NEW YORK — Stock prices abandoned their brief rally and tumbled over a wide front in sluggish trading Tuesday.
Blue-chip and technology issues, which paced the market's strong advance in the previous session, were among those hardest hit.
Still, the Dow Jones average of 30 industrials managed a 4.81-point gain to 1,321.12, thanks to a spectacular rise by one of its components, General Foods.
General Foods shot up 16 5/8 to 101 1/2 after the company said it received an unsolicited takeover bid, although it declined to disclose the value of the offer or identify the suitor.
Losers overall outpaced gainers by two to one on the New York Stock Exchange, whose composite index dropped 0.91 to 106.50.
Big Board volume slowed to 97.87 million shares from 104.79 million on Monday.
Stocks surged Monday after the United States and four other nations announced a joint attempt to reduce the value of the dollar against other major currencies, which in turn sent the dollar tumbling on world markets.
The prospect of a lower dollar initially was greeted with enthusiasm, since it raised hopes for a stronger U.S. economy and stable interest rates.
But the five-nation program and the stock market's upturn drew increased skepticism when traders returned Tuesday.
They said that investors are concluding that the results of a downward trend in the dollar, assuming one occurs, are unlikely to be substantially reflected in corporate earnings for several quarters.
Some brokers also suggested that, following Monday's rally, many investors were anxious to take profits or limit losses stemming from the market's decline over the two previous weeks.
Manufacturers Hanover was unchanged at 34 7/8 and topped the NYSE's active list after a 1.7-million-share block crossed at 34.
Other financial issues fared much worse. Citicorp tumbled 1 3/4 to 40 5/8, J. P. Morgan dropped 1 5/8 to 44 3/8 and Phibro-Salomon was off 1 at 36 3/4.
Among the blue chips, International Business Machines skidded 1 3/8 to 126 3/4, Exxon fell 5/8 to 49 3/4, Westinghouse fell 7/8 to 38 and General Electric lost 7/8 to 57 3/4.
Litton Industries plummeted 5 7/8 to 72 after saying that it likely would post flat to slightly higher earnings per share in fiscal 1986 because of weak oil prices.
Big Block Trade
On the upside, Gulf & Western climbed 1 7/8 to 43 7/8 after a 1.18-million-share block traded at 41 3/4.
Large blocks of 10,000 or more shares traded on the NYSE totaled 1,752, compared to 2,036 on Monday.
In the credit markets, short-term interest rates extended their slide as traders appeared to conclude that the five-nation agreement on the dollar means that the Federal Reserve Board won't tighten its monetary policy anytime soon.
The decline in yields at the short end of the market reflected a feeling that the agreement meant that the Federal Reserve Board would take no steps in the near term to tighten credit conditions and boost interest rates, bond-market analysts said.
In secondary trading, yields on three-month Treasury bills fell 7 basis points to 6.86%. Six-month bills were off 14 basis points at 7.04%, while one-year bills were off 5 basis points at 7.36%. A basis point is one-hundredth of a percentage point.
In the secondary market for Treasury bonds, prices of short-term governments rose 1/8 point, intermediate maturities rose by between 6/32 point and 13/32 point and long-term issues rose 3/8 point, according to the investment firm of Salomon Bros.
Yields on 30-year Treasury bonds slipped to 10.59% from 10.62% late Monday.
Salomon Bros. was unable to provide late-afternoon quotations on industrials and utilities and on tax-exempt municipal bonds.
The federal funds rate--the interest on overnight loans between banks--traded at 7.75%, down from 7.875% late Monday.