Blue-chip stocks fell Monday as investors took profits after Friday's run into record territory. Bond yields fell for the fourth consecutive day on optimism about economic reports due out this week.
But the dollar edged lower in light trading, boosting prices of precious metals as investors wondered whether the currency was poised for a fresh plunge.
The Dow industrials finished at 4,025.23, off 10.38 points. But gainers and losers ended in a virtual dead heat on the Big Board, with the closing count showing 1,133 stocks up, 1,126 down and 719 unchanged.
Broader measures fared better than the blue-chip indicator. The New York Stock Exchange composite gained 0.34 point to 265.17, and Standard & Poor's 500-stock index was up 0.48 point at 490.05. The Nasdaq Stock Market composite edged up 0.09 point to 802.31. The American Stock Exchange market value index rose 0.28 point to 453.06.
Big Board volume eased, with 275 million shares changing hands, down from Friday's unusually heavy 382.94 million.
Judging by the sluggish movement in the most popular indicators and the slowdown in trading volume on the NYSE, investors apparently decided to take a break after Friday's powerful buying wave that carried the Dow to a record close.
The Treasury market advanced as traders and speculators optimistic about the future of interest rates snapped up shorter-term securities.
Volume was described as light, with many bond investors sitting tight ahead of economic data due out this week, including February figures on retail sales and inflation. But the bullish tone that has lifted prices to six-month highs generally persisted, despite further weakness in the dollar.
Long-term bond yields slipped to 7.45% from 7.46% on Friday, pushing prices up a scant 1/16 point, or 63 cents per $1,000 in face value. Prices rise when yields fall.
But prices of other Treasury securities posted sharper gains, with short-term maturities rising 1/8 point and intermediate maturities ranging from 5/32 point to 9/32 point higher, the Telerate Inc. financial information service reported.
John Shaughnessy, director of research at Advest Inc., said the strength in the market Friday reflected hopes that the dollar was poised for a rebound, but investors re-examined that idea Monday as the greenback bobbed around.
"The dollar weakness will continue to be the principal factor holding back the market," he said.
One focus of investor attention was news that several Federal Reserve Board governors seem reluctant to raise interest rates despite the dollar's prolonged sinking spell.
The New York Times reported in Monday's editions that four of the Fed's seven governors said in interviews Friday that the U.S. economy was slowing to a steady, sustainable pace with moderate inflation.
The dollar closed in New York at 90.73 Japanese yen, down from 91.09 on Friday, and 1.407 German marks, down from 1.416.
Apart from uncertainty about the dollar, another buying deterrent was anticipation of the sensitive data due later in the week. Today's scheduled reports include retail sales and an Atlanta region Fed survey, followed a day later by reports on producer prices, industrial production and capacity utilization.
Among Wednesday's highlights:
* Bankers Trust New York lost 9 7/8 to 51 1/2 in heavy trading after saying late Friday that it expects to report an after-tax loss of up to $125 million in the first quarter.
* The news from Bankers Trust weighed on other bank stocks. J.P. Morgan was down 2 1/4 at 61; BankAmerica dropped 1/8 to 47 1/4; Chemical Bank was down 1/8 at 38 7/8; Citicorp lost 3/8 to 41 1/2, and Chase Manhattan dropped 3/4 to 35.
* Disney fell 1 5/8 to 54 1/2 as concerns about management unrest swirled around the company following the resignation of its top television executive.
* Among chip makers, Intel gained 7/8 to 81 3/8, Micron Technology rose 1 7/8 to 69 and Texas Instruments was up 2 1/2 at 89 3/8. IBM added 1 to 82 1/8.
* Apple Computer was up 1 3/8 at 38 1/8. The company slashed prices by up to 20% on its Macintosh Performa 630 and Quadra 630 computers and improved the speed of others.
* Another big loser was Future Healthcare, which sank 10 13/16 to 4 9/16 after the company disclosed that it found 1994 accounting discrepancies that may have a material impact on results.
Mixed action overseas didn't offer much to inspire Wall Street. In Tokyo, the 225-share Nikkei average ended up 119.26 points at 16,477.64. London's FTSE-100 average fell 9.3 points to 3,011.8, and Frankfurt's 30-share DAX average index closed up 5.47 points at 1,999.49.
Mexico's Bolsa index dropped 3.98 points to close at 1,586.02.
Market Roundup, D6
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30-year T-Bond: 7.45%
1-year T-Bill: 6.42%