It’s Good Thursday for the Dow, Up 103

Blue-chip stocks rebounded Thursday from a two-day pullback, spurring a broad market rally in advance of the three-day holiday weekend.

The Dow Jones industrials gained 103.38 points, or 1.2%, to 8,994.86, after trading as high as 9,014.30--just shy of Monday’s record close of 9,033.23.

Meanwhile, most foreign stock markets also gained. But the U.S. bond market was stagnant, despite more good news on inflation.

On Wall Street stocks snapped out of a midweek funk, as winners topped losers by 19 to 11 on the New York Stock Exchange and by 25 to 17 on Nasdaq.

Trading volume was subdued, however, as some market players took an early holiday leave. All U.S. financial markets will be closed today for Good Friday.

The broad market wasn’t as strong as the Dow on Thursday, but most major indexes turned in respectable gains. The Nasdaq composite rose 13.23 points, or 0.7%, to 1,820.24. The Standard & Poor’s 500 added 0.8% to 1,110.67.

Still, the S&P; index was down 1.1% for the week. The Nasdaq index lost 1.9% for the week.

Worries over first-quarter corporate earnings and concern about Monday’s euphoria in the financial-stock sector--after Citicorp and Travelers Group announced a blockbuster merger--contributed to profit-taking in many stocks on Tuesday and Wednesday.

But some strong earnings reports on Thursday helped buoy the market. Also, financial stocks rallied as investors bet on further consolidation in the industry.

Wall Street also got more good news on inflation, as the government reported that wholesale prices overall fell in March for the fifth straight month--another sign that deflation, rather than inflation, is the order of the day.

The bond market, however, failed to derive much benefit from the inflation report. Yields were largely unchanged, with the 30-year Treasury bond yield easing to 5.88% from 5.89% on Wednesday. The yield was 5.79% a week ago.

Ordinarily, the lack of inflation ought to be a balm for bond yields. But the bond market has been pressured this week by the stronger Japanese yen, and hence weaker dollar--which could encourage Japanese investors to avoid U.S. bonds and other dollar-denominated securities.

Anticipating the Japanese government’s move to stimulate the country’s beleaguered economy the yen has risen all week, and was bolstered Thursday as the Bank of Japan sold dollars for yen. (See story, A1)

The U.S. stock market, however, is more focused on corporate earnings reports, heavy inflows into stock funds from small investors, and on the ongoing takeover boom, analysts say.

Among Thursday’s highlights:

* Stocks rising on first-quarter earnings reports included Chrysler, up 44 cents to $43.50; Abbott Labs, up 69 cents to $76.38; Yahoo, up $17.25 to $114.50; Potlatch, up $1.31 to $43.75; and Fannie Mae, up 50 cents to $63.81.

* In the financial sector Travelers inched up 6 cents to $65.31 while Citicorp rose 75 cents to $165.63.

Among other financial issues, American Express jumped $3.25 to $107.06, Merrill Lynch leaped $2.94 to $94.94, SunAmerica gained $1.19 to $51.69, Wells Fargo soared $10.31 to $352.13 and NationsBank jumped $2.19 to $76.44.

* On the downside, drug stocks continued to suffer from profit-taking. Merck lost $1.56 to $126.25, Warner Lambert fell $1.31 to $176.13 and Lilly dropped $1.06 to $63.94.

* The tech sector was higher, with Intel up $1.19 to $73.75 and IBM rising $1.88 to $106.38. Internet-related stocks continued to soar after Yahoo’s strong earnings report. Amazon.com surged $6.63 to $95.25 and EarthLink gained $3 to $69.63.

In foreign trading Tokyo’s stock market rose 1% in advance of the government’s new fiscal stimulus program.

In Europe the Frankfurt market gained 0.9% while Paris was up 0.5%. In Latin America the Mexico City market rose 1.1%.