French Vote Fails to Halt Surging German Mark : Markets: Analysts say slim vote majority wasn’t enough to calm nerves of traders; Dow drops 6.22.

The French oui to European unity was mostly a non event in world markets Monday, as traders took profits in stocks and pushed the powerful German mark higher still.

The Dow Jones industrial average lost 6.22 points to 3,320.83, cuing off a disappointing session in European markets that saw Paris shares plummet and most other key markets finish lower.

The CAC-40 stock index on the Paris Bourse tumbled 56.88 points, or 3%, to 1,826.06, wiping out most of last week’s gain. Analysts said traders were unhappy with the extremely narrow margin of approval in Sunday’s French referendum on European unity.

The final tally showed 51.1% of French voters in favor of the Maastricht treaty, the framework for the planned economic and political unification of Europe.

Investors who favor European unity wanted to see a larger affirmative vote, which might have gone a long way toward calming nerves frayed by last week’s currency crisis. Traders began fleeing currencies of some European nations last week on fears that Maastricht was doomed--which in theory would leave the weaker nations permanently overshadowed by the powerful German economy.

In approving the treaty only by a slim majority, French voters showed a deep division in public opinion that could mean a much longer and bumpier road to unification than financial markets would like, analysts said.

The French vote means “there’s more work to be done,” said Marc Pado, market analyst at Mesirow Financial in Chicago.

That realization helped spark another rally on the German mark, a sign that many investors continue to see Germany alone as a safe haven for money within Europe. But traders said the mood in currency markets was mostly calm, unlike the panic situation last week:

* The mark closed in New York at 1.484 to the dollar, a strengthening from 1.504 on Friday.

* The German currency also benefited from a further slide in the battered British pound, which was at the center of the currency crisis last week. A pound bought 2.54 marks on Monday, down from 2.61 on Friday. Against the dollar, the pound fell to $1.71 from $1.73.

Analysts had hoped that France’s affirmation of Maastricht, by restoring confidence in currencies other than the mark, would give European central banks room to cut the high interest rates that are strangling their economies.

But rate cuts seemed out of the question in France for the foreseeable future, as currency speculators attempted to hammer the French franc Monday. The franc weakened to 3.453 to the mark in New York, down from 3.412 Friday. Lower interest rates in France would add to the selloff by making French bonds less attractive.

In Britain, however, Prime Minister John Major offered vague suggestions that his nation would indeed cut rates further, even if it meant sacrificing the pound.

And Sweden’s central bank, which had jacked short-term interest rates to a stunning 500% last week in defense of the Swedish currency, lowered those rates to 50% Monday.

Overall, though, only a significant drop in German interest rates could restore some of the attraction in other European currencies, analysts said. But the Germans gave no indication Monday of altering their tough stance on rates, despite extreme pressure over the weekend from the United States and other Western nations.

The German posture hurt Frankfurt stocks, where the DAX index lost 15.47 points, or 1%, to 1,573.86.

In London, the Financial Times-100 index eased 6.90 points to 2,560.1. In Stockholm, the I-Topp index slumped 16.74 points, or 2.1%, to 775.10.

Tokyo mostly ignored the European mess: The Nikkei index eased 100.56 points to 18,066.24.

Among U.S. market highlights:

* Despite the disappointment with Europe, Mesirow’s Pado said U.S. stocks held up fairly well. “The bears tried to take the market down but they couldn’t really get the upper hand,” he said.

Still, losers outpaced winners 10 to 7 on the New York Stock Exchange, on slow volume of about 154 million shares.

* Airline stocks showed strength on hopes that the beleaguered industry’s profits may soon turn around. Delta rose 1 3/4 to 57 1/4, USAir added 5/8 to 13 7/8, and UAL, parent of United, gained 3 1/2 to 111. First Boston analyst Paul Karos narrowed his third-quarter loss expectation for UAL to 80 cents a share from $1.80.

* Chrysler also continued to rally after news last week that some analysts had raised earnings estimates for the current quarter. The stock jumped 3/4 to 24. Among competitors, Ford added 1/2 to 42 5/8, and GM inched up 1/8 to 34 1/4.

* Travelers Corp. jumped 3 1/8 to 20 5/8 on news that Primerica is taking a 27% stake in the struggling insurance giant. Primerica eased 1/4 to 41 1/8.

* Honeywell dropped 3 to 65 3/8. PaineWebber lowered its rating on the stock to neutral from attractive.

* Some of the day’s biggest gainers were companies making presentations at the annual Montgomery Securities growth-stock conference in San Francisco. Casino giant Circus Circus, for example, surged 2 1/2 to 52 1/4 after its president forecast strong third-quarter earnings.

Other presenters Monday whose stocks jumped included restaurant chain Showbiz Pizza, up 3/4 to 27 3/4; slot-machine maker International Game Technology, up 1 3/4 to 43 1/4; biotech leader Amgen, up 1 1/2 to 69 1/4, and casual-shoe maker Vans Inc., up 3/4 to 10 1/4.

Credit

U.S. bond yields inched up, apparently on speculation that European interest rates may remain high for the time being.

The price of the Treasury’s main 30-year bond fell 9/32 point, or $2.81 per $1,000. Its yield rose to 7.34% from 7.32% Friday.

Commodities

Gold fell as Europe’s currency crisis eased, but the losses were limited by uneasiness about European unity and speculation that the future holds higher inflation.

Gold for September delivery dropped $3.70 on New York’s Comex to $347.50 an ounce. Gold’s price rose more than $10 an ounce last week as investors took refuge from the chaotic currency markets in precious metals.

Also Monday, September silver dropped 4 cents to $3.81 on the Comex.

Analysts predicted last week that gold would quickly give back all its gains after Sunday’s French vote on European unity. But France’s whisker-thin endorsement of the treaty underscored the divisiveness that exists on the subject of European unity.

“It’s a very unstable situation. Nobody’s satisfied that this is the end of the debate as to the interrelationship among the countries,” said Bette Raptopoulos, metals analyst with Prudential Securities Inc. in New York.

Meanwhile, crude oil futures edged lower on the New York Mercantile Exchange as traders continued to assess last week’s OPEC decision to keep crude production steady. Light, sweet crude oil for October fell 6 cents to $21.92 a barrel.