Market Ekes Out Gain in Quietest Trading in 2 Years : Merck Advances 5 3/4 to Nudge Dow Jones Industrials Up 3.52

NEW YORK —  Wall Street stocks edged higher at the close on Friday amid the lightest trading in two years as few participants returned to action after the Christmas holiday break.

The Dow Jones average of 30 industrials rose 3.52 to 1,930.40, bringing its gain for the week to 1.55 points.

On the New York Stock Exchange, volume fell to 48.86 million shares from 95.41 million on Wednesday. It was the quietest trading day since 46.79 million shares changed hands exactly two years earlier on Dec. 26, 1984.

Trading was mixed within a narrow range for much of the day, with prices moving higher in afternoon activity as the markets thinned. As on the day before Christmas, many market participants left work early or were absent for a long holiday weekend.

Trendless Session

“The market is trendless,” said Robert Kahan, head of equity trading at Montgomery Securities in San Francisco. “There’s a total lack of institutional interest; no one is here. It’s a shame the New York Stock Exchange had to open today.”

The Dow was nudged higher on the strong performance of Merck, one of the index’s components, which rose 5 3/4 to 129 to lead the blue chips and a strong drug sector. Merck and several pharmaceutical stocks gained ground owing at least partly to the slump of the dollar, which boosts foreign exchange earnings. Pfizer rose 2 to 62 7/8, SmithKline Beckman climbed 2 1/8 to 94, Warner Lambert gained 1 3/4 to 60 1/8 and Upjohn rose to 95 3/4.

In the broader market, advancing issues outpaced declining stocks by more than eight to five on the New York Stock Exchange.

Southern California Edison led the NYSE most active list, rising 1/8 to 35 on volume of 3.97 million shares. The stock begins trading ex-dividend on Monday.

Active Issues

Other active issues included AT&T;, down 1/8 at 25 3/8; IBM, unchanged at 122; Federal National Mortgage, up 3/8 to 41 1/2; Goodyear, up 1/8 to 41 3/4, and Navistar, down 1/8 to 4 3/4.

Bond prices showed little movement.

In the secondary market for Treasury bonds, the bellwether 30-year issue was up 1/16 point to yield 7.33%, unchanged. Short-term governments were unchanged, intermediate maturities were off 1/32 point and 20-year issues were up 1/32 point.

Yields on three-month Treasury bills were unchanged at 5.56%. Six-month bills were unchanged at 5.58%, and one-year bills were unchanged at 5.57%.

The federal funds rate, the interest on overnight loans between banks, traded at 6.375%.

In corporate trading, industrials and utilities were unchanged in light dealings, according to the investment firm of Salomon Bros.

Among tax-exempt municipal bonds, general obligations and dollar bonds were unchanged and trading was quiet, Salomon Bros. said.