Stocks Mostly Higher in Busy Day

Stock prices moved generally higher in a busy session Friday despite some late selling of blue chips.

However, the Dow Jones average of 30 industrials, up more than 14 points at midday, closed down 0.92 at 1,543.00. But several other, broad market measures posted solid gains.

Volume on the New York Stock Exchange stepped up to 170.27 million shares from 130.23 million on Thursday.

Analysts said the market showed no drastic effects from the so-called witching hour.

The term refers to the expiration of a set of options and futures on stock indexes, which effectively occurred as of Friday’s close. Last-minute maneuvering by professional traders involving these contracts and individual stocks has on occasion sparked some sudden swings in stock prices.

The Dow’s drop in late trading was attributed by some to selling by these traders. Observers also theorized that the decline in the blue chips could have come as other investors sold to get out of the professionals’ way.

Before the opening, the Commerce Department issued a “flash” estimate that the gross national product is growing at a 3.2% annual rate in the fourth quarter. At the same time, it revised its figure for the third quarter downward from 4.3% to 3%.

The Labor Department, meanwhile, said the consumer price index rose 0.6% last month.

Analysts said traders generally took the GNP figures as mildly encouraging and didn’t seem greatly concerned by the inflation data.

Among actively traded blue chips, International Business Machines rose 3/4 to 154 1/2 and American Express gained 1/8 to 52 3/4. But General Motors dropped 1 1/8 to 74.

A Wall Street Journal story said GM dealers had large inventories of unsold cars on their lots after a recent heavy production schedule by the company. Ford Motor dropped 1 3/8 to 57 3/8 and Chrysler was down 3/4 at 44 7/8.

Walt Disney Productions climbed 3 3/8 to 113 1/2. The company said the activity apparently came in response to its recent announcement of plans for a theme park in France.

J. P. Morgan led the active list, up 3/8 at 62 3/4. A 2-million-share block changed hands at 62 1/2.

In the overall tally on the Big Board, gainers outnumbered losers by nearly two to one. The exchange’s composite index added 0.56 to 121.31.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 197.54 million shares.

Large blocks of 10,000 or more shares traded on the NYSE totaled 3,080, compared to 2,577 on Thursday.

The Wilshire index of 5,000 equities closed at 2,159.209, up 9.157.

Standard & Poor’s index of 400 industrials rose 0.89 to 234.17, and S&P;’s 500-stock composite index was up 0.92 at 210.94.

The NASDAQ composite index for the over-the-counter market gained 0.45 to 323.12.

At the American Stock Exchange, the market value index closed at 244.11, up 0.44.

Bond prices registered overall gains, dominated by continuing speculation over the direction of interest rates Friday.

“Trading was very active and volatile as sentiment on an imminent discount-rate cut wavered,” said Geoffrey L. Kurinsky, an economist for Boston-based Technical Data Corp., a fixed-income analysis firm.

The discount rate is the interest rate the Federal Reserve Board charges on loans to commercial banks and savings institutions. There has been speculation, based on weakness in the economy, that the Fed would become more generous with credit and lower the rate--now 7.5%.

Some analysts believe the Fed has already loosened its grip on credit conditions to stir greater economic momentum and will take the additional step of cutting the discount rate.

“Prices soared at midday when traders decided the Fed had supplied reserves into the system, which often suggests . . . a first sign that it is going to lower interest rates,” Kurinsky said.

“The federal funds rate--the rate at which banks lend money to each other overnight--fell from 8% on the open market to 7.5% after lunch, assisted by the Fed’s injection of reserves.

“Then it (the market) crept up in the afternoon. As it crept up, traders became convinced there was not going to be an interest-rate cut, and the market sold off,” he said.

“Still, it managed to hang onto some significant gains,” Kurinsky said.

The federal funds rate closed at 8%, down from 8.125% late Thursday.