Mickey Mouse Roars; Market Yawns

The stock market muddled through a humdrum session Monday as economic concerns neutralized excitement over a major merger.

Popular Wall Street indicators registered minor losses. The Dow Jones industrial average drifted at slightly depressed levels for much of the day and ended with a deficit of 7.04 at 4,708.47 despite a solid gain in the stock price of The Walt Disney Co., which revealed plans to acquire Capital Cities/ABC in a transaction valued at about $19 billion.

Disney was the New York Stock Exchange’s volume leader and spurted $1.25 to $58.62-1/2 and Capital Cities/ABC soared $20.12-1/2 to $116.25 also in brisk Big Board trading. A buying frenzy ensued in the entertainment sector; CBS surged $1.87-1/2 to $77.75.

Gainers squeaked past losers on the Big Board with a closing tally showing 1,165 stocks up, 1,056 down and 789 unchanged. Volume on the NYSE floor eased to 289.84 million shares as of 4 p.m. Eastern time from 310.05 million Friday.

The mammoth Disney-Capital Cities deal revved up speculation about corporate takeovers, which has been providing a beneficial background for stocks.

Investors have been using the possibility of takeovers as a criterion for stock purchases and the surprise news from Disney focused extra attention on the media-entertainment group, where consolidation has built momentum in recent months.

Some of the stocks that traded heavily or moved substantially:

NYSE

Wallace Computer Services, up 14-3/8 to 58-3/8.

The stock rocketed in response to the revelation that Moore Corp. is launching a hostile takeover bid of $1.3 billion, or $56 a share, for Wallace. Moore fell 7/8 to 22.

USAir, down 1-5/8 to 9-1/2.

The carrier ended talks with its unions on a wage concession and restructuring package and said it would focus on labor cost reductions in collective bargaining.

James River, up 3/8 to 33-3/8.

The company plans to cut 4,400 jobs in North America and Europe to generate savings up to $640 million.

NASDAQ

Chipcom, down 2-7/8 to 41.

Wall Street wasn’t impressed with the possible bidding war for the the computer network equipment maker.

AMEX

Ivax, down 1 to 24-1/8.

The company’s earnings failed to impress Wall Street. Ivax, a maker of generic drugs, said it earned $28.1 million, or 24 cents a share.