Dow Gains 5.90 in Mixed, Active Market

The Dow Jones industrial average stretched its early-1987 winning streak to 11 sessions Friday, but the rest of the stock market settled for a mixed showing in continued heavy trading.

Analysts said profit taking slowed the momentum of the market’s recent runaway advance.

The Dow Jones index rose 5.90 to 2,076.63, posting its 10th straight record high. For the week, the average rang up a net gain of 70.72 points.

Volume on the New York Stock Exchange came to 218.39 million shares, down from Thursday’s record of 253.12 million but still the seventh largest total in exchange history.

The NYSE had its first 1-billion-share week ever, with a final total of 1.04 billion shares changing hands.

The Federal Reserve Board reported Friday morning that industrial production increased 0.5% in December. That provided fresh fuel for hopes that economic growth and corporate profits will improve at a faster pace in the months ahead.

But analysts said some traders evidently decided that the market had gone to extremes with the 174.78-point rise in the Dow over the first 10 sessions of 1987.

So Friday’s activity became a tug-of-war between latecomers eager to put money into stocks and sellers wanting to cash in their gains.

The Dow Jones average of 20 transportation stocks jumped 8.47 to 872.21, surpassing its previous peak reached last Dec. 4.

That came as cheery news to followers of the so-called Dow theory, who like to see market advances “confirmed” by new highs in both the industrial and transportation indicators.

RJR Nabisco rose 1 to 56 7/8. London-based Grand Metropolitan PLC agreed to buy the company’s Heublein subsidiary for about $1.2 billion in cash.

Among other actively traded blue chips, General Electric gained 1 to 94; American Express added 1/8 to 65 1/8; Exxon rose 1 1/8 to 78, and International Business Machines was unchanged at 120.

In the transportation sector, Pan Am led the active list and climbed 1/2 to 6, while AMR jumped 2 5/8 to 58 3/8. The two companies are reported to be planning talks toward a possible merger.

Other point-plus gainers among the airlines included UAL, up 1 7/8 at 57 5/8, and Delta Air Lines, up 1 3/4 at 53.

Declining issues outnumbered advances by about seven to four in the daily tally on the NYSE, with 591 up, 1,082 down and 337 unchanged.

The exchange’s composite index of all its listed common stocks edged up 0.12 to 152.21.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 255.79 million shares.

A total of 4,145 blocks of 10,000 or more shares traded on the NYSE, compared to 5,397 on Thursday.

Bond prices posted some modest gains Friday as the credit markets welcomed signs that the dollar is steadying after its recent plunge.

The key 30-year Treasury bond rose about 5/8 point, or $6.25 for each $1,000 in face amount, and its yield edged down to 7.33% from 7.38% late Thursday.

The federal funds rate, the interest on overnight loans between banks, traded at 5 15/16%, down from 6% late Thursday.