Stocks Post Small Rise; Dow Index Climbs 1.99

The stock market recorded a small gain Friday, getting a little more mileage out of its rally of the past two sessions.

But the pace of trading slowed in a session dominated by interest in takeover news and rumors.

The Dow Jones average of 30 industrials rose 1.99 to 1,265.68, bringing its gain for the week to 6.63 points.

Volume on the New York Stock Exchange tailed off to 86.22 million shares from 108.36 million Thursday.

Stocks had a strong bond market working in their favor for most of the week. Open-market interest rates have fallen sharply in the past few days.

But the reasons for those interest-rate declines--in particular, signs of a slowing economy--have produced some mixed feelings among market participants.

Interest Rates Decline

The government’s report Thursday of a surprise 1.9% drop in retail sales during March, for example, got a rousing welcome from bond traders.

While it helped send interest rates lower, however, the news also raised questions in many Wall Streeters’ minds about the outlook for corporate profits and dividends.

In Friday’s economic news, the Labor Department said the producer price index of finished goods rose 0.2% last month, maintaining a low level of upward pressure on consumer prices.

In the takeover spotlight, Uniroyal rose 1 to 20. The company said it was open to other offers after rejecting an $18-a-share takeover bid by investor Carl Icahn.

AMF, rumored in some quarters to be a possible acquisition target, climbed 1 to 20 3/8.

Unocal, which is fighting a takeover effort by a group led by T. Boone Pickens, chairman of Mesa Petroleum, was up 1 at 48 3/4.

CBS, another concern that has been the subject of much takeover talk, gained 3 to 103 3/4. Responding to rumors, the company said it had no impending plans to buy back some of its shares.

Gainers among the big-name computer and technology issues included International Business Machines, up 1 at 128, and Digital Equipment, up 1 1/8 at 107.

Eastman Kodak rose 1 3/8 to 68 1/8. The company plans a 50% stock dividend, which is tantamount to a 3-for-2 stock split.

The day’s most active issue was BAT Industries, listed on the American Stock Exchange. The stock gained to 4 1/2 as several large-block transactions pushed the volume in it to more than 9.7 million shares.

Advancing issues outnumbered declines by about seven to six on the Big Board. The exchange’s composite index gained 0.21 to 104.64.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 106.99 million shares.

Standard & Poor’s index of 400 industrials rose 0.38 to 201.10, and S&P;’s 500-stock composite index was up 0.35 at 180.54.

The NASDAQ composite index for the over-the-counter market advanced 0.51 to 280.63, while the Amex market-value index closed at 230.48, down 0.24.

The Wilshire index of 5,000 equities closed at 1,861.379, up 3.728.

Bond Prices Little Changed

Large blocks of 10,000 or more shares traded on the NYSE totaled 1,797, compared to 2,174 on Thursday.

In the credit markets, bond prices were little changed, pausing in the wake of a robust three-day advance.

The market showed little reaction to the government’s report that wholesale prices rose last month.

Bond prices had rallied sharply Thursday after the Commerce Department report on retail sales. Prices of some long-term issues rose by as much as 1 points, or $12.50 for every $1,000 in face value.

Bond-market participants appeared to read the retail-sales figures as a sign that the economic expansion is cooling off, something that could reduce upward pressure on interest rates.

In the secondary market for Treasury bonds, prices of short-term governments edged up 1/32 point, intermediate maturities rose 2/32 point and long-term issues were up 2/32 point.