Stocks Zigzag As Budget Debate Heats Up

The Dow Jones industrials inched further into record territory Monday, but broad market indexes lost ground.

The Dow rose 2.53 to 4,872.90, setting a record for a fourth straight session. The blue-chip index seesawed for most of the trading day, hovering at slightly depressed levels right before the close and then pushing ahead.

Declining issues led advancers by about 6-5 on the New York Stock Exchange. Big Board volume totaled 292.37 million shares as of 4 p.m. vs. 298.69 million last Friday.

The Nasdaq composite index fell 5.41 to 1,058.46, under pressure from declining technology stocks.

Concerns over a default on the nation’s debt weighed down the market for most of the morning. But those losses were erased this afternoon on optimism that the default would be avoided.

“On one side of the aisle, you have people who say ‘this is no big deal’ and the markets will look beyond this to getting a balanced budget,” said Jim Meyer, director of research at Janney Montgomery Scott Inc. “The other side says ‘this is horrendous.’ The combination of those thoughts kept the market swinging today.”

Some of the stocks that moved substantially or traded heavily:

NYSE

AMR, down 2-1/2 at 69-3/8.

USAir, up 1/8 at 15-3/8.

UAL, up 1/8 at 182-5/8.

As United Airlines directors met to consider bidding for USAir Group Inc., investors speculated there could be a bidding war between UAL, the parent company of United, and AMR Corp., parent of American Airlines. After trading ended, UAL said it would not make a bid for USAir.

Aetna, 5/8 up at 74-7/8.

The Wall Street Journal reported that Kohlberg Kravis Roberts & Co. is preparing an offer for Aetna Life & Casualty Co.’s property-casualty operations that could top $4 billion.

Wells Fargo, down 5 at 210-3/8.

First Interstate, down 1-3/8 at 133-3/8.

First Bank, down 1/8 at 53.

Wells Fargo & Co. increased its hostile bid for First Interstate Bancorp to nearly $10.9 billion from its original offer of $10.1 billion. Wells Fargo also said it is taking a number of legal steps to block First Interstate’s planned merger with “white knight” First Bank System Inc. and offer its more lucrative deal directly to shareholders.

Vigoro, up 9-3/4 at 55.

IMC Global, down 1-5/8 at 73.

Northbrook, Ill.-based IMC Global agreed to acquire Vigoro of Chicago in a stock swap valued at roughly $1 billion. Both companies make fertilizer and related products.

NASDAQ

Apple Computer, up 1-1/8 at 40-7/8

Dataquest Inc. and International Data Corp., market research firms, released two independent surveys that said Apple Computer had shipped the most computers in the United States during the third quarter.