Dow Falls 1.33 as Most Market Indexes Climb

A continued tailspin by airline issues and an extended retreat among blue-chip stocks clashed with widespread gains elsewhere on Wall Street, producing another mixed performance in the stock market Friday.

“Most broad markets are marching forward while the Dow Jones (industrials average) dawdles,” said Robert Stovall, an analyst at Dean Witter Reynolds Inc.

For example, more than three stocks rose in price for every two that fell on the New York Stock Exchange, and the NYSE’s composite index of all its listed common stocks rose 0.29 to 99.04.

Wilshire Associates’ 5,000 equity index, the market value of 5,000 NYSE, American Stock Exchange and over-the-counter issues, was up $5.7 billion from Thursday at nearly $1.76 trillion. The index closed at 1,757.183, up 5.713.

But even as those broad indexes continued to roll up gains, the Dow Jones average of 30 industrials fell for a fourth straight day, and transportation issues continued to suffer from airline fare-war jitters.

The Dow Jones industrials, down 1.99 points Thursday, slipped another 1.33 to 1,227.36. The blue-chip average still ended the week with a gain of 9.27 points, thanks to a 16.45-point rise Monday that had capped a nearly 50-point surge from Jan. 7 to 14.

Meanwhile, the Dow Jones average of 20 transportation issues, down 10.52 points Thursday, tumbled another 6.98 to 577.72.

A sell-off in airline issues dominated Thursday’s mixed showing in the stock market, a slide attributed to American Airlines’ announcement of a broad fare-discount program that was quickly matched by many competitors.

Although heavy restrictions, including unusual penalty provisions, apply to the new fare cuts, the development was viewed with concern by some traders who were hoping for an end to fare wars and a return to profitability among airlines.

The selling, which also spilled over to airline manufacturers, continued Friday.

AMR, the parent of American, was the most active issue on the NYSE, down 1 3/8 at 33 7/8 in trading of more than 2.4 million shares.

Among other actively traded aviation issues, UAL was off 2 1/8 at 42 7/8, Delta Air Lines slid 1 5/8 to 41 3/8 and Boeing dropped 1 3/4 to 56.

Lew Smith, an analyst at Bear, Stearns & Co., said airline issues had been leading the market for much of the last three months and were vulnerable. Falling oil prices had helped airline issues earlier by raising hopes of improved profit margins as fuel expenses declined.

As for the market’s split personality, traders are trying to decide if the sharp gains of the previous week “mean a change to a bullish trend or a mini rally that looked good for a few days or a week and just faded away,” said Robert Colby, an analyst at Smith Barney, Harris Upham & Co. Inc.

Among encouraging economic developments, the Commerce Department said Friday that Americans’ personal income rose 0.5% in December and that the 6.8% increase for all of last year was the sharpest gain in two decades.

One of the day’s big winners was C.H.B. Foods, which climbed 4 1/2 to 13 3/4 on the American Stock Exchange after agreeing to be acquired by Hermes Investment for $16 a share.

International Business Machines, off on Thursday after reporting a 16.6% rise in fourth-quarter profit, gained 1/2 on Friday to 124 1/8 on the NYSE.

Aluminum Co. of America, which reported a fourth-quarter loss, fell 2 1/8 to 36 3/4.

Big Board volume slipped to 104.72 million shares from 113.55 million Thursday.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 122.82 million shares.

Standard & Poor’s index of 400 industrials rose 0.71 to 191.25, and S&P;’s 500-stock composite index was up 0.59 at 171.32.

At the American Stock Exchange, the market-value index was up 1.04 at 211.09.

The NASDAQ composite index for the over-the-counter market closed at 263.05, up 1.89.

Large blocks of 10,000 or more shares traded on the NYSE totaled 2,119, compared to 2,328 on Thursday.

Bond prices were mixed in light trading, with longer governments falling, corporate issues unchanged and tax-exempts rising in the wake of a modest rally in the previous session.

In the secondary market for Treasury bonds, prices of short-term governments were unchanged, intermediate maturities fell as much as point and long-term issues were down 7/32 point, according to the investment firm of Salomon Bros. Inc.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

In corporate trading, industrials and utilities were unchanged.

Among tax-exempt municipal bonds, general obligations rose 1/2 point and dollar bonds were up point.

Yields on three-month Treasury bills feel one basis point to 7.73%. Six-month bills fell 2 basis points to 7.94% and one-year bills were unchanged at 8.30%. A basis point is one-hundredth of a percentage point.

Yields on 30-year Treasury bonds rose to 11.53% from 11.50% late Thursday.

The federal funds rate, the interest on overnight loans between banks, traded at 8%, down from 8.3125% late Thursday.