FINANCIAL MARKETS : Stocks Drift Lower; Dollar Mixed : Market Overview

The stock market settled lower, capping a dull, seesaw session as some investors focused on President-elect Bill Clinton’s economic summit. The Dow industrials eased 11.88 points to 3,292.20.

* Bond yields inched up in light trading, while the dollar ended mixed as European leaders patched up a rift over economic and political union at a meeting in Edinburgh over the weekend.

* Cattle futures jumped as another major winter storm hit the Southern Plains.

Stocks

Prices opened lower as trading got back to normal after the surprise storm that ripped through the New York area on Friday and curtailed trading activity.

But the tone of the market was decidedly bored, and most major indexes showed little change for the day. Volume on Big Board was just 187 million shares, and declining issues outnumbered winners by about 9 to 8.

“The market has been a little tired,� said Richard Meyer, head of trading at Ladenburg, Thalmann & Co. “People are taking a breather--they want to see what’s coming out of the Clinton camp.�

In Little Rock, Ark., Clinton opened a two-day economic conference where 320 business people, academicians and others will dissect the nation’s problems and consider solutions.

“People want to watch and see what comments he might have to make about the marketplace,� Meyer said.

Still, there are no expectations of real economic news coming out of the conference. Many analysts believe stocks are likely to churn in a narrow range for the rest of the year, as investors and traders digest the big gains of the past two months.

Among the market highlights:

* Airline stocks slid again, as investor concern about 1993 passenger traffic appeared to worsen. UAL, parent of United Airlines, sank 3 5/8 to 115 3/4 after it confirmed it is talking to Boeing about significantly reducing orders for planes. Boeing, however, added 1/4 to 34 5/8.

AMR, parent of American, lost 5/8 to 60 5/8, Delta fell 1 5/8 to 48 1/2 and Southwest lost 1 to 27 5/8.

* Some industrial issues continued to gain. Steel-maker Nucor leaped 1 3/8 to 72 1/8, Illinois Tool Works added 7/8 to 63 3/4, Chrysler rose 1/2 to 32 1/2 and Acme-Cleveland gained 1/2 to 8 1/2.

* Pacific Telesis, which announced plans Friday to separate its telephone companies from its faster-growing cellular communications business, gained 1/2 to 44 7/8 after trading at a 1992 high of 45 7/8. The announcement had been expected for some time.

* Wells Fargo added 1 1/4 to 78 3/4. The stock has been rising lately on vague rumors that a large Eastern bank might make a takeover offer for Wells, though analysts say such a move is highly improbable.

* U.S. Surgical slumped 4 1/8 to 65. The surgical device company said brokerage Sanford C. Bernstein cut its 1993 profit and revenue estimates on the company.

* In the biotech group, Calgene fell 1 1/4 to 15 3/4. The Davis, Calif., developer of genetically engineered plants disclosed plans to offer 2 million new shares of its stock.

Also, Biowhittaker rose 1/4 to 8 5/8 after its chief executive told analysts that fiscal 1993 earnings per share estimates of about 50 cents a share are “achievable,� but he warned that some slow sales carryover in the first quarter is likely.

* Among Southland issues, U.S. Alcohol Testing plunged 11/16 to 2 3/16 on the American Stock Exchange in continued heavy trading. The stock had jumped late last week in unexplained activity.

In a statement Monday, the Rancho Cucamonga-based company said, among other things, that it canceled its plans for a national advertising campaign for its Final Call consumer alcohol breath tester due to disappointing sales in the Pittsburgh test market.

Elsewhere, Glacier Water sank 2 3/4 to 10 1/4. The Oceanside-based water-vending company late Friday said it expects full-year 1992 earnings to be about 11% below original projections of 62 cents a share. It blamed recent cold weather in some of its key markets, including Florida and Texas.

Santa Ana-based Alpha Microsystems jumped 7/16 to 1 11/16 after it estimated its third-quarter net income would be $190,000 to $250,000, up from just $39,000, or 1 cent a share, last year.

Overseas, London’s Financial Times 100-share average gained 5.6 points to end at 2,721.8, while Frankfurt’s DAX average closed down 6.26 points at 1,469.75, its lowest close since Oct. 16.

In Tokyo, the Nikkei average lost 151.05 points to 17,289.97.

Credit

Interest rates were mostly higher. The yield on the Treasury’s 30-year bond rose to 7.46%, up from 7.43% Friday.

Recent economic news has buffeted the bond market, as investors appear worried that an improving economy will put upward pressure on interest rates in 1993.

Traders said there was little buying interest Monday from foreign investors, removing a source of support the market has enjoyed the past few weeks.

“The market just steadily drifted lower,� said Steven R. Ricchiuto, chief economist at Barclays de Zoete Wedd Securities Inc.

The federal funds rate, the interest on overnight loans between banks, was quoted at 3.000%, up from 2.813% late Friday.

Currency

The dollar was mixed, after leaders of the 12 European Community nations met and said they had successfully revived a flagging movement toward economic and monetary unity.

The German mark continued to gain in value, which traders ascribed to the German central bank strategy of keeping interest rates high. That makes mark-denominated investments worth more.

“For the rest of the year, there’s really no direction for the dollar,� said Peter Iversen, assistant chief dealer at the foreign exchange desk of Shawmut Bank in Boston.

The dollar closed in New York at 1.570 German marks, down from Friday’s close of 1.579 marks. The greenback fetched 123.77 Japanese yen, down from 123.90 Friday.

Commodities

Live cattle futures prices surged to a new eight-month high on the Chicago Board of Trade as the third winter storm in less than a month lashed the sodden feedlots of the Southern Plains.

Live cattle for December delivery jumped 0.88 cent to 79.30 cents a pound, the highest settlement for near-term deliveries since April 9.

Meanwhile, on New York’s Comex, near-term gold fell 60 cents to $334.60 an ounce and silver slipped 0.3 cent to $3.70.

Energy futures settled mostly lower on the New York Merc in featureless trading, with light, sweet crude oil finishing the day unchanged at $19.09 a barrel.

Market Roundup, D8