NEW YORK — The stock market settled for a small gain Wednesday after the Dow Jones industrial average was thwarted again at the 1,700 level.
Analysts said most of the action during the session was concentrated in a few issues involved in takeover speculation, corporate restructurings or other "special situations," in the parlance of Wall Street.
Dow Jones's average of 30 blue chips, up more than 10 points at its midday peak, closed with a 4.24 gain at 1,696.90.
Volume on the New York Stock Exchange reached 158.02 million shares, up from 147.96 million on Tuesday.
In the week's first two sessions, the market bogged down as it encountered some resistance from sellers near the Dow 1,700 mark. But analysts noted that stock prices held relatively steady during that period.
They said it was impressive that the market was so resilient even as many people were describing stocks as "overextended."
Positive News Background
Meanwhile, brokers said, the news background remained very positive, with interest rates and oil prices having fallen sharply and inflation remaining at low levels.
On Tuesday, the government said the consumer price index rose 0.3% in January. Paul A. Volcker, chairman of the Federal Reserve Board, said Wednesday that declining oil prices "appear to assure favorable price performance in the months immediately ahead."
His comments helped send interest rates lower in the credit markets. Prices of long-term government bond prices roared ahead Wednesday, buoyed by strong demand and optimism about inflation.
The Treasury's benchmark 30-year bond rose about 1 1/2 point, or $15 for each $1,000 in face amount, to yield 8.48%, the lowest rate since the late 1970s.
Union Carbide jumped 4 1/2 to 97 7/8. The stock has been strong lately on indications that the company's planned sale of its consumer products business has drawn enthusiastic bidders.
Eastman Kodak rose 4 to 58 3/4 on takeover speculation. Also, Ciba-Geigy AG said it will buy Kodak's textile dyes operations.
Eastern Airlines gained to 8 5/8 and Texas Air, traded on the American Stock Exchange, climbed 3 1/2 to 25 7/8. Texas Air is moving to acquire Eastern.
Philippine Long Distance Telephone was the most active Amex issue, up 1 1/8 at 5. The stock has attracted buyers this week with the departure of Ferdinand Marcos from the Philippines and the assumption of power by President Corazon Aquino.
In the bond market, municipal and corporate issues also scored good gains.