down and 465 unchanged.

Big Board volume totaled 155.94 million shares, against 166.21 million in the previous session.

The NYSE’s composite index rose 1.69 to 169.20. At the American Stock Exchange, the market value index gained 0.33 to 313.17.

Analysts said the market was ripe for an advance after the Dow Jones average of 30 industrials fell to a 14-month low in the previous session. But today’s gains were spotty, and market watchers doubted the advance would be sustained.

Investors preferred blue chip issues because of their “high visibility of earnings and growth,” said Charles Jensen, chief technical analyst at MKI Securities Corp. But the broader market languished.

While investors went bargain hunting, the market drew support from a number of factors, including the possibility that there will be a resolution this week on the budget deficit, a firming bond market and the fact that stock prices remained buoyant despite Soviet Foreign Minister Eduard A. Shevardnadze’s assessment that war could break out at “any moment” in the Middle East.

Separately, enthusiasm for potential takeover targets was rekindled by hectic trading in MCA, whose stock skyrocketed after it was disclosed the company is discussing a possible buyout with Japan’s Matsushita Electric Industrial Co. at a price reported to be between $80 and $90 a share, or as high as $7.5 billion.

U.S. Treasury bond prices were unchanged to slightly higher in early trading today as the market attempted to recover from another oil-related sell-off.