Dow Advances 3.80 in Slowest Session of Year : Market Overview

Highlights of Monday’s market activity, compiled from Times staff and wire reports:

* Wall Street stocks ended mixed in the year’s slowest trading session Monday, with blue chips rising modestly while the broader market slipped. The Dow Jones average closed up 3.80 points at 3,235.24.

* The dollar rose against all major foreign currencies except the Japanese yen, which was supported by the upcoming release of new government spending plans.

Stocks

Analysts attributed the Dow’s slight rebound to a technical bounce after Friday’s 36-point slide. Gains by two Dow component stocks--Walt Disney Co. and Merck & Co.--also lifted the blue chip index.

* Disney closed up 2 7/8 at 150 5/8; Merck ended at 147, up 1 1/8.

Declining issues outnumbered advancers by about 9 to 7 on the New York Stock Exchange, as the broader market stayed weak.

Volume on the floor of the Big Board totaled 134.17 million shares, down from Friday’s 166.14 million.

Traders said the low volume reflected a dull day.

“Today is more a matter of a technical rebound than anything fundamentally driven,” said Joseph Barthel, director of investment strategy at Fahnestock & Co. “You had a fairly sharp sell-off Friday with no international follow-through.” Many investors also stayed out of the market in advance of consumer confidence and Chicago purchasing data for March, both due today.

Weak economic statistics last week deflated ballooning optimism for a speedy upturn. Recent news that some companies now anticipate lower earnings than previously estimated has sent investor dreams of an exceptional quarter up in smoke.

Barthel at Fahnestock believes that the market will continue to trade in a narrow range ahead of corporate earnings reports.

Analysts say at these “lofty” levels, shares have already built in optimistic expectations. If results are in line or slightly weaker than forecast, the path of least resistance is down. Among the market highlights:

* Intelligent Electronics slid 7 to 13 1/2 after the company guided first-quarter estimates downward, prompting Merrill Lynch to drop its investment rating and estimates.

* Fuqua edged up 1/4 to 14 1/8 after an order imbalance following a television report that said the company is considering the liquidation of certain businesses. Fuqua denied the report.

* AT&T; added 5/8 to 41. First Boston analyst Frank Governali upgraded his recommendation on the company to a strong buy from a buy, traders said.

* Advanced Micro Devices eased 1/8 to 17 3/8. Traders said Kidder Peabody analyst Jonathan Joseph initiated coverage of the company with a hold recommendation.

* Among the oil stocks, Arco was up 1/4 at 99 1/2, Chevron was down 1/2 at 63 5/8, Exxon was down 1/8 at 55, Mobil was down 1/4 at 59 5/8, Occidental Petroleum was down 1/4 at 18 5/8, Pennzoil was down 1/8 at 44 3/8, and Texaco was up 3/8 at 57.

Stocks closed higher in London, with the Financial Times 100-share average closing up five points to 2,452.9.

In Frankfurt, stocks overcame a shaky start as the market welcomed news of job cuts and a change of chairman at car maker Volkswagen. The 30-share DAX average closed 1.14 points down at 1,710.31.

Currency

A new report showing a decline in U.S. home sales “knocked the wind out of the dollar a bit,” said John McCarthy, chief dealer for Algemene Bank Nederland in New York.

The Departments of Commerce and Housing and Urban Development said new homes sales fell 2.7% in February, against a revised 11.1% rise in January.

He and other traders said the dollar’s decline was minimal. Many analysts took a cautious view of the dollar, awaiting more substantial reports late in the week on consumer confidence and employment.

Andrew Hodge, vice president at Bank Brussels Lambert, said many market participants have adopted “a kind of a ‘show-me’ attitude” before taking strong buy or sell positions in the dollar.

Most of the day’s action surrounded the Japanese yen, which rose on expectations that a new public works spending package would be released overnight, said Hodge.

Traders were anticipating the public spending would help support Japan’s uncertain economy. There was active trading in yen, with dealers selling marks to buy yen, a move that tends to weaken the dollar, he said.

McCarthy said the yen also strengthened because the Japanese fiscal year concludes Tuesday and some investors were adjusting their trading positions.

In New York, the dollar was quoted at 132.75 Japanese yen, down from 133.05 late Friday.

The dollar rose to 1.645 German marks, up from Friday’s 1.641.

The British pound fell in New York to $1.738, down from Friday’s close of $1.743.

Credit

Long-term bond prices fell slightly and shorter maturities finished higher on a February home sales report that led economists to draw varying conclusions.

The price of the Treasury’s bellwether 30-year bond fell 1/32 point, or 31 cents per $1,000 in face amount. Its yield remained steady at 7.94%, unchanged from late Friday.

Steven A. Wood, an economist with BankAmerica Capital Markets Group in San Francisco, said bond prices initially rose after the release of the weak new home sales report.

A sluggish economic recovery might cause the Federal Reserve to lower interest rates to push the economy along. Lower rates boost bond prices.

But the market retreated close to Friday’s levels after economists examined the housing report and revised their initial impressions, said Marilyn C. Schaja, an economist with Donaldson, Lufkin & Jenrette Securities Corp.

The federal funds rate, the interest on overnight loans between banks, was quoted at 4.125%, up from 3.25% late Friday.

Commodities

Pork futures prices plunged Monday on the Chicago Mercantile Exchange after a government report showed a much larger U.S. hog and pig herd than traders expected.

Cattle futures finished mixed after initially falling with the hog and pork belly markets. On other commodity markets, coffee futures fell; oil and precious metals advanced, and grains and soybeans were mixed.

Hogs for delivery in April settled 0.77 cent lower at 39.85 cents a pound after trading as low as 39.50 cents during the session. Hogs for July and August delivery dropped the permitted daily limit of 1.50 cents.

All pork belly contracts fell their permitted daily limit of 2 cents a pound; May deliveries settled at 34.32 cents.

Elsewhere, energy futures were mostly higher on the New York Mercantile Exchange despite ideas that Iraqi crude oil will begin flowing soon to the rest of the world. Light, sweet crude for May delivery rose 9 cents to $19.25 a barrel.

Precious metals ended modestly lower on New York’s Commodity Exchange after a day of technically oriented trading. April gold fell 60 cents to $341.90 an ounce and April silver dropped 1.7 cents to $4.125 an ounce.

Market Roundup, D8