Dow Rebounds From Early Plunge, Edges Up

Stocks declined broadly Tuesday in another volatile session. But the Dow Jones industrial average snapped back late in the day as once again steep losses encouraged investors to shop for bargains.

The Dow industrials gained 2.89 to close at 5,583.89, charging back from a deficit of more than 95 points earlier in the afternoon. The famed Wall Street barometer has swung sharply since last week’s strong report on employment, shedding 171 points on Friday and adding 110 points on Monday.

Broader market indicators trimmed their steep losses, too, but still ended the day in negative territory.

“It will continue to be a volatile setting for a while,” said A. Marshall Acuff Jr., market strategist at Smith Barney. “As each economic indicator comes out, the chances of perceptions getting blown around is high in a setting like this. This is not a one or two day event.”

Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume totaled 453.83 million shares as of 4 p.m., almost even with Monday’s pace.

“That’s not a very convincing bounce back in terms of the broad market,” said Michael Metz, market analyst for Oppenheimer & Co. The late rebound may have followed a weak report on retail sales that helped justify some bargain hunting, he added.

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

NYSE

Life Partners Group, up 4-1/4 at 20.

Conseco, up 3-1/8 at 66-1/8.

Conseco, an insurance and financial services holding company, said it is acquiring Life Partners for $600 million in stock and would assume $240 million in debt. Life Partners shareholders would get $21 in Conseco stock for each of their shares.

IBM, down 3 at 114-1/4.

Digital Equipment, down 2-1/8 at 61-3/4.

Compaq Computer, down 1-3/4 at 37.

Hewlett Packard, down 1-3/8 at 93-3/4.

Computer stocks fell after Salomon Brothers reportedly downgraded IBM to hold from strong buy, and lowered its rating on Digital Equipment to buy from strong buy, according to market sources cited by the Dow Jones News Service.

NASDAQ

America Online, up 7-1/8 at 55-1/2.

Microsoft, down 3/4 at 95-3/4.

Netscape, down 1 at 45-1/4.

The companies announced a deal that will give America Online exposure on most new computers by being featured in Microsoft’s popular Windows 95 operating system. In return, America Online will incorporate Microsoft’s Internet browser into its online service, the nation’s largest with 5 million subscribers.