Dow Cuts Rally Short, Closes With 2.09 Loss

NEW YORK —  The stock market was mixed Friday, pulling back from an early gain in a session typical of the hesitant pattern that has prevailed all through September.

The Dow Jones index of 30 industrials, up about 12 points at midday, ended the day with a 2.09 loss at 2,692.82. For the week, the average posted a net gain of 11.21 points.

Advancing issues outnumbered declines by about 8 to 5 in nationwide trading of New York Stock Exchange-listed stocks, with 885 up, 565 down and 521 unchanged.

Big Board volume was 155.30 million shares, down from 164.24 million in the previous session. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 184.73 million shares.

Analysts said the market appeared to benefit in early trading from last-minute buying by investing institutions readying their portfolios for reports to clients on the third quarter, which ended with Friday’s session.

But they said uncertainty over recent weakness in the dollar and some upward pressure on interest rates limited enthusiasm for stocks.

The government reported Friday morning that the index of leading economic indicators rose 0.3% in August. The figure came in close to advance estimates on the Street, and had little perceptible effect on the market.

After dropping 44.45 points in September, the Dow Jones industrials reached the end of the third quarter showing a net gain of 534.25 points, or 24.64%, since New Year’s Day.

Among actively traded blue chips, American Telephone & Telegraph rose 1 to 44 7/8; International Business Machines gained 1/4 to 109 1/4; General Electric dropped 1/2 to 56 1/2, and McDonald’s was down 5/8 at 29 3/4.

Harcourt Brace Jovanovich tumbled 4 1/8 to 12 1/8 as the most active NYSE issue on volume of more than 3.6 million shares. Analysts cited disappointment over the $1.1-billion price for which Anheuser Busch agreed to buy six HBJ amusement parks.

Anheuser Busch, which separately announced the death of its former chairman, August A. Busch Jr., rose 1 1/8 to 43 3/8.

Airline issues were broadly higher amid signs of a revival of takeover enthusiasm. UAL gained 4 1/2 to 282; AMR 2 3/4 to 86 1/2, and Delta Air Lines 2 3/8 to 73 3/4.

In Tokyo, stocks fell back on profit taking after a relatively active trading week. The Nikkei 225-share index fell 53.22 points to 35,636.76.

Share prices closed modestly higher on the London Stock Exchange. The Financial Times-Stock Exchange 100-share index rose 7.7 points, or 0.3%, to 2,299.4, the day’s high.

Credit

Bond prices rebounded late Friday after sustaining modest losses earlier in the day as investors continued to keep a close watch on the dollar.

The Treasury’s benchmark 30-year bond rose 7/32 point, or about $2.20 per $1,000 face amount. Its yield, which falls when the price rises, slipped to 8.23% from 8.25% late Thursday.

Yields on three-month Treasury bills edged up to 8.15% as the discount added 1 basis point to 7.89%. Yields on six-month bills rose to 8.29% as the discount advanced 3 basis points to 7.86%. Yields on one-year bills rose to 8.45% as the discount gained 2 basis points to 7.85%.

The federal funds rate, the interest that banks charge on overnight loans to one another, fell to 8.50% after peaking at 9.75% during the day. The rate was 9.25% late Thursday.

Currency

The dollar resumed its decline under pressure of a fifth straight day of dollar sales by central bankers.

After rising slightly on Thursday, the dollar fell to its lowest level since late July.

In Tokyo, the dollar eased to 139.35 Japanese yen from 140.85 yen on Thursday. Late Friday in London, the dollar traded at 139.57 yen. In New York, the dollar traded at 139.05 yen, down from 140.50 Thursday.

In London, the pound rose to $1.6150 from Thursday’s late $1.6085. In New York, the pound rose to $1.6195 from $1.6107.

The late bid for gold in London was $367.00 an ounce, up from $366.50 late Thursday. The Zurich late bid was $366.50 an ounce, up from Thursday’s $366.35.

Earlier in Hong Kong, gold closed at $369.15 a troy ounce, up from Thursday’s $366.35.

Commodities

Wheat futures prices climbed to three-month highs on the Chicago Board of Trade following an Agriculture Department report indicating U.S. wheat stocks were about 80 million bushels below market expectations.

On other commodity markets, corn and soybean futures retreated, livestock and meat futures were mixed, energy futures were mostly higher and precious metals declined.

Wheat futures settled 2.25 cents to 7.75 cents higher, with the contract for delivery in December at $4.0725 a bushel, the highest settlement for a near-month wheat contract since June 30.

Corn was 1.25 cents lower to 1.50 cents higher, with December at $2.33 a bushel; oats were 1.75 cents to 2 cents lower, with December at $1.44 a bushel, and soybeans were 1.50 cents to 4 cents lower, with November at $5.68 a bushel.

In a report released after the close of trading Thursday, the USDA projected wheat stocks for June 1, 1990, at 1.91 billion bushels compared to trade estimates averaging 1.99 billion.

Corn stocks as of Sept. 1 were estimated at 1.93 billion bushels compared to trade estimates averaging 1.89 billion, and the USDA estimated soybean stocks as of Sept. 1 at 182 million bushels, compared to trade estimates averaging 159 million.

The USDA report provided the main support for the wheat market but traders said a surge in export sales of U.S. grains during the week also helped boost wheat futures and limited losses in the corn and soybean markets.

Livestock and meat futures finished mixed on the Chicago Mercantile Exchange ahead of the USDA’s quarterly hogs-and-pigs report, which estimated the U.S. swine herd as of Sept. 1 at 58.4 million head, about the same as last year and very close to market expectations.

But analysts said near-term hog futures may open lower Monday in reaction to another section of the report that showed pork producers had kept slightly more hogs for marketing than traders had expected.

The hog report was perceived as slightly bullish for the deferred contracts, though, because it indicated pork producers had backed off a bit on their fall breeding intentions, which would imply a smaller supply of hogs next spring and summer.

Most energy futures prices rose on the New York Mercantile Exchange as traders were encouraged by OPEC’s ability to reach an agreement to limit production.

Gold and silver futures fell moderately on New York’s Commodity Exchange, despite a drop in the dollar, amid pre-weekend profit taking.

Gold futures ended 30 cents to 90 cents lower, with October at $367.20 an ounce; silver was 3.7 cents to 4 cents lower, with October at $5.226 an ounce.