REBOUND ON WALL STREET : Credit : Bond Market Mixed on the Day After

NEW YORK â€”  U.S. Treasury bonds Monday returned most of their gains from the year’s biggest rally last week as investors cashed in on a previous move to safer fixed-income investments.

However, the $200-billion market for high-yield junk bonds, which was partly blamed for Friday’s stock price rout, showed signs of improving, with trading picking up from a near standstill. Prices were even to lower.

Investment-grade corporate bonds rose slightly while municipal bonds were unchanged to higher, traders said.

And overseas, bond prices were mostly higher, reflecting a decline in stock prices abroad.

Most of Monday’s slump in the U.S. market came from profit taking, particularly in Treasury bonds, following an improvement in stock prices here, experts said.

“We’re getting the flip side of Friday,� said Maria Ramirez, a managing director at Drexel Burnham Lambert Inc. “Greater opportunities (for profit) like this don’t come that often.�

Prices of some government bonds gained as much as $25 per $1,000 face value Friday and yields skidded to levels not seen in two years following a 190.58-point tumble on the Dow Jones industrial index.

Concerns about corporate takeovers and the junk bonds that are often used to finance them helped stoked the panicky selling in stocks, as well as this year’s biggest government bond rally.

Fixed-income securities--especially Treasury bonds--benefited from that turmoil since they’re considered a safe haven for investors.

Some bond traders said the fact that the stock market didn’t continue Friday’s free-fall helped keep a lid on bond prices.

“I think the profit taking (in many bonds) was generated by the fact that the stock market wasn’t getting hit big again,� said Elliott Platt, chief economist at Donaldson Lufkin & Jenrette Inc.

F. Ward McCarthy, a principal at Stone & McCarthy Research Associates Inc., said the credit markets also were disappointed that the Federal Reserve didn’t provide more than the $2 billion in funds it injected into the financial system.

In late trading Monday in the secondary market for Treasury bonds, the bellwether 30-year issue was off about 1 3/4 point, or $17.50 per $1,000 face amount, after rising around $20 on Friday.

Its yield, which moves inversely to the price, jumped to 7.97% from 7.88%.

Prices of short-term government issues fell between 9/16 point and 3/4 point; intermediate maturities were down about a point, and long-term issues declined by about 1 3/4 point, according to figures provided by Telerate Inc., a financial-information service.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, stood at 1,189.15, off 7.22.

In corporate bond trading, highly rated issues gained some ground. Moody’s investment grade corporate bond index, which measures total return on a portfolio of 80 corporate bonds with maturities of five years or longer, rose 0.23 to 336.65.

Junk bonds continued to decline, although many traders said activity picked up significantly and some issues that had fallen as much as $30 or $50 per $1,000 face value in Monday’s opening, had less severe losses at the close.

“I think you’re seeing activity because people are saying at these levels you can’t afford not to buy,� said Joan Greenberg, a bond trader at Dean Witter Reynolds Inc.

In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose to 93 5/32 from 92 26/32 on Friday. The average yield to maturity slipped to 7.35% from 7.41%.

The biggest gainers and losers, by percentage, on the New York Stock Exchange, the American Stock Exchange and in the over-the-counter market.

WINNERS AND LOSERS NYSE

Winners Close Monday gain % Change Service Resources $6.625 $1.75 35.9 Home Owners Savings Bank 3.50 0.50 16.7 Germany Fund 11.625 1.625 16.3 ConAgra 36.875 4.875 15.2 Mark IV Ind. 20.125 2.50 14.2

Losers Close Monday loss % Change AMR Corp. $76.50 $22.125 22.4 UAL Corp. 222.875 56.875 20.3 Warner Computer 5.125 1.00 16.3 BayFincl 3.50 0.625 15.2 Aileen Inc. 2.625 0.375 12.5

AMEX

Winners Close Monday gain % Change Americus Trust for Chevron Score $13.875 $3.25 30.6 Healthvest 6.25 1.25 25 Americus Trust for American Express Score 8.375 1.625 24.1 University Patents 7.00 1.25 21.7 ISI Systems 18.625 3.125 20.2

Losers Close Monday loss % Change Medchem Products $6.625 $1.625 19.7 Triangle Corp. 5.00 0.875 14.9 American Shared Hospital Services 3.875 0.50 11.4 Diodes Inc. 2.00 0.25 11.1 Electrosound Group 2.00 0.25 11.1

OTC

Winners Close Monday gain % Change Grayhound Electronics $17.50 $7.375 72.8 Southland Corp. (pref.) 2.625 0.75 40 Greenwich Pharmaceutical 5.125 0.875 20.6 First Woburn Bancorp 4.00 0.50 14.3 PACE Mem 22.125 2.625 13.5

Losers Close Monday loss % Change Cityfed Financial (pref.B) $3.50 $1.50 30 Drug Screening 4.25 1.00 21.8 Waters Instruments 3.375 0.875 20.6 Imnet Inc. 2.00 0.50 20 ComunTran 5.25 1.25 19.2

HOW THE INDUSTRIALS PERFORMED

Monday closing prices, in dollars per share, for the 30 component stocks of the Dow Jones industrial average. Those stocks are among the most widely held by investors.

Stock Monday close Up/down % change Alcoa 72.75 up 0.625 +0.87 Allied Signal 35.375 up 3.375 +10.55 American Express 37.375 up 2.375 +6.78 AT&T; 43.00 up 3.25 +8.18 Bethlehem Steel 18.50 Unch. --- Boeing 59.25 up 1.875 +3.27 Chevron 63.875 up 4.00 +6.68 Coca-Cola 66.75 up 2.00 +3.09 DuPont 116.75 up 3.75 +3.31 Eastman Kodak 45.00 up 0.25 +0.56 Exxon 45.375 up 1.125 +2.54 General Electric 56.50 up 2.25 +4.15 General Motors 45.375 up 2.375 +5.52 Goodyear 49.125 up 0.625 +1.29 IBM 103.00 up 1.00 +0.98 International Paper 57.875 up 0.875 +1.54 McDonald’s 30.50 up 1.50 +5.17 Merck 74.75 up 2.00 +2.75 Minnesota Mining 72.75 up 1.25 +1.75 Navistar 4.125 Unch. --- Phillip Morris 43.25 up 2.25 +5.49 Primerica 27.75 up 1.625 +6.22 Procter & Gamble 123.625 up 3.875 +3.24 Sears, Roebuck 42.00 up 1.875 +4.67 Texaco 51.375 down 0.375 -0.72 USX 34.25 up 1.25 +3.79 Union Carbide 25.875 up 1.125 +4.55 United Technologies 53.75 up 0.75 +1.42 Westinghouse 65.25 up 3.00 +5.06 Woolworth 60.125 up 0.625 +1.05