STOCKS : Dow Down 6.49 as Profit Takers Cut Rally Short

Stocks finished lower Monday, hit by profit taking and a renewed rise in bond market interest rates.

The Dow Jones industrial average slipped 6.49 to 2,993.96.

In the broader market, declining issues totaled 853, rising issues 657 and 560 were unchanged in nationwide trading of New York Stock Exchange-listed stocks.

Big Board volume fell to 133.91 million shares as of 4 p.m., against 167.53 million at the same point Friday. In after-hours trading, which the exchange began last week, only an additional 300,000 shares changed hands.

Analysts said the market slipped on profit taking after the Dow’s 35-point advance Friday and its gain of nearly 24 points last week.

Stocks rallied Friday in response to a fall in interest rates and government data showing that the economy was rebounding and that inflation remains under control.

Michael Metz, market strategist at Oppenheimer & Co., described Monday’s activity as a “consolidation day for both stocks and bonds. There was no new stimulus for either direction.

“It may be a prologue to another rally attempt. The free fall in bonds is over.”

Activity in the stock market was slow in the absence of a fresh batch of economic data. “Summer doldrums are here,” said Gene Jay Seagle, analyst at Gruntal & Co. “Over the next few weeks the market will gather itself together, and after July 4 we may see some celebration.”

He said lower yields on money funds and added interest by foreign investors in U.S. stocks are the “makings of a good summer rally.”

Among the market highlights:

* Many industrial stocks continued to rise on the belief that the recession is over. Alcoa jumped 1 3/8 to 68 7/8, Phelps Dodge gained 1 1/8 to 66 1/4, Goodyear leaped 1 3/8 to 34 7/8, and International Paper rose 1 5/8 to 72 7/8. Among steelmakers, Bethlehem rose 5/8 to a new 1991 high of 17 1/2 and Quanex rose 1/2 to 16 3/4.

* Tech issues were a mixed bag. Intel rose 1 1/4 to 49 1/2 after NCR Corp. introduced a notebook computer based on Intel’s 386SX chip. Also, personal computer maker Advanced Logic Research jumped 1 to 12 1/4 after a recent selloff. But Sun Microsystems fell 2 5/8 to 30 1/4 after a Goldman Sachs analyst cautioned that demand for Sun’s workstations may be softening.

* Among food firms, Heinz added 1/8 to 38 1/4 after reporting a 14% rise in quarterly earnings. But Anaheim-based Bridgford Foods lost 1 1/2 to 17 1/2 despite reporting quarterly per-share earnings up 20%. Elsewhere, Quaker Oats gained 3/8 to 62. It announced plans to spin off its Fisher-Price toy unit to shareholders, who will get one Fisher-Price share for every five Quaker shares now owned.

* Oil stocks weakened again as an oil price rally failed to get prices over $20 a barrel. Exxon fell 3/4 to 57 1/2, Unocal dropped 3/4 to 24, and Chevron lost 3/4 to 69 3/4. Among smaller firms, Ventura-based Benton Oil lost 1 to 7 3/8.

* Bank of Boston slipped 1/8 to 7 3/8. Investor Laurence Tisch said he cut his stake in the firm to 6.8%.

* Investors continued to pick and choose among small NASDAQ stocks, many of which are still depressed compared to their 1990 peaks. Among Southland issues, satellite relay firm IDB Communications jumped 1/2 to 9 1/4; lamp maker Dynasty Classics rose 1/2 to 6 1/4, and electronic systems firm Aura Systems gained 1/2 to 7 5/8.

* Woodland Hills-based insurer Twentieth Century lost 1 1/4 to 39 1/4 despite announcing a 2-for-1 stock split and its intention to list its stock on the New York Stock Exchange. The shares now trade on the NASDAQ market.

* Orion Pictures slumped 5/8 to 3 5/8. It announced talks with bondholders to complete an acceptable debt-restructuring plan.

In overseas trading, London’s Financial Times 100-share average rose 1.7 to 2,524.00, while Frankfurt’s DAX average inched up 1.24 to 1,701.07.

In Tokyo, the Nikkei average lost 150.80 to 24,943.09.

In Mexico City, the Bolsa index slipped 3.29 to 1,095.37.

Credit

Bond prices fell as traders sold to lock in profits from higher prices last week.

The Treasury’s bellwether 30-year bond fell 1/4 point, or $2.50 per $1,000 in face amount. Its yield rose to 8.49% from 8.47% late Friday.

Trading activity was dull in advance of upcoming economic reports. Kevin Flanagan, money market economist for Dean Witter Reynolds, said many traders were awaiting today’s release of May housing starts.

In addition, Federal Reserve Chairman Alan Greenspan was to speak before a House committee today, which could also lend direction to the markets.

The federal funds rate, the interest on overnight loans between banks, was quoted at 6.5%, up from 5.675% late Friday. The rise, however, did not appear to reflect any underlying change in Fed monetary policy.

Currency

The dollar ended mixed in slow trading as dealers awaited fresh news on the U.S. economy.

The dollar fell to 1.797 German marks in New York, off from 1.799 Friday, but it rose against the British pound and Swiss franc. Against the Japanese yen the dollar finished at 140.70, unchanged from Friday.

Commodities

Too much supply and sluggish demand combined to stall investor interest in meat and livestock futures, sending prices lower on Chicago’s Mercantile Exchange.

Live cattle prices settled 0.37 cent lower to unchanged with the contract for delivery in June at 74.75 cents a pound; frozen pork bellies settled 2 to 1.60 cents lower with July at 53.67 cents a pound.

Elsewhere, gold and silver staged slight recoveries from Friday’s sharp losses on New York’s Comex. Platinum, still stung by Japanese selling and substitute metals that are threatening to limit its use in automotive fields, remained weak.

Gold settled $1 to $1.10 higher, with June at $368.20 an ounce. Silver settled 1.8 cents higher across the board with June at $4.44 an ounce.

On the New York Mercantile Exchange, energy futures continued to be pressured by reports of ample crude supplies and sluggish gasoline demand. Longer-term crude futures for light, sweet oil settled 4 cents lower, though the near-term (July) contract gained 27 cents to $19.94 a barrel, largely on technical trading.

Market Roundup, D8