Dow Snaps Three-Session Slump

Blue-chip stocks halted a three-session slide, led by the battered energy group, but the broad market stumbled again Monday amid all the uncertainty hanging over Asia and Washington.

The Dow Jones industrial average rose just 12.20 to 7,712.94, but snapped a three-session losing streak that had sliced 172 points off the blue-chip barometer.

But most broad-market indexes finished lower despite a strong day for Asian stocks and U.S. bonds, solid profit reports from AT&T and General Motors, and news of a $9.6 billion merger between Compaq Computer and Digital Equipment.

“There’s just a malaise here. We’re coming to the end of January, and after three great years, 1998 has started out in hesitant fashion,” said Larry Wachtel, market analyst at Prudential Securities, noting January’s reputation as a reliable barometer for the entire year.

While a majority of the fourth-quarter profit reports released over the past two weeks have beaten forecasts, investors have grown increasingly fixated on an expected slowdown in earnings growth during 1998.

Declining issues outnumbered advancers by a 7-to-6 margin on the New York Stock Exchange, where volume totaled 556.22 million, just the third time this year the tally hasn’t exceeded 600 million.

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

NYSE

Digital Equipment, up 10 at 55-7/16.

Compaq Computer, down 2-3/4 at 29.

Houston-based Compaq agreed to buy Digital for about $9.6 billion, or $60 a share, in a deal that would create a powerhouse in consumer PCs and networked business machines.

AT&T, down 3-13/16 at 61-11/16.

The company reported better-than-expected results for the fourth quarter and outlined plans to eliminate up to 18,000 jobs and freeze executive salaries in a $1.6 billion cost-cutting drive to revitalize its telecommunications business.

Nabisco Holdings, down 5-3/4 at 39.

The food company met expectations with $146 million profit for the fourth quarter, but cautioned that growth prospects for 1998 are very uncertain.

Continental Airlines class B, up 1-7/8 at 49-3/8.

Continental Airlines class A, up 2-5/8 at 56-5/8.

Northwest Airlines (Nasdaq), up 4-9/16 at 55-5/16.

Northwest agreed to buy a stake in Continental for $519 million in cash and stock as part of a new global alliance that will stitch together the nation’s fourth- and fifth-biggest airlines.