Dow Jumps 8 in Slowest Trading Session of Year

Stock prices put together a broad rally Friday as interest rates tumbled in the credit markets.

Bond prices also rose sharply after the government reported further employment weakness in the nation’s manufacturing sector.

Trading on the New York Stock Exchange set its slowest pace of the year as many market participants opted to take a long Independence Day weekend.

The Dow Jones average of 30 industrials climbed 8.06 to 1,334.45, closing out the week with a net loss of 1.01.

Volume on the NYSE came to 62.45 million shares, down from 98.41 million Wednesday and the lightest total since 46.70 million changed hands last Dec. 26.

Before the market opened, the Labor Department reported that the civilian unemployment rate held steady at 7.3% in June.

Of special interest to traders on Wall Street was accompanying data that showed slower than expected growth in business payrolls.

While lower rates are a plus for stocks, analysts said, the evidence of continued sluggishness in business activity also served to revive doubts about the outlook for corporate earnings. In any case, brokers said it was difficult to get a true reading of the market’s mood on a day of such light activity. They voiced the view that a better test would come early next week.

Johnson Controls led the active list, up 3/4 at 44 in trading that included a 1.77-million-share block at 45 in the over-the-counter market. The company said it bought the block of stock from companies controlled by Victor Posner.

Among actively traded blue chips, American Telephone & Telegraph rose to 24, Exxon 7/8 to 52 3/4 and Allied Corp. 1 1/8 to 44.

Securities industry issues were strong. Merrill Lynch added 5/8 to 34 1/8, Phibro-Salomon 7/8 to 44 3/4, First Boston 2 to 88 and Paine Webber 3/4 to 35 3/8.

MCA, a sharp gainer earlier in the week on takeover rumors, fell back 3 3/4 to 64.

In the daily tally on the Big Board, nearly three issues rose in price for every one that declined. The exchange’s composite index of all its listed common stocks rose 0.65 to a new high of 111.67.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 74.45 million shares.

Fewer Block Trades

Large blocks of 10,000 or more shares traded on the NYSE totaled 1,187, compared to 1,845 on Wednesday.

The Wilshire index of 5,000 equities closed at 1,988.291, up 11.045.

Standard & Poor’s index of 400 industrials gained 1.15 to 212.27, and S&P;’s 500-stock composite index was up 1.07 at 192.52.

The NASDAQ composite index for the over-the-counter market added 1.25 to 298.58. At the American Stock Exchange, the market-value index closed at 232.69, up 1.41.

While the Labor Department said that the overall jobless rate held steady in June, manufacturing employment fell by 45,000.

The credit markets interpreted the manufacturing employment decline as giving the Federal Reserve more cause for easing its grip on credit, a move that could send interest rates lower.

However, that speculation was tempered in late trading after the Fed reported an unexpectedly large $2.6-billion increase in the nation’s basic money supply in late June--keeping the supply well above the Fed’s own anti-inflation growth targets.

Bond Prices Fell

As a result, bond prices fell below their best levels of the day and interest rates narrowed their losses.

Still, in the secondary market for Treasury bonds, prices of short-term governments rose nearly 1/2 point from Wednesday, according to the investment firm of Salomon Bros.

Prices of intermediate and long maturities climbed between 1 and 1 3/4 points after having been up more than 2 points early in the session, Salomon Bros. said. The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.