NEW YORK — Blue-chip stocks bounced sharply higher today after rallies on Far Eastern stock markets, but the Wall Street recovery was uneven as investors remained skittish after the second consecutive Monday collapse.
Regaining a third of its Monday loss of 156.83 points, the Dow Jones industrial average ended 52.56 points higher at 1,846.49, the eighth-largest point gain on record. An earlier advance of almost 90 points was cut down by profit-taking.
The rally drew strength from a strong upturn in Japanese and Hong Kong markets, even before Wall Street opened, and from a modest rally in London.
The market also received a psychological lift from a plan by IBM to buy $1 billion of its own stock, after similar buyback announcements by Ford Motor Co., Merrill Lynch & Co. and others. IBM stock rose 5 3/4 to 117 3/4.
"That (IBM buyback) injected some confidence," said trader Bill Lord of Shearson Lehman.
But the market was held down by a weaker dollar, higher interest rates on credit markets and lingering concern that the 508-point debacle of a week ago last Monday has caused irreparable damage to the economy and the outlook for stocks.
'Optimism Not Abounding'
"There were plenty of people waiting to exit stocks up there," said Michael Metz of Oppenheimer & Co. "Optimism is not abounding."
Nine stocks were up in price for every eight that were down. Many traders were selling stocks that had made gains during the morning.
Volume on the New York Stock Exchange was about 260.22 million, down from 308.22 million Monday but still impressive for a session that ended two hours early, as sessions will through Friday.
Meanwhile, President Reagan called the stock market turmoil a warning of potential danger and the White House began talks with congressional leaders on ways to cut the country's $147-billion budget deficit. Reducing the deficit would ease pressures on interest rates, whose rise helped touch off the market's debacle last week.
Responding to a stronger showing in the financial markets today, bond prices opened sharply lower in domestic trading.
The U.S. government's bellwether 30-year issue was off about $17.50 per $1,000 in face value. Its yield, which moves in the opposite direction of its price, had jumped to 9.05%.
Nikkei Up Nearly 3%
On the Tokyo Stock Exchange, the Nikkei stock average, which lost 4.7% of its value Monday, closed nearly 3% higher today.
Share prices on the Hong Kong Stock Exchange tumbled this morning but then recovered as the government and banks announced new measures to help prop up the market.
The Hong Kong market's prime gauge of blue chips, the Hang Seng index, closed up nearly 7% today, after Monday's worst one-day fall ever, when it tumbled 33% as the market reopened after being closed for a week.
Minutes after trading began in London today, the Financial Times-Stock Exchange index was up 46.6 points at 1,730.7, recovering more than a third of Monday's drop of 111.1. By early afternoon, the closely watched index was down 5.6 points at 1,678.5.
The Australian market continued its downward plunge, dropping 7% by the close today.
Analysts blamed the latest ups and downs in part on a string of sharp losses overseas. During the last week, the U.S. and foreign markets have mirrored each other, with one market rising or falling because of the performance of another.