STOCKS : Market Shifts Into Low Gear; Dow Dips 0.49

Wall Street stocks plodded through the slowest day of trading in nearly three weeks Monday, ending with small losses as investors, wary about the Mideast crisis and interest rates, sat on the sidelines.

“This is typical action for this time of year,” said A. C. Moore, a market analyst with Argus Investment Management. He said the market was beset by “crosscurrents.”

The widely watched Dow Jones industrial index ended nearly unchanged, losing 0.49 to close at 2,593.32. In the broader market, declining shares outpaced advances 1,011 to 493 on volume of 118.6 million shares.

Trading was the lightest since 63 million shares changed hands Nov. 23, the day after Thanksgiving, when trading was further slowed by a power outage.

“The market’s still somewhat on the defensive,” said Oppenheimer & Co. market strategist Michael Metz. “The fear is that all the good news is out.”

Indeed, despite recent optimism that the Persian Gulf crisis will be ended peacefully and that U.S. interest rates will fall, there is no evidence that either scenario will be proven true soon.

“It’s a very tough call. I think there’s a lot of confusion,” said Tom Callahan, an executive vice president at Yamaichi International.

Investors may get more direction from this week’s economic reports, including November consumer prices and October trade data, due today.

The Federal Reserve’s policy-making Open Market Committee is also scheduled to meet today.

Moore believes that the market will still stage a seasonal year-end rally.

“I think stocks are in something of a waiting period with respect to the Mideast and further moves the Fed may make on interest rates,” he said. “At this time, there are no driving forces one way or the other.”

Among market highlights:

* Chrysler Corp. added 5/8 to 12 7/8 in heavy trading after investor Kirk Kerkorian revealed Friday that he owns 9.8% of the company.

* Tandem Computers slipped 1 3/8 to 11 3/8. Traders said First Boston downgraded the stock to “sell.”

* Amgen Corp. continued to climb, adding 2 1/2 to 61 3/4. The company received regulatory approval Friday for its white blood cell-boosting drug.

* Graphic Scanning jumped 2 1/4 to 5 3/4 after it said it is in acquisition talks with an unidentified party.

* Pan Am Corp. added 1/4 to 1 1/2. TWA offered to acquire the airline for $375 million.

* Manufacturers Hanover slid 1 1/4 to 19. Prudential-Bache Securities repeated a “sell” recommendation while Merrill Lynch cut estimates and downgraded the stock.

* Lennar Corp. gained 1 1/4 to 14 7/8. A Kidder Peabody & Co. analyst repeated a buy rating on the stock.

Tokyo stocks closed lower in anemic trading after being confined to a narrow range all day. The key 225-share Nikkei index was down 261.59 at 24,087.91.

In London, shares dipped in late trading in response to an early retreat on Wall Street. The Financial Times-Stock Exchange index of 100 leading British shares ended the day down 10.5 at 2,157.9.

In Frankfurt, German share prices fell 3.1% as jitters about fading chances for peace in the Middle East jolted a thin market. The 30-share DAX index dropped 46.51 to 1,475.87.

CREDIT Bonds Up Slightly as Eyes Are on the Gulf Bond prices rallied from early lows to finish slightly higher Monday as traders watched developments in the Persian Gulf intently.

The Treasury’s bellwether 30-year bond rose 1/32 point, or 31 cents per $1,000 in face amount, while its yield was 8.18%, unchanged from late Friday.

Prices were down by as much as 1/2 point in morning trading, mostly because of developments in the Mideast, traders said.

Despite the sluggish trading, economists continued to predict future rallies, based on their expectation that the Federal Reserve will cut the federal funds rate within a month. The rate, the interest on overnight loans between banks, traded at 7.3125% late in the day, unchanged from late Friday.

CURRENCY Dollar Edges Higher in Light Trading The dollar edged up in thin end-of-year trading, gathering light support on news that the United States and Iraq failed to agree on a date for Persian Gulf peace talks.

In New York, the dollar closed at 1.4870 German marks, compared to 1.4820 marks Friday. It was unchanged at 133.15 Japanese yen. The British pound fell to $1.9305 from $1.9370.

Reports that Iraq rejected what it called Washington’s “one-sided dictation” of dates for a meeting and insisted that it would never surrender Kuwait sparked early buying.

The dollar tends to benefit from political uncertainty.

COMMODITIES Hint of a Soviet Buy Boosts Corn Futures Prices of corn futures rose moderately Monday on the Chicago Board of Trade amid indications that the Soviet Union is seeking to buy as much as 600,000 metric tons of U.S. corn.

Other grain markets advanced in sympathy with corn, but soybean futures settled mostly lower after talk circulated that the Soviets may have bought soybean meal from South America instead.

On other commodity markets, energy futures were mixed, gold and silver were higher and livestock futures advanced, while pork bellies retreated.

Corn futures finished 2 1/4 cents to 3 1/4 cents higher, with the contract for delivery in December at $2.26 1/2 a bushel; wheat ended unchanged to 2 cents higher, with December at $2.55 a bushel.

Crude oil for January delivery rose as high as $27.85 a barrel early in the session, but profit taking eroded the gains before the close.

Light, sweet crude oil finished 0.38 to 0.54 cent higher, with January at $27.05 a barrel; unleaded gasoline was 0.08 to 0.66 cent higher, with January at 66.33 cents a gallon, and natural gas was 2 to 8.7 cents lower, with January at $2.175 per 1,000 cubic feet.

Gold and silver futures edged higher on New York’s Commodity Exchange.

Gold settled 70 cents to $1.40 higher, with December at $377.50 an ounce; silver was 1.9 cents higher across the board, with December at $3.956 an ounce.

Market Roundup, D10