Profit-Taking Deflates Rally; Dow Off 10.64

Stock prices closed with moderate losses on Wall Street today as nervous traders took their profits late in the day and ended the market’s broad advance.

The Dow Jones industrial average fell 10.64 to 2,505.20.

Advancing issues outnumbered decliners by a margin of about 5 to 3 on the New York Stock Exchange, with 998 up, 581 down and 425 unchanged.

Big Board volume totaled 188.32 million shares, against 202.21 million in the previous session.

The NYSE’s composite index rose 0.37 to 172.59.

At the American Stock Exchange, the market value index rose 1.19 to 309.63.

Prices on the NYSE were higher today--with the Dow Jones industrial average climbing as much as 49 points--until early afternoon as the stock market responded to another plunge in oil futures prices. The November contract for light, sweet crude skidded $3.14 to $33.95 a barrel on the New York Mercantile Exchange, following a plunge of $2.42 a barrel Monday.

A decline in energy costs eases the threat of higher inflation and increases the likelihood that the Federal Reserve will allow interest rates to fall.

Analysts also attributed today’s early advance to “follow-through” buying after Monday’s rally in which the Dow Jones average soared more than 63 points. But traders feared the market might resume its recent bearish course and began to take profits from the two-day advance while they could.

Stock prices also surged in Tokyo early today, and the gain, the index’s largest one-day advance, helped set a positive tone on Wall Street, analysts said.

The closely tracked 30-year Treasury bond added 5/32 point, or just over $1.25 for every $1,000 in face amount, after surging 1 1/32 point, or $10.32, on Monday.

The key bond’s yield, which falls when the price rises, edged down to 8.83% from 8.84% late Monday.