Stocks Close Mixed on Late Buying; Dow Up 2

Stocks were mixed in sluggish trading Thursday as investors tried to sort out several economic and technical developments.

Auto, telephone and drug issues generally moved ahead, but oil and airline stocks weakened.

The Dow Jones average of 30 industrials rose 2.35 to 1,299.73 thanks to a late buying flurry; the measure was off 5 1/2 points an hour before the closing bell.

But declines slightly outpaced advances among all New York Stock Exchange-listed issues. Big Board volume slowed to 87.50 million shares from 108.27 million Wednesday.

Wall Street began the day worrying about whether the recent slide in interest rates might be over.

The Commerce Department estimated that the economy, as measured by the gross national product, is expanding at an annual rate of 3.1% in the current quarter, up from a revised 0.3% rate in the first quarter. The first-quarter gain originally was reported as 0.7%.

The latest figure, which is also subject to further revision once the quarter is over, was at the high end of economists’ expectations. Credit analysts quickly speculated that the Federal Reserve would find the economy sufficiently strong that it need not drive interest rates still lower.

In addition, the Fed reported after the market closed that the basic U.S. money supply surged $4.8 billion in the week ended June 10. Analysts said the rapid money growth was a further reason why the central bank was unlikely to ease credit conditions in the near future.

Inflation, meanwhile, appeared to stay in check last month. The Labor Department said consumer prices edged up only 0.2% in May after climbing 0.4% in April.

Technical factors also weighed on Wall Street. On Friday, several stock-index futures and options contracts will expire, and, on previous expiration dates, prices have fluctuated wildly near the final bell as traders closed out their positions in the contracts and in the stocks underlying those contracts.

At the same time, many professional money managers are continuing to juggle the stocks in their portfolios before the second quarter ends.

International Business Machines closed at 118 3/4, off 5/8, after having tumbled to 117 3/8--its lowest point so far this year--earlier in the day.

Elsewhere in the computer sector, Digital Equipment skidded 1 7/8 to 87 and Burroughs lost to 56. But Data General climbed 1 to 34 3/8 and Computervision was up 3/4 at 13 1/8.

Northrop dropped 1 1/2 to 51 in heavy trading after General Dynamics cut the price of a military jet that competes against Northrop aircraft. General Dynamics gained to 74.

Also on the NYSE’s active list, American Telephone & Telegraph rose 1/8 to 24, Unocal gained 1 to 29 1/2, Sony lost 1/2 to 15 1/8 and Exxon slipped 1/8 to 51 3/4.

National Semiconductor edged up 1/8 to 11 1/2 despite posting a $2.7-million loss for its fiscal fourth quarter.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 107.23 million shares.

Large blocks of 10,000 or more shares traded on the NYSE totaled 1,756, compared to 1,096 on Wednesday.

The NYSE’s composite index inched up 0.01 to 108.46.

The Wilshire index of 5,000 equities closed at 1,928.083, up 0.113.

Standard & Poor’s index of 400 industrials rose 0.11 to 205.73, and S&P;’s 500-stock composite index gained 0.10 to 186.73.

At the American Stock Exchange, the market-value index lost 0.41 to 224.38.

The NASDAQ composite index for the over-the-counter market closed at 287.37, down 0.78.

Bond prices tumbled and short-term interest rates rose.

In the secondary market for Treasury bonds, prices of short-term governments fell 11/32 point, intermediate maturities were off between 1/2 point and a full point and long-term issues were down as much as 1 1/2 points.