NEW YORK, SEPT. 23 -- Stock prices climbed in heavy trading today as buyers, lured by a spectacular advance in the previous session, returned to market.

The Dow Jones industrial average, which rocketed 73.25 points Tuesday in its biggest daily gain, rose 17.62 to 2585.67.

Gainers outpaced losers by 5 to 3.

Broad-market indexes rose. The New York Stock Exchange composite index added 1.05 to 179.53 and Standard & Poor's 500-stock index climbed 1.69 to 321.19. The price of an average share jumped 25 cents.

Big Board volume was approximately 220 million shares, compared with 209,510,000 Tuesday.

"Today's action, though not quite as exuberant, was a continuation of Tuesday's trend," said Larry Greenwald, co-manager of equity trading at Sanford C. Bernstein & Co. "The market is choppy but people feel there are still bargains to be had. They took advantage of the correction to take a shot and jump in."

Greenwald cited active participation by large, institutional investors. He predicted that the stock market would continue to react to near-term news and to dollar and bond market fluctuations.

The Dow surged Tuesday on a combination of dollar and bond market strength and futures-linked buying.

On the trading floor today, AT&T was the most active NYSE-listed issue, rising 3/8 to 34 1/8.

Dreyfus Strategic Municipals, Dreyfus Corp.'s first closed-end mutual fund, followed, closing at 9 3/4 in an initial common stock offering of 45 million shares priced at $10 per share.

National Semiconductor was third, rising 3/8 to 18 7/8. Among other semiconductor issues, Texas Instruments climbed 2 3/8 to 77 3/8, Motorola rose 1 1/4 to 70 5/8 and Advanced Micro Devices jumped 1 3/8 to 22 3/8. Intel jumped 2 1/8 to 58 in heavy over-the-counter trading.

Santa Fe Southern Pacific jumped 2 to 59. The company plans to buy up to 38 percent of its stock as part of a restructuring plan. It also said it will offer part of an energy unit to the public and spin off some property holdings.

Newmont Mining fell 2 1/4 to 92 3/4. A Delaware chancery court today temporarily barred Consolidated Gold Fields PLC, the largest shareholder of Newmont Mining Corp., from buying more shares of the energy and gold company, which is facing a takeover attack from an investor group led by Texas oilman T. Boone Pickens Jr.

G. Heileman Brewing eased 1/8 to 40 1/2. It agreed to be acquired by Bond Corp. Holdings of Australia for $40.75 a share.

Among blue chips, IBM fell 1 1/2 to 154 1/4 after jumping 5 1/4 Tuesday. General Electric, trading ex-dividend, eased 1/8 to 62. General Motors slipped 1/4 to 86 1/4, USX rose 1/2 to 37 1/8 and Merck rose 7/8 to 204 3/4.

Monsanto climbed 4 1/4 to 93 1/4, helped by the favorable comments of Morgan Stanley analyst Paul Lemig who raised his 1988 earnings estimates for the concern in anticipation of an earnings rebound for Monsanto's G.D. Searle unit.

Rexham rose 2 3/4 to 54. The company said it had received a letter from investor Asher Edelman offering to buy the company for $53 a share.

MCA climbed 3 1/2 to 62 on renewed takeover speculation, specifically to rumors that Conistan Partners was about to disclose that it had acquired a 5 percent stake in the company.

Great Atlantic & Pacific Tea Co. rose 2 to 42 3/4. The company reported stronger second-quarter earnings.