NEW YORK — The stock market ground out its fifth straight gain Monday in a relatively light trading session that carried the Dow Jones industrial average to 2,014.09, up 20.56 points.
Investors, undeterred by the continuing decline of the dollar, traded 176.04 million shares. That compared to last Friday's trading volume of 303.36 million shares.
It was the first string of five advancing sessions since July.
"A lot of people are calling this a sucker's rally," said Edward J. Nicoski, market strategist at the Piper, Jaffray & Hopwood brokerage in Minneapolis. "But maybe it means there will be an element of stability in the market for a while, at least."
Separately, negotiators for several securities exchanges tried to avert a threatened strike by holding talks with representatives of about 1,300 clerical workers. And the New York Stock Exchange announced that one of its smaller firms, Pace Securities of New York, had ceased doing business as a member broker-dealer because it no longer met the Big Board's capital requirements.
Some investors approached the day's trading with understandable apprehension, since last Monday's session drove the Dow to a 156-point drop, and a week earlier was the historic 508-point drop. But the market righted itself after a 30-point slide in the first hour of trading, then drifted upward for the remainder of the shortened trading session.
The Dow has thus advanced 220.16 points, or more than 12%, in the past five sessions. But it remains 26% below its peak of 2,722.42 reached at the market's crest Aug. 25.
In addition to the Dow, the Standard & Poor's 500-stock index gained 3.96 on Monday to close at 255.75, and the New York Stock Exchange composite index edged up 1.94 points to 142.74. On the New York Stock Exchange, advancing stocks outnumbered declining issues by a margin of more than 3 to 2.
Analysts noted that, before Black Monday, the decline of the dollar heightened anxiety on Wall Street; a weaker dollar suggested that rising import prices would set off an acceleration of inflation. In the shadow of the Oct. 19 debacle, with anxieties still centered on recession, the dollar's slide has been interpreted as hopeful for American exporters and for the economy as a whole.
Robert S. Robbins, market analyst with the Robinson Humphrey securities firm in Atlanta, took the gains of recent trading sessions as a sign that the Dow should trade between a range of about 1850 and 2200 through year-end. "There's too much skepticism for the market to start testing those highs for a while," he added.
Jonathan Groveman, head of equity trading at Ladenburg, Thalmann & Co. in New York, saw the recent advances as "just a reflex rally from a gravely oversold condition. Prices went down so far, they're bound to bounce back a little."
Analysts said the market's advance was aided by some stock index arbitrage trading, despite the New York Stock Exchange's limits on such trading. Some firms got around those limits by executing such trades manually, they said.
More sanguine analysts were again encouraged to note gains in a number of so-called cyclical stocks--those that would be expected to do well in a stronger economy. Among these, said Piper Jaffray's Nicoski, were Du Pont, up 3 to 93, and Minnesota Mining & Manufacturing, up 1 to 60.
Declining share prices have helped pique interest in takeover stocks, and a number of them were among the day's gainers.
Santa Fe Southern Pacific moved up 4 3/4 to 55 after the announcement that Henley Group is in discussions to acquire the company for $63 a share.
Singer jumped 3 1/8 to 47 as a partnership led by investor Paul Bilzerian offered $50 a share for the company. Singer said its board will decide on the offer by Nov. 16.
Bell & Howell advanced 3 1/2 to 55; an investor group that includes Robert M. Bass disclosed that it has increased its stake to 15.9%.
Among other widely followed stocks, International Business Machines was up 2 to 124 1/2, and General Motors fell to 58 5/8.
Federal mediators have been trying to avert a strike threatened by clerks, pages and transaction reporters employed by the New York Stock Exchange, the New York Futures Exchange and the Securities Industry Automation Corp., which is a securities transaction support firm.
A three-year contract for the members of the Office and Professional Employees Union expired Saturday. The New York Stock Exchange has contended that it will use non-union personnel to maintain operations if talks fail and a strike is called.
Pace Securities, with about 1,200 customers, is among the smallest firms on the New York Stock Exchange, the exchange said. Five other small firms have already ceased activities as Big Board broker-dealers since the Oct. 19 crash, according to a spokesman.
Late Monday, a statement issued under the name of Pace's president, H. Clinton Pollack, said that the firm had taken steps to meet Big Board net capital requirements.
Despite the statement, the exchange spokesman said "so far, nothing has changed."
In bond markets, prices tumbled. The Treasury's 30-year bond was off 7/8 point, or $8.75 for every $1,000 in face value, while its yield rose to 9.12% from 9.03% late Friday.
The federal funds rate, the interest banks charge each other on overnight loans, was quoted at 6.525%, down from 6.87.5 late Friday.
Overseas, the Hong Kong stock market rebounded in early trading today, with the Hang Seng stock index opening at 2,234, compared to Monday's closing of 2,203.23.
The Tokyo markets were closed today for Culture Day, a national holiday.
Prices fell Monday in London. Share prices opened lower and remained depressed throughout the session. The Financial Times 100-share index fell 26.1 points, or 1.5%, to close at 1,723.7.