Dow Passes 1,600 Level, Falls Back to Lose 1.04

NEW YORK —  The stock market declined slightly Tuesday in a busy and erratic session, retreating after the Dow Jones industrial average passed 1,600 for the first time.

Energy and bank issues were notably weak.

The Dow Jones average of 30 blue chips, up more than 6 points at midday and off more than 10 points later in the session, closed with a 1.04-point loss at 1,593.23.

Volume on the New York Stock Exchange reached 175.73 million shares, against 145.28 million on Monday.

When the Dow touched 1,600 early in the session, it sported a gain of more than 100 points from its midday low less than two weeks before on Jan. 22.

Analysts said investors were once again trying to sort out both the positive and negative effects of falling oil prices.

Oil prices have tumbled to six-year lows this week on signs that major producers are inclined to step up production to maintain revenue rather than try to defend their pricing structure.

Analysts say lower energy prices are expected to stimulate the U.S. economy, acting in much the same way as a tax cut.

The drop in oil prices comes at a time when business activity in this country already appears to be gathering momentum. It also holds out the promise of low inflation, even though growth is picking up.

At the same time, it raises questions about the outlook for energy industries and the banking system, with its many energy loans.

Among the oil issues, Exxon dropped 1 5/8 to 49 1/8, Mobil 3/8 to 28 1/2, Chevron 1 1/2 to 34, Atlantic Richfield 1 1/8 to 51 and Amoco 1 5/8 to 53 7/8.

In the oil service and drilling sector, Schlumberger fell 1 3/8 to 30 7/8, Halliburton 5/8 to 23 7/8, Hughes Tool 1/2 to 11 3/8, Dresser Industries 1/8 to 16 and Zapata 3/8 to 5.

Point-plus losers among the bank stocks included Citicorp, down 1 3/4 at 48 3/8; Chase Manhattan, down 2 at 72; J. P. Morgan, down 3 1/8 at 62 5/8, and Manufacturers Hanover, down 2 1/8 at 42 3/8.

Precious metals stocks also gave ground as gold prices dropped. ASA Ltd. lost 2 to 36 7/8, Homestake Mining 1 1/8 to 23 7/8, Campbell Red Lake Mines 1 to 20 and Dome Mines 3/8 to 10.

Motorola, recommended by some brokerage house analysts, rose 1 3/8 to 41 3/8 in active trading.