Dow Off 19.11 After Early Rally Fades; Stocks Mixed

Wall Street’s blue chip stocks closed lower Friday despite firmer dollar and bond markets, but most other shares in the broader market held onto minor gains.

The Dow Jones index of 30 industrials, up about 10 points in early trading, closed with a loss of 19.11 at 2,291.57. That trimmed the average’s gain for the holiday-shortened week to 48.37 points.

Volume on the New York Stock Exchange totaled 153.50 million shares, against 153.77 million in the previous session.

Before the market opened, the Commerce Department reported that the index of leading economic indicators fell 0.6% last month.

That larger-than-expected drop in the index, which is designed to detect future trends in the economy, was interpreted as a signal that business activity remains sluggish.

The leading indicators report met with a warm response in the credit markets. The Treasury’s key 30-year bond gained 3/4 point, or $7.50 for every $1,000 in face value. Its yield, which moves inversely to the bond’s price, dropped to 8.65% from 8.70% on Thursday.

But the stock market’s response was less enthusiastic, perhaps because of the negative implications of the figures for corporate earnings prospects.

Allegis fell 1 to 86 1/2 and led the NYSE active list on turnover of more than 4.8 million shares. The stock jumped 8 1/2 points on Thursday, when the company announced a recapitalization plan that would include a $60-a-share distribution to shareholders.

Lockheed dropped 3 1/8 to 50 5/8. Analysts quoted in the Wall Street Journal took a skeptical view of recent takeover rumors involving the company.

Morse Shoe jumped 3 to 42 5/8. The company said it has received several takeover proposals.

In the bond market, prices continued to edge higher Friday in quiet trading, extending a rally that began in the previous session.

In the secondary market for Treasury bonds, prices of short-term governments rose between 3/32 point and 5/32 point, intermediate maturities were up between 7/32 point and 1/2 point and long-term issues rose 11/16 point.

In corporate trading, industrials rose 3/8 point and utilities 5/8.

Among tax-exempt municipal bonds, general obligations rose point and revenue bonds were up a point in light trading.

Yields on three-month Treasury bills were up 7 basis points to 5.69%.

The federal funds rate, the interest on overnight loans between banks, traded at 6.563%, down from 6.688% on Thursday.