Dow Up 19 to Still Another Record Close : Index Finishes Week With 51-Point Gain; Bonds Also Advance

The stock market put the finishing touches on its best week so far in 1986 with a strong gain Friday, lifting the popular averages to record highs for the third consecutive session.

The bond market also wound up a powerful weeklong rally on a rising note.

Analysts said favorable inflation news, weakness in oil prices and falling interest rates kept stock traders in an enthusiastic buying mood.

The Dow Jones average of 30 industrials jumped 19.38 to 1,664.45, stretching its gain for the week to 51.03 points. That stood as the average’s best weekly showing since it climbed 58.04 points last Dec. 9-13. Volume on the New York Stock Exchange reached 155.59 million shares, up from 136.49 million Thursday.

Johnson & Johnson led the active list, down 4 at 47 3/4 on volume of more than 9 million shares. Johnson & Johnson and the Food and Drug Administration issued warnings late Thursday against using the company’s Tylenol pain reliever in capsule form, after two instances in which bottles were found containing tainted capsules.

Gainers among the blue chips included American Express, up 2 3/4 at 62; International Business Machines, up 5/8 at 156; General Electric, up 1 1/2 at 74 7/8, and Procter & Gamble, up 2 1/8 at 68 3/8.

Mortgage and savings and loan stocks scored notable gains, responding to the latest declines in interest rates. Great Western Financial rose 1 7/8 to 43 3/8; Columbia Savings & Loan climbed 2 to 22 3/8; Financial Corp. of Santa Barbara rose 1 3/8 to 11, and Federal National Mortgage was up 3/4 to 30 1/8.

In the overall tally on the Big Board, advancing issues outnumbered declines by more than two to one. Large blocks of 10,000 or more shares traded on the NYSE totaled 3,116, compared to 2,693 Thursday.

In the credit markets Friday, prices of long-term government bonds, which move in the opposite direction from interest rates, showed gains ranging from $10 to $15 for every $1,000 in face value.

In the secondary market for Treasury bonds, prices of short-term governments rose from 1/8 point to point, intermediate maturities rose between 7/32 point and 3/4 point and long-term issues jumped 1 points to 1 1/2 points, according to Salomon Bros.

In corporate trading, industrials gained 7/8 point in moderate dealings while utilities also climbed 7/8 point but in lighter activity.

Among tax-exempt municipal bonds, revenue bonds rose 3/4 point and general obligations were up 3/8 point. Activity was moderate.

Yields on three-month Treasury bills fell six basis points to 7.02%. Six-month bills slid seven basis points to 7.10% and one-year bills were down nine at 7.08%. A basis point is one-hundredth of a percentage point.

The return on the 30-year Treasury bond, at 8.95%, was down from 9.06% late Thursday and was the lowest yield on 30-year bonds since July, 1979.

The federal funds rate, the interest on overnight loans between banks, traded at 7.563%, compared to 7.75% late Thursday.