Auto Issues and IBM Pace Market Rally : Dow Climbs 11.87 to End Week With 11-Point Rise

Auto issues and International Business Machines shares set the pace as the stock market rallied in a relatively quiet session Friday.

The Dow Jones average of 30 industrials climbed 11.87 to 1,339.94, finishing the week with a net gain of 11.20 points.

Volume on the New York Stock Exchange came to 96.37 million shares, against 90.91 million Thursday.

As the day began, International Business Machines reported earnings of $2.40 a share for the third quarter, down from $2.60 in the comparable period last year.

The figure, which marked the third consecutive quarterly earnings decline for IBM, came in near the low end of analysts’ estimates.

Nevertheless, the market took the news in stride. Brokers said there had been so much concern in recent days about the computer giant’s earnings prospects that the actual figures apparently were greeted with a sense of relief.

IBM shares slipped briefly after the report, but then rebounded to 125 5/8, up 1 from Thursday’s close.

Ford, GM, Chrysler Gain

Brokers said there were mixed feelings about government reports that showed a 2.7% jump in retail sales and a 0.6% drop in producer prices of finished goods for September.

The sales report seemed to help the auto stocks, however. Ford Motor, which announced a dividend increase Thursday, climbed 1 to 46 3/4, General Motors 1 to 69 7/8 and Chrysler 7/8 to 38.

With the market responding well to IBM’s quarterly results, it was a day for bounces in other stocks depressed recently by earnings disappointments.

Motorola, which reported a $39-million loss for the third quarter, gained 3/4 to 31.

Hospital Corp. of America rose 1 1/8 to 31 1/8 and American Medical International 1 to 20 3/8.

Regional telephone issues also were strong. Nynex picked up 1 3/8 to 81 3/8, Bell Atlantic 1 to 87, Pacific Telesis 7/8 to 70 1/8, Ameritech 7/8 to 88 7/8 and Southwestern Bell 1/2 to 77 1/2.

In the bond market, prices were mixed and short-term interest rates were lower.

In the secondary market for Treasury bonds, prices of short-term governments were unchanged, intermediate maturities were mixed--with some off 3/32 point and others up 1/32 point--and long-term issues were off 3/32 point, according to the investment firm of Salomon Bros.