NEW YORK — The stock market lost ground Thursday after a session of aimless drifting marked by continued profit taking in the wake of Tuesday's major gains, analysts said.
The Dow Jones average of 30 industrials generally hovered within a few points of Wednesday's close for most of the day, then dropped 7.59 to finish at 1,939.68.
Losers outpaced gainers by a margin of nearly seven to six, with 824 issues down, 703 up and 499 unchanged on the New York Stock Exchange.
Big Board volume totaled 156.91 million shares, compared to Wednesday's total of 200.14 million. Nationwide turnover in NYSE-listed issues totaled 188.74 million shares.
"When we have a strong move, as we did on Tuesday, it is not unusual to have a common-sense correction, or ordinary profit taking," said Hugh Johnson, senior vice president of First Albany Corp. in Albany, N.Y.
He was referring to Tuesday's explosive 43.03-point leap in the closely watched index to a record close of 1,955.57. On Wednesday, the index also fell back--by 8.30 points--in what analysts said was mainly profit taking.
Analysts said another factor influencing Thursday's action was the prospect of the November unemployment report to be issued today. They said some traders were apparently waiting for that report to see if it might offer new clues to the direction of the economy.
Despite the losses of the two days, however, many remained generally bullish on the market's short-term outlook. Analysts have been impressed by its continuing strength in the face of uncertainty about the direction of the economy and a recent spate of bad news, including the Iran arms imbroglio and the insider trading scandal.
Gillette led the Big Board's most active issues at 54 3/4, up 6 3/4, amid rumors that it may subject to another takeover attempt.
USX was up 3/8 at 21 7/8; Diamond Shamrock, subject of takeover interest by T. Boone Pickens Jr., rose 5/8 to 15. Coca-Cola was up 5/8 at 38 1/2. The company said it plans to buy back up to 10 million shares.
IBM was down 7/8 at 127 3/4; Compaq Computer was up 3/8 at 20 3/4 and Honeywell was down 2 at 66 3/4.
Amoco was down 1 1/2 at 67 1/2; Chevron was off 1 1/8 at 45 7/8 and Exxon was down 5/8 at 68 3/4.
General Electric declined 7/8 at 87 5/8. Anheuser-Busch was up 5/8 at 27 3/8.
Large blocks of 10,000 or more shares traded on the NYSE totaled 3,075, compared to 3,707.
In the credit markets, government bond prices moved higher Thursday, extending their recent rally on a strong dollar and favorable money supply figures from the Federal Reserve Board.
Prices of 30-year Treasury bonds were up almost 3/4 point as yields dipped to 7.27% from 7.32% Wednesday.
Bonds were supported in early trading by the Commerce Department's report that U.S. factory orders plummeted 3.6% in October, the sharpest decline in more than six years.
The federal funds rate traded at 5.875% Thursday, down from 6.75% late Wednesday.
In the secondary market for Treasury securities, prices of short-term governments were up 3/16 point, intermediate maturities rose by between 7/32 point and 17/32 point and 20-year issues were up 1/2 point, according to the investment firm of Salomon Bros.
In corporate trading, industrials were up 1/2 point and utilities also rose by 1/2.