Dow Hits New High for Third Straight Session

NEW YORK —  The stock market pushed ahead Monday, overcoming some early selling to post record highs for the third consecutive session as the Dow Jones average of 30 industrials closed with a 1.68 advance.

The Dow, down about 7 points at its midday low, closed to a new high of 1,337.14.

Stocks of several companies involved in takeover or buy-back developments recorded some of the day’s best gains.

Volume on the New York Stock Exchange slowed to 96.08 million shares from 105.24 million on Friday.

Trading is expected to be relatively quiet this week, with the Independence Day holiday breaking up the usual operating schedule on Wall Street.

Economy May Be Picking Up

William LeFevre, an analyst at Purcell, Graham & Co., said this week may be “a non-event where the markets are concerned. With Independence Day this Thursday, many traders have already begun what may turn out to be a 10-day Fourth of July ‘weekend.’ ”

Signs have accumulated lately that the economy picked up momentum toward the end of the second quarter after a sluggish start earlier in the year.

While this has prompted greater expectations for corporate profits in the months ahead, evidence of renewed business expansion also has raised questions about whether interest rates can continue to decline.

Prices of long-term government bonds, which move in the opposite direction from interest rates, were mixed in Monday’s activity. Rates on short-term Treasury bills edged upward from their levels late last week.

Times Mirror jumped 4 to 57 3/4. The company said it began a tender offer for 7.5 million of its shares at $60 apiece.

Mary Kay Cosmetics climbed 1 to 13 3/8. The company agreed to a sweetened buy-out offer from a group including its top management to take it private.

Scoa Industries, which said it received a leveraged buy-out proposal, gained 1 1/2 to 32 3/4.

Upjohn rose 1 to 109 1/2, International Business Machines 1 1/8 to 124 7/8 and Associated Dry Goods 1/8 to 67 3/8. Those issues were among stocks named in Shearson Lehman Bros.’ annual list of “uncommon values in common stocks” announced Monday morning.

Borden, which said it expects to report a drop of about 3% in its earnings for the second quarter, fell 1 1/2 to 40 1/2.

Bond prices were mixed as short-term interest rates edged higher.

For example, the federal funds rate, the interest on overnight loans between banks, climbed to 7.8125% from 7.5% late Friday.

Short-Term Governments Off

Yields on three-month Treasury bills were up 3 basis points to 6.85%. Six-month bills rose 3 basis points to 7.01%, and one-year bills edged up 2 basis points to 7.19%. A basis point is one-hundredth of a percentage point. In the secondary market for Treasury bonds, prices of short-term governments slipped 3/32 point, intermediate maturities rose 2/32 point and long-term issues were up 5/32 point.

The movement of a full point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, rose 0.05 to 106.83 from Friday’s level.

Yields on 30-year Treasury bonds fell to 10.42% from 10.45% on Friday, Salomon Bros. said.

In corporate trading, prices of industrials and utilities rose point in light trading.

Among tax-exempt municipal bonds, general obligations fell 1/8 point and revenue bonds were little changed.