NEW YORK — The stock market retreated Wednesday as the dollar rebounded somewhat.
Blue chips, particularly market leaders General Motors and IBM, were the biggest casualties. They dragged down other stocks, analysts said.
The Dow Jones average of 30 industrials fell 5.85 points to 1,265.24.
Losers took an almost four-to-three lead over gainers among New York Stock Exchange-listed issues.
The dollar regained some of its sharp losses of Tuesday, and that diminished hopes that multinational companies' earnings would improve, analysts said.
In addition, "the stock market has had to deal with some disappointments today for two key stocks, those being GM and IBM. They are very influential on investors' sentiment," said Lew Smith, an analyst with Bear, Stearns & Co.
GM fell 2 3/4 to 73 5/8. IBM was down 1 1/8 at 129 3/8.
"When both GM and IBM are going down rather forcefully, it's difficult for the market to go against that," Smith said.
Several brokerage firms revised downward their earnings estimates for GM, analysts said.
Merrill Lynch lowered its first-quarter earnings estimate for GM from $4 a share to $3.50 a share, Harvey Heinbach, an auto analyst with the firm, confirmed.
Bob Colby, an analyst at Smith Barney, said: "The GM thing, I think, is bringing into focus a concern that's been hanging around Wall Street for some time . . . (that) the 1985 economy might be sluggish, a lot more sluggish than people might think, and the earnings will not be so hot."
Little Impact Seen
IBM's decline followed its announcement Tuesday that it would halt PCjr output in April and had no plans to resume production.
The move will have little impact on the computer giant's financial results. But ending production of one of IBM's most visible products was seen as embarrassing to the company.
The market's broader indicators didn't fare as badly as the Dow average, Colby noted.
Broadcast issues continued to attract interest.
CBS spurted 8 to 106. Anne Luzzatto, a company spokeswoman, said: "There are no corporate developments to explain the stock activity. This is market speculation and turbulence."
ABC, which announced earlier this week that it would merge with Capital Cities Communications, fell 1 to 106.
Storer Communications rose 2 3/8 to 72 1/2. RCA, owner of NBC, rose 3/4 to 42 3/4.
Some Stocks Rise
A. H. Belo was up 2 at 54. MCA rose 2 to 51.
Pepsico rose 2 to 52 3/4. Coca-Cola was up 1 at 66 3/8.
National Can was up 1/8 at 41. Triangle Industries launched a $420-million cash tender offer for the company and Miami financier Victor Posner, an earlier suitor, announced that he was offering his 38% National Can stake to Triangle.
Other auto issues besides GM were down. Ford Motor was down 1 at 42 5/8. Chrysler was down 1 1/2 at 33 1/8.
Also on the downside, Texaco shed 3/8, closing at 34 7/8, and Tandy lost 3/8 at 32 3/8.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 130.07 million shares.
Big Board volume totaled 107.53 million shares, against 119.17 million in the previous session.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,217, compared to 2,374 on Tuesday.
Bond prices rose as short-term interest rates edged lower.
The Treasury Department, meanwhile, said it sold $9.02 billion in new two-year notes at an average annual yield of 10.86%. That was up from 10.12% at the most recent auction of such notes Feb. 28 and was the highest since last Oct. 31, when newly issued two-year notes carried an average yield of 11.73%, the agency said.
Treasury Plans Sales
However, there was some relief following a Treasury Department announcement late Tuesday of plans to sell $16.25 billion in notes and bonds next week.
Analysts said that, while the government's demand for funds remains huge, traders had been bracing for an even larger auction schedule.
Next week's sales include the auction of $6.25 billion in four-year notes Tuesday, $5.75 billion of seven-year notes Wednesday and $4.25 billion in 20-year, one-month bonds Thursday.
The Treasury Department also plans to sell $14 billion in short-term bills at its regular weekly auction Monday.
In the secondary market for Treasury securities, prices of short-term governments rose 2/32 point, intermediate maturities gained 6/32 point and long-term issues were up 18/32 point, according to the investment firm of Salomon Bros. Inc.
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.
In corporate trading, industrials and utilities rose point, as did general obligations and revenue bonds in the tax-exempt municipal market, Salomon Bros. said. Trading in both markets was light.
Yields on three-month Treasury bills slipped 3 basis points to 8.52%. Six-month bills fell 5 basis points to 8.94%, and one-year bills were off 6 basis points at 9.13%. A basis point is one-hundredth of a percentage point.
Yields on 30-year Treasury bonds dropped to 11.82% from 11.88% on Tuesday.
The federal funds rate, the interest on overnight loans between banks, inched down to 8.675% from 8.688% on Tuesday.