FINANCIAL MARKETS : Dow Climbs 6.8 as Investors Ponder Rates

Stocks crawled to a mostly higher close Monday as investors studied corporate earnings and pondered the Federal Reserve Board’s next move on interest rates.

Most popular market measures managed to eke out minor gains, with the Dow Jones industrial average rising 6.80 points to 3,741.84.

In the broader market, rising issues nosed out declines by about 30 issues on the New York Stock Exchange, where volume slowed to 213.47 million shares from 261.60 million Friday.

In the absence of a unifying theme to give the market direction, concerns about rising interest rates continued to preoccupy investors. Fed Chairman Alan Greenspan’s remarks last week that the central bank might tighten credit policy another notch in the near future put the financial markets on guard for another possible rate hike.

Aside from some nibbling in blue chips, traders complained of a general lack of investor interest.

Technical analyst Alfred E. Goldman of A.G. Edwards & Sons Inc. described the session as a time out after a fairly steady market advance since the Fourth of July holiday.

“We’ve had a pretty good party since the Fourth of July, and now we’re having a normal period of profit taking and consolidation,” he said.

Stocks couldn’t count on the bond market to establish a trend for trading. Treasury bond yields drifted lower in very thin trading as traders and investors braced for a fresh batch of intermediate government notes scheduled to be auctioned today and Wednesday. Bond traders were worried that demand might be weak for the $17.25 billion in two-year notes and $11 billion in five-year notes.

The key 30-year bond yield fell to 7.52% from the previous session’s 7.56%, pushing up the price, which moves in the opposite direction, 3/8 point, or $3.75 per $1,000 in face value.

Analysts traced some of the bond price’s increase to expectations that the Fed will move soon to raise short-term interest rates.

With the earnings season in full swing, investors reacted to the latest batch of quarterly financial reports. Oil companies posted mostly gloomy results as lower crude and natural gas prices impaired profits.

Among the market highlights:

* IBM, which surprised Wall Street last week with stronger-than-expected earnings, ended up 3/4 at 62 1/8.

* McDonnell Douglas fell 3 3/4 to 111 1/4 after the company said it is testing the market for a possible new 100-seat commercial jet. Salomon Bros. downgraded the stock to “hold” from “buy,” saying development of the jet will cost $500 million and that the plane would compete in an already-crowded market.

* Exxon ended up 1/2 to 58 3/8 despite reporting lower earnings, which it attributed to lower crude oil prices.

* Among other oil companies reporting lower earnings, Texaco finished unchanged at 63 and Atlantic Richfield slipped 7/8 to 107.

* On the plus side, meanwhile, American Brands rose 1 1/2 to 34 1/8 on the New York Stock Exchange after the company’s quarterly figures impressed Wall Street. American Brands said its second-quarter profit rose 8%.

* US West rose 5/8 to 40 7/8 and AirTouch Communications rose 1/8 to 26 after they announced an agreement to combine their domestic cellular operations, creating one of the nation’s biggest wireless telephone networks.

Mixed performances by foreign markets provided Wall Street no consistent course to follow. Tokyo stocks ended lower, with the 225-share Nikkei average ended down 165.23 points at 20,297.66. In Europe, Frankfurt’s 30-share DAX average closed at 2,136.22 million, and London’s Financial Times 100-share average fell 8.6 points to 3,106.1.