Martin Marietta's stock took a solid hit last week, dropping from $38 a share Monday to $33.63 a share Friday on daily volume that ran as high as 2 million shares. For the week, the stock was off 11.5 percent.

The flurry of activity began Tuesday, when Laurence J. Adams, Marietta's president and chief operating officer, told several hundred institutional investors in New York that the Betheda-based aerospace giant would add $25 million to its current spending for business growth projects -- representing 25 cents a share in earnings.

The $25 million, he said, would be on top of the $20 million already earmarked for this year -- for a total increase of $45 million.

However favorable these investments may be for Marietta in the long-run, some institutional investors apparently felt otherwise about the short-term outlook. Looking at the amount Marietta's per-share earnings would fall below expectations, they decided the announcement was bad news and promptly put in their sell orders.

Marietta, which traded 162,600 shares Monday, rocketed to 2 million shares on Tuesday as the stock fell off by $2.75. Another 1 million shares changed hands on Wednesday. The volume leveled off but the price slide continued through the week.

Adams' remarks prompted several brokerage house analysts who follow Marietta to reduce their estimates of company earnings for this year and next. Among them was Robert Kugel of Morgan Stanley, who dropped his estimates for this year from $3.55 to $3.30, not including a gain of about $1.30 a share from the sale of a subsidiary. For 1986, Kugel scaled down his estimate from $4.40 a share to $3.75, give or take a few cents, depending on the level of Marietta's spending for new business.

Marietta is heavily into the command, control and communications aspects of space and defense work, including space vehicles and missiles. The firm obviously hopes to expand those roles, and was reported by Investor's Daily to be interested in President Reagan's "Star Wars" proposal.

In his speech, Adams described the spending plan, saying: "We are positioning ourselves for long-term growth through investment in facilities, research and development, internal studies, and bid and proposal activity on a number of new opportunities."

Adams also said that the company "could invest at a significantly higher level in 1986 if the opportunities we see before us develop." That reference to 1986 also caught the eye of earnings-sensitive analysts.

One clue to the increased spending came from Thomas G. Pownall, chairman and chief executive of Marietta, who said: "The opportunities we see in several areas will not occur again."

Kugel said that despite the impact on earnings, he thought Marietta was "doing the right thing." Although Marietta might not win all the projects it is going after, he said, they are "important enough to warrant a must-win attitude."

How much Marietta is spending on that future business is something of a puzzle. The company doesn't like to give details, for competitive reasons, but apparently Pownall told analysts last year that Marietta then was spending about $125 million for business growth. Adding the $45 million earmarked for this year brings the total to about $170 million.

Paul H. Nesbit, an analyst for Prudential Bache, said it had appeared that the company's spending for growth might drop back to about $75 million next year, but it seems likely now to stay at the $170 million level -- almost $100 million more than expected. That, he said, will push down Marietta's margins this year and next.

"We would buy on price weakness, but the stock is not as attractive as it was," Nesbit added.

Nesbit noted that the Marietta slide came at a time when several defense stocks have been dropping. "The market has been giving a licking to any defense issues that have done well," he said. With the unemployment rate dropping to 7 percent, some investors believe the economy may be reaccelerating and are putting their money into companies that prosper when the economy is up. Selling defense stocks that have done well is one way for investors to raise money for their new purchases, he said. Bank-merger watchers are fascinated by Citizens Bancorp, parent of Citizens Bank & Trust Co., of Riverdale, Md., and its offer to acquire Central National Bank of Maryland. The deal went off at three times the book value of Central National. That's the highest paid yet for a local bank merger, higher even than the 2.9 times book value Sovran Financial Corp. paid for D.C. National Bank.

Central National's 500 shareholders, whose stock was selling for about $24, will give up 2.63 shares -- currently worth about $63 -- for each share of Citizens, which has been trading for about $98. That gives Central National's shareholders a substantial premium.

Tom Moore, president of Central National, says he talked with Virginia banks about merging but got a better offer from Citizens because of Central's strength in deposits and its presence in Montgomery and Prince George's counties. Central National, with headquarters in Silver Spring, has nine branches, and an application is pending for a 10th.

One other reason for interest in the merger is that Citizens, itself, has long been high on the list of candidates for an interstate merger. The deal with Central National may have the effect of fattening up the price for an eventual takeover of Citizens and its 93 branches. Williams Industries of Falls Church, a heavy-construction company that had 1984 revenue of almost $17 million, has sold 250,000 shares of its common stock at $8.50 a share to institutional investors. The offering was handled by two firms, including Offut & Taylor of Towson, Md.

After expenses, Williams will net about $2 million, most of which will be used to pay off short-term debt. The firm also plans to raise $2.5 million by mortgaging some of its real estate. By trading short-term debt for long-term debt, said Vice President W. R. Weadon, the company will dramatically increase its capacity to be bonded on certain construction jobs. This, in turn, may allow Williams to take on more jobs.

Meanwhile, Williams is getting closer to acquiring Concrete Structures Inc. of Richmond, which could add $8 million to $12 million a year to Williams' revenue. Concrete Structures, in bankruptcy since 1978, currently is operated by Williams under a management agreement. The acquisition probably will cost Williams about $2.5 million, Weadon said. Federal Realty Investment Trust will split its stock 3-for-2, to be distributed Nov. 5 to shareholders of record Oct. 21. This is Federal's second stock split in 26 months. . . . Dominion Federal Savings & Loan of McLean declared a 5-for-1 stock split payable Sept. 20 to stockholders of record Aug. 30. The split will help create an active market for the thrift's stock, said Chairman William L. Walde. Dominion went public in 1980 at $13 a share. The stock traded recently at $130.