Dow Up 21.05 but Stocks Still in Doldrums : Investor Caution Keeps Trading Volume Low

NEW YORK — Stock prices rebounded Tuesday, but the volume of trading remained light as wary investors refused to commit their money.

The Dow Jones index of 30 industrials rose 21.05 to 1,962.53, or slightly more than 1%. Other market measures showed smaller gains.

Traders linked higher stock prices to an early advance in Treasury bonds. Although bond prices temporarily lost their gains late in the session--undermined by a rise in the Commodity Research Bureau’s inflation index--stocks held firm through the closing bell.

Worries that inflation will reignite and prompt the Federal Reserve to tighten credit and raise interest rates have kept the stock market on the defense in recent sessions.

Traders and analysts said inflation and interest rates are still nagging concerns, putting off both retail and institutional investors and depressing volume in the stock market.

Others Affected

“We’re all concerned about the volume,” said Richard Torrenzano, senior vice president and spokesman of the New York Stock Exchange at a news conference for foreign journalists. “But I don’t think there’s one button you can push (to solve it).”

Torrenzano added that the low volume was affecting not only the Big Board, but other exchanges in the United States and overseas.

Advancing issues outnumbered declines by about 5 to 3 in nationwide trading of New York Stock Exchange-listed stocks, with 905 issues up, 549 down and 498 unchanged.

The volume of trading on the floor of the NYSE came to 139.93 million shares. That was up from 102.64 million shares in the previous session, the lightest since the day after Thanksgiving last year.

However, two utilities with attractive dividends accounted for more than 28 million of the shares traded--23.8 million for Northeast Utilities and 4.6 million for Kansas Power & Light. Investors, mainly Japanese, buy the stocks to capture their quarterly dividends, then quickly sell them back.

Gain Was Expected

The stock market’s rebound seemed unconnected to any major news.

The Commerce Department said durable goods orders rose 0.8% in April, which was roughly in line with expectations.

Bank of Japan Governor Satoshi Sumita and Federal Reserve Governor Wayne Angell were quoted separately as saying the dollar was at stable levels against major foreign currencies.

“If there’s anything noticeable it’s how quiet it is, how motionless the markets are,” said Hugh Johnson, chief investment officer for First Albany Corp. in Albany, N.Y.

Other than utilities, Boeing was the most actively traded stock on the Big Board, rising 2 1/8 to 53 7/8. There has been speculation that the company is close to getting an order for about 60 planes of the 757 class from United Airlines.

Murray Ohio Manufacturing Co. leaped 8 to 59. A federal judge ruled Monday that Sweden’s AB Electrolux could proceed with its bid for Murray, and Electrolux raised its bid for the company to $52 a share, or $197 million.

On the American Stock Exchange, BDM International rose 3 3/4 to 34 3/8. Ford Aerospace Corp. said it was buying the defense contractor for $34.75 a share, or about $425 million.

Among NYSE blue chips, Citicorp rose 3/4 to 22 1/2, Texaco fell to 45 7/8, American Telephone & Telegraph was up 1/8 to 26 1/2, General Electric climbed 1/2 to 40 1/8 and International Business Machines rose 1/2 to 109.

Indicators Advance

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,488, compared to 1,992.

Nationwide, consolidated volume in NYSE-listed issues, including trading at regional exchanges and on the over-the-counter market, totaled 163.13 million shares.

The Wilshire index of 5,000 equities closed at 2,528.146, up 21.210.

The NYSE composite index rose 1.32 to 143.53.

Standard & Poor’s index of 400 industrials rose 2.75 points to 293.49, and S&P;’s 500-stock composite index rose 2.68 to 253.51.

At the American Stock Exchange, the market-value index fell 0.16 to 290.52. The NASDAQ composite index for the over-the-counter market closed with a gain of 1.90 to 365.16.

On the Tokyo Stock Exchange, the Nikkei stock index 225 selected issues moved up 62.90 to 27,312.66. The stock market’s gain followed a 144.09-point tumble in trading Monday.

In London, stock prices staged a broad-based rally amid renewed takeover speculation.

The Financial Times-Stock Exchange 100-stock index closed up 21.6 at 1,782.9. Trading volume was a moderate 459.6 million shares, compared with Monday’s 360.6 million shares.