Stocks finish mixed Dow gains 5.67

NEW YORK — NEW YORK -- Stock prices finished mixed yesterday as a burst of computer-guided sell orders in the final hour erased gains related to a stronger-than-expected employment report.

The Dow Jones industrial average rose 5.67, to 3,404.58, ending well below the session high of 3,433.22. Goodyear Tire & Rubber Co., Sears, Roebuck & Co. and Aluminum Co. of America led the advance. For the week, the Dow gained 33.71 points.


The market shook off an early downturn in bond prices after the Labor Department said the unemployment rate fell to 7 percent and the economy added 365,000 non-farm jobs last month, the biggest gain in four years.

"People are concerned that if the bond market falls on its face, the whole stock market falls apart," said Dan Marciano, senior vice president in equity trading at Dillon, Read & Co. "But if bonds fall because the economy's picking up, that's good for stocks."


Treasury bond yields have been hovering near record lows of about 6.75 percent on the 30-year bond amid confidence that President Clinton's economic plan would reduce the federal budget deficit and subdue the recovery.

"People are worried that if interest rates start going up, it may stall the economy," Mr. Marciano said. "We're really in a 'Catch-22,' and we have been in the last few months."

Even so, optimism about the economy prompted investors to overlook the rise in bond yields and focus instead on the potential for higher corporate profits, traders said.

"The dominant trends in the economy are up," said Alfred Goldman, director of technical research at A. G. Edwards & Sons. "Corporate earnings will be up, and inflation is low. Where else are you going to put your money except in stocks?"

Among broad stock indexes, the Standard & Poor's 500 index slipped 1.23, to 446.11, and the NASDAQ Combined Composite index edged up 0.64, to 681.37. The Dow Jones transportation average rallied 18.34, to 1,538.45.

Declining common stocks led advancing issues on the New York Stock Exchange by a slight margin. Trading was moderate, with 247 million shares changing hands on the Big Board as of 4 p.m.

International oil, telephone, electric utilities and food stocks fell the most in the S&P; 500. Some of the sharpest gains were posted by retailers, automobiles, transportation and other industries whose earnings rise more than others when the economy expands.

"Everyone suspects there will probably be a downward revision to this month's [jobs] figures, but the figures still show growth," said Barry Berman, head trader at Robert W. Baird. "At this point, interest rates are low enough that the stock market would tolerate a falling bond market."