NEW YORK — The stock market put together a mild rally Wednesday, responding to a steadier dollar and hopes for an impending agreement on a federal budget plan.
Trading was relatively quiet, however, with many investors taking a Veterans Day holiday.
The Dow Jones average of 30 industrials, which had fallen 107.26 during the three previous sessions, rose 21.05 to 1,899.20.
Advancing issues outnumbered declines by about 5 to 3 on the New York Stock Exchange, with 985 up, 581 down and 402 unchanged.
Big Board volume came to 147.85 million shares, down from 184.31 million Tuesday and the smallest total since before last month's crash.
The dollar steadied in foreign exchange after President Reagan's assertion Tuesday that he doesn't want to see it fall any further.
Brokers said investors were also heartened by reports that talks between the Administration and Congress were progressing toward agreement on a plan to narrow the federal budget deficit.
Trade Report Awaited
The government securities market was closed Wednesday for the holiday. Analysts said some investors were avoiding large commitments in stocks until today, when the government makes its monthly report on the nation's international trade situation.
Disappointing reports on the trade deficit in recent months have been widely cited as a primary force behind the stock market's long slide since late summer.
The consensus on Wall Street is that the latest figures will show a deficit of about $15 billion for September, compared to $15.7 billion in August. Thom R. Brown, chairman of the investment policy committee at Butcher & Singer in Philadelphia, said a trade deficit greater than $15 billion could mean trouble for the market, while stocks could get a boost if the figure is below $14 billion.
Tokyo stocks perked up during early trading today, buoyed by news that the United States was closer to solving its huge deficit problem.
Tokyo's 225-share Nikkei market index finished the morning up 229.52 points at 21,266.28 after four straight declines. The Tokyo stock market fell sharply Wednesday, with the Nikkei index losing 649.70, or 2.99%, to close at 21,036.76, its fourth successive fall.
In Hong Kong, the Hang Seng Stock Index registered 2118.76 this morning, its highest level all week. The market closed Wednesday at 2046.18, up nearly 3 points from the day's opening. In Sydney, the All Ordinaries Index was up 39.2 points in the first half hour of trading to 1190.2.
Most European exchanges were higher Wednesday and the British market showed surprising strength. In London, the Financial Times 100-share index gained 65.8, or 4.2%, to close at 1,639.3. In Frankfurt, shares rallied from Tuesday's near-record fall, boosted by the firming dollar, with a key index up 4.5%.
The New York Stock Exchange and other U.S. markets said they would return to normal 9:30 a.m. to 4 p.m. EST trading hours today, after early closings since Oct. 23 to allow extra time for catching up on order processing and paper work.
Gainers among the blue chips included American Express, up 1 at 23 3/4; General Electric, up 1/2 at 43 7/8; International Business Machines, up 1 1/2 at 119; Philip Morris, up at 86 1/2, and American Telephone & Telegraph, up 3/8 at 28 7/8.
Warner-Lambert chalked up one of the day's standout advances, rising 5 to 69. Analysts said a study involving a Warner-Lambert anti-cholesterol drug apparently is showing very encouraging results.
Southland Bounces Back
Airline issues were generally weak. AMR dropped 1 1/2 to 32 1/2; Allegis slipped 3/8 to 71 1/2; Delta Air Lines lost 3/8 to 37 1/8; NWA fell 5/8 to 37 3/8, and Trans World Airlines dipped 3/4 to 17 1/2.
Southland Corp.'s stock recovered slightly from Tuesday's 16 3/4-point plunge amid rumors that another investment bank might step in to help complete the financing for Southland's buyout. The stock rose 2 1/2 to 54.
But aftershocks from Southland's announcement Tuesday that it was postponing a $1.5-billion offering of "junk bonds" to finance the buyout continued to rattle stocks in other potential takeover targets, brokers said.
Santa Fe Southern Pacific fell 2 3/8 to 49 after analysts said suitors Henley Group and Canada's Olympia & York could run into financing problems if they sought to use junk bonds. A takeover of SFSP would be the largest non-oil acquisition, coming close to $10 billion.
While most computer stocks advanced, Cray Research fell 4 1/8 to 66 7/8. Hambrecht & Quist in San Francisco reduced its earnings estimates for Cray for the next two years, citing the costs of Cray's transition to a new product.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 167.32 million shares.
Large blocks of 10,000 or more shares traded on the NYSE totaled 2,742, compared to 3,629 Tuesday.