Dow Gains 15.43 to End Week at Record Again : Market Overview

* Stocks rode an afternoon advance to a new high, overcoming renewed economic uncertainty and some disappointing corporate earnings reports.

The Dow Jones industrial average climbed 15.43 points to 3,264.98, stretching its gain for the week to 65.52.

* Interest rates fell and the dollar plunged, helped by signs of economic weakness and comments from a Federal Reserve official implying that the Fed isn’t inclined to raise rates soon.

Stocks

Blue chip issues got a boost from professional trading games involving stocks and expiring stock options and futures contracts.

The broader market was mixed, with smaller stocks suffering from profit taking.

Nonetheless, on the New York Stock Exchange advancing issues outnumbered declines 9 to 8 as trading volume fell to 287.37 million shares from Thursday’s 336.24 million.

“It’s been absolutely incredible,” said Ron Doran of C. L. King & Associates. “I still find that there are buyers around out there.”

The market posted losses early in the session after reports pointed to further economic weakness.

A key index of consumer confidence fell to 67.1 in early January from 68.2 in December, the lowest level since the outbreak of the Gulf War. Rumors early in the week were that the confidence index was turning sharply higher this month.

Meanwhile, the government said December industrial production dropped 0.2%.

IBM, which released fourth-quarter earnings Friday, opened lower, then advanced as some buyers saw reason to believe that the beleaguered computer giant may be poised for an upturn.

IBM’s stock rise “gave people confidence,” said John Blair, head trader of County Natwest. IBM closed up 87.5 cents at $96.375.

But the market seemed to draw the most steam from comments late in the day by Federal Reserve Gov. Wayne Angell. Speaking in Chicago, he said Americans shouldn’t assume that the Fed will automatically begin to raise interest rates once the economy starts to grow again.

Fears that interest rates can only go higher from their current 27-year lows had clipped stocks and bonds earlier in the week. Angell’s comments seemed to reignite hopes for even lower interest rates in the months ahead, which could help guarantee that the economy will recover--the event Wall Street most wants to see.

Among the market highlights:

* The rush to industrial stocks--which had begun early this week--slowed somewhat as traders grew less certain about the recovery. Even so, many industrial issues posted strong gains.

Alcoa rose 1 to 69, Dupont added 1 1/2 to 50 1/2, GE gained 1 1/2 to 79 1/2, 3M jumped 1 1/2 to 98 1/8, and United Technologies soared 1 5/8 to 56 5/8.

Other industrial stock winners included Raytheon, up 1 5/8 to 88 3/4; PPG Industries, up 1 1/8 to 58 5/8; NACCO Industries, up 3 3/8 to 52 1/4; Varity Corp., up 7/8 to 16, and Furon, up 1/2 to 13 3/4.

* Computer-related companies, which would also benefit from a stronger economy, advanced again. Apple Computer jumped 2 to 64 3/4 after it reported better-than-expected first-quarter results, leading several analysts to repeat their buy ratings or raise earnings estimates on the company.

Elsewhere in the group, Compaq rose 1 1/8 to 33 3/4, Intel jumped 1 1/2 to 62 1/2, Adobe Systems gained 1 5/8 to 63 7/8, and software firm State of the Art added 3/4 to 12 3/4.

Among other tech issues, disk-drive maker Seagate Technology gained 7/8 to 13 5/8 after posting a strong quarterly profit. Other disk-drive stocks rising included Conner, up 1 1/4 to 20 5/8, and Micropolis, up 1 1/4 to 11 1/4.

* Transportation stocks didn’t share in investors’ enthusiasm for other economy-sensitive issues. UAL, parent of United Airlines, plunged 3 1/4 to 155 3/4. After the close the company said it will report its biggest-ever fourth-quarter loss.

Other losers included Southwest Air, off 1 5/8 to 36; Federal Express, off 1 5/8 to 44 1/8, and railroad Norfolk Southern, down 1 3/8 to 59 1/4.

* Health care stocks turned mixed after two days of severe profit taking. Syntex rebounded 1 3/4 to 51 1/2, Bristol-Myers added 1 3/4 to 85 1/2, and Genzyme gained 2 to 56 1/4.

Still falling were Lilly, down 1 1/2 to 80 5/8; Gensia Pharmaceuticals, off 1 to 57 3/4, and U.S. Healthcare, down 1 5/8 to 46 5/8. Diagnostic-equipment firm Diasonics plunged 3 3/4 to 19 5/8 after posting a nearly flat fourth-quarter operating profit.

* A new biotech issue showed that investors still are hungry for the stocks. Amylin Pharmaceuticals of San Diego went public at 14 a share and rocketed to 20 3/4. The firm is working on diabetes treatments.

* In the small-stock market, the NASDAQ composite index slipped 0.49 point to 626.85. But investors continued to run after some small stocks, including hair-care products firm DEP, up 1 1/8 to 15 1/4; chemical firm American Pacific, up 2 3/4 to 22 3/4, and waste-management firm American Ecology, up 3/4 to 22.

Overseas, prices in Tokyo closed at their lowest level since October, 1990, as the gloom over the Japanese market thickened again. The 225-issue Nikkei average lost 290.82 points, closing at 21,321.37.

Prices finished lower on London’s Stock Exchange on concern about whether the British economy is recovering. The Financial Times 100-share average dipped 4.9 points to 2,536.7.

In Frankfurt, the 30-share DAX average rose 4.65 points to 1,670.99.

Credit

Treasury bond yields fell, driven down in part by the decline in national consumer confidence reported by the University of Michigan, said Kevin Flanagan, a money market economist at Dean Witter Reynolds.

The price of the Treasury’s key 30-year bond rose 5/8 point, or $6.25 per face amount. Its yield, which falls as the price rises, sank to 7.61% from 7.66% Thursday.

The dismal consumer confidence number--and comments by Federal Reserve Gov. Wayne Angell--suggested that another round of interest-rate cuts could be on the horizon. At the very least, the day’s reports indicated that no sustained rise in rates would be possible soon because the economy remains too weak.

Bond yields had been inching higher in recent days on worries about a turnaround in market interest rates.

The federal funds rate, the interest on overnight loans between banks, was at 2.50%, down from 3.938% Thursday.

Currency

The dollar plummeted against other currencies, depressed by Federal Reserve intervention in the market and by disappointment over U.S. economic reports.

Besides the consumer confidence report, traders found reasons to be pessimistic about the U.S. economy in the November trade deficit report, which showed a sharp decline in imports.

In New York, the dollar tumbled to 1.592 German marks from Thursday’s 1.617.

The dollar also skidded to 124.55 Japanese yen from 128.22.

The British pound jumped more than 3 cents against the dollar, climbing to $1.796 from $1.763.

Commodities

The prospect of reduced soybean plantings this spring prompted strong advances in bean futures prices on the Chicago Board of Trade. Wheat futures also posted sizable gains, but corn was mostly weaker.

A report by a private forecaster estimated that farmers will plant 57.8 million acres in soybeans, which would be 2 million or so fewer than last season. The November bean contract gained as much as 11 cents a bushel during the session.

Oil and gasoline futures gained on the New York Mercantile Exchange, with light, sweet crude for delivery in February rising 25 cents to $19.16 a barrel.

On the Comex in New York, silver for March delivery lost 4.8 cents to $4.29 an ounce after soaring Thursday on hopes for a stronger economy. February gold was $2.50 lower at $354.50 an ounce.