Fed Decision On Rates Draws Mixed Response

Heavy industrial shares rose Tuesday as the Federal Reserve confirmed expectations it wouldn’t try to slow the economy with higher interest rates.

But the widely anticipated decision - already employed as a catalyst for several recent rallies - left the rest of the stock market mixed and little changed in another sluggish summer session.

The Dow Jones industrial average rose 21.82 to 5,721.26. It was the third straight gain for the blue-chip measure, which has crept back within striking distance of its all-time high at 5,778.00, set May 22.

“The Fed’s not going to raise interest rates, so the economy can continue to cook along. All the (economically sensitive) cyclical stocks that got sold off can be bought again,” said Richard A. Dickson, a technical analyst at Scott & Stringfellow Inc. in Richmond, Va.

Advancing issues outnumbered decliners by nearly a 7-to-6 margin on the New York Stock Exchange, where volume totaled 334.95 million shares as of 4 p.m. That was an improvement from Monday’s sleepy pace, the second slowest all year, but it was the ninth straight session below 350 million.

Some of the stocks that moved substantially or traded heavily Tuesday:

NYSE

First Data, down 3-1/2 at 77-3/8.

A Morgan Stanley analyst cut his estimate of what the data and transaction processing concern will earn in 1997, the Dow Jones News Service reported, citing market sources.

Three-Five Systems, up 2 at 11.

The Phoenix-based designer of devices for operational control and information display functions for various products announced plans to buy back up to 1 million of its 7.8 million common shares outstanding.

NASDAQ

Sano, up 1/2 at 15-1/2.

Bristol-Myers Squibb agreed to collaborate with Sano on a skin-patch version of Bristol-Myers’ BuSpar, a drug used to treat anxiety.

Maxis, down 1-3/4 at 11-3/4.

The company’s SimCity 3000 software simulation game is now expected to be introduced in mid-1997 instead of early 1997.

AMEX

Griffin Gaming & Entertainment, up 7-1/8 at 19-3/8.

Sun International Hotels (NYSE), down 3-5/8 at 48-1/8.

South African developer Sol Kerzner’s Sun International announced late Monday it will buy Griffin Gaming, which owns the Resorts casino-hotel in Atlantic City, for $210 million in stock, currently worth more than $20 per Griffin share.

Merv Griffin, 25 percent owner of Griffin Gaming, will remain involved in entertainment at the facility.