STOCKS : Market Stages Late Rebound; Dow Up 21.78

Stock prices gained ground in late trading Monday, reversing last week’s declines.

But trading set its slowest pace in 11 weeks as traders awaited new signs of the future course of interest rates.

The Dow Jones average of 30 industrials, down 17.08 points last week, rose 21.78 to 2,918.56.

Advancing issues outnumbered declines by 3 to 2 in nationwide trading of New York Stock Exchange-listed stocks, with 940 up, 614 down and 504 unchanged.

Volume on the Big Board came to 138.59 million shares, down from 187.41 million on Friday and the lightest total since a 136.29-million-share day Jan. 21.

Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 170.75 million shares.

On Friday, the Labor Department issued monthly statistics showing greater-than-expected weakness in employment.

But the Federal Reserve made no move to relax its credit policy to encourage a recovery from the recession.

Analysts said the Fed might make its intentions clearer in the next week or two after it gets a look at inflation figures for March.

Figures on the producer price index of finished goods are due out Thursday and the consumer price index Friday.

Among the trading highlights:

* Gainers included Philip Morris, up 3/4 at 68 1/2; USX, up 7/8 at 32 5/8; Sears, Roebuck, up 1 at 34 5/8; Du Pont, up 1 1/2 at 38 1/2, and International Business Machines, up 3/8 at 113.

* Halliburton climbed 3/4 to 45 1/2. The company said it expects to post higher earnings for 1991 despite a sluggish first quarter.

* Other energy issues were mostly higher as well. Exxon added 1/4 to 57 5/8, Chevron gained 7/8 to 76, Amoco rose 1 1/4 to 52 1/4, Atlantic Richfield climbed 1 1/4 to 126 1/4 and Texaco added 3/4 to 64 3/8.

In London, the Financial Times-Stock Exchange index of 100 leading shares closed down 15.4 points at 2,529.9.

In Frankfurt, Germany, the 30-share DAX index ended 6.92 points lower at 1,579.95.

In Tokyo, the Nikkei average fell 159.68 points to 26,607.65.

Credit

Government bond prices rose slightly in light trading.

The Treasury’s bellwether 30-year bond edged up 1/8 point, or $1.25 per $1,000 in face amount. Its yield fell to 8.15% from 8.17% on Friday.

Economists expect the market to languish until the release late this week of the March producer and consumer price reports, an important update on inflationary trends in the economy.

A moderate inflation forecast could clear the way for the Federal Reserve to cut interest rates to stimulate the economy, analysts said. Lower rates benefit fixed-income investments such as bonds.

“Bond investors generally are anxious about whether the pace of inflation is really abating,” said Carol A. Stone, senior economist at Nomura Securities International Inc. “If there’s evidence that it has, they would be able to feel better.”

The federal funds rate, the interest on overnight loans between banks, was quoted at 5.5%, unchanged from late Friday.

Currency

The dollar rose against most foreign currencies in light trading marked by the absence of fresh economic reports.

“The markets will remain in a bit of a halted trading pattern as we look for new developments to trade on,” said Jeff Mondschein, manager of foreign exchange trading at the Chicago-based Continental Illinois National Bank & Trust Co.

There were no significant economic reports or political developments to push the dollar in either direction, analysts said.

In Tokyo, the dollar hit 137.00 yen, up from Friday’s 136.30. In London, it rose to 137.20 yen, and in New York, it settled at 136.935 yen, up from 136.75 yen Friday.

In London, the British pound fell to $1.7685 from $1.7795 on Friday. In New York, it cost $1.7650 to buy one pound, less expensive than Friday’s $1.7675.

Commodities

Cotton for May delivery soared the permitted daily limit of 2 cents a pound on the New York Cotton Exchange, propelled partly by a weekend deluge in the Rio Grande Valley that flooded fields of seedlings.

On other commodity markets, oil futures rose, precious metals were higher, grains and soybeans were mixed and livestock and meat futures were mixed.

Cotton futures settled 0.30 to 2 cents higher, with May at 87.34 cents a pound in high-volume trading.

Energy futures prices rallied on the New York Mercantile Exchange. Traders grew concerned that gasoline supplies will be tight as the peak summer driving season sets in.

Light sweet crude oil was 13 to 35 cents higher, with May at $20.31 a barrel; heating oil was 0.08 to 0.62 cent higher, with May at 54.54 cents a gallon; unleaded gasoline was 0.40 to 1.15 cents higher, with May at 68.97 cents a gallon, and natural gas was 0.5 cent lower to 1 cent higher, with May at $1.395 per 1,000 cubic feet.

Precious-metal futures rose modestly on New York’s Commodity Exchange in quiet trading.

Gold settled $1.90 to $2 higher, with April at $361.80 an ounce. Silver was 2.5 to 2.7 cents higher, with May at $3.975 an ounce.