The explosive stock market continued to record staggering volume levels today, but fell back from its August rally as profit taking pulled the Dow Jones Industrial Average down by more than 16 points.

The Dow industrials fell to 874.90 after reaching a nine-month high yesterday. But volume on the New York Stock Exchange was 122.7 million shares, up from 110.3 million yesterday, and second only to last Wednesday's record trading of 132.7 million.

Though the industrial average fell, advancing stocks on the New York exchange led declining issues, with 960 stocks rising and another 696 falling. Nearly 200 reached new highs, while only five hit new lows. The average price per share fell by 11 cents.

"There was some profit taking in the Dow-type stocks but, with such a tremendous velocity on the upside here, you're going to have some retracing," said Stewart Pillette, associate research director at Drexel Burnham Lambert Group Inc.

"But as far as we're concerned, you have to be invested here in stocks," Pillette said, noting that his firm has recommended to pension fund managers that they move their stock investment level from 35 percent of available funds to 50 percent in just the last week.

But the bond market eased upward today as government securities either remained unchanged or rose slightly and the Dow Jones 20-bond average rose 0.34. Corporate bonds were about half a point above Monday's closing levels, although trading was light across the bond markets.

Despite the market's downturn today, there was little indication of any dramatic changes on Wall Street that might signal an end to the market's recent burst. Dow industrials have climbed by 114 points in less than two weeks.

"There has been a rush to get pension money invested, and the next step was to wait for the public," Pillette said. "That is beginning, and they are likely to buy in faster-growing companies."

The market's downward move today was led by the blue-chip companies, which generally dictate the daily fate of the Dow averages. Following the release of auto sales figures, General Motors was off by 1 5/8, and Ford fell by 3/8.

On the American Stock Exchange, volume also surged ahead, topping 7.8 million shares, up from 6.9 million yesterday. The Amex index closed at 265.28 up 3.56 points, as a number of energy and technology stocks recorded modest price increases and the average share there was up 14 cents.

The over-the-counter market also recorded gains, as the NASDAQ composite index rose by 2.35 points to 172.23, with NASDAQ industrials rising 2.70 points to 194.55.