Dow Chases the 2,600 Mark but Closes Off 2.23 : Oil, Precious Metals Fall as Persian Gulf Area Remains Calm

Stock prices finished mixed Friday after investors took profits and pulled the Dow Jones industrial average back from its first foray past 2,600. Trading was heavy.

The Dow, which pierced 2,600 in mid-afternoon trading Friday, slipped 2.23 from Thursday’s record high and closed at 2,592.00.

Broad market indexes scored new highs. The NYSE index rose 0.50 to 180.87 as Standard & Poor’s 500-stock index climbed 0.91 to 323.00, toppling day-old records. Meanwhile, bond prices rose modestly as oil and precious metals prices fell and calm prevailed in the Persian Gulf.

Larry Wachtel, analyst at Prudential-Bache Securities, said profit-taking typically sets in when the Dow moves above another century mark.

“We saw selling as the Dow neared 2,600 but it dried up by early afternoon,” said Tom Gallagher, a managing director in charge of capital commitment at Oppenheimer & Co. Bonds, which had slipped on news of unexpected strength in July employment, also moved higher, giving equities some support, he said.

Recent Breakthrough

The index only surpassed 2,500 less than two weeks ago and has risen nearly 700 points since the beginning of the year.

The Labor Department’s report that civilian unemployment dropped to a decade low of 6% in July helped the market because it implied the economy is strengthening and will encourage foreigners to continue buying stocks, strategists said. The higher dollar also played a role.

Gainers outnumbered losers by more than an 8-to-7 margin in composite New York Stock Exchange trading, with 880 up, 727 down and 391 unchanged. Big Board volume totaled 212.66 million compared to 191.95 million the previous session.

Technology-related stocks gained again after leading the rally Thursday. IBM rose 1 3/8 to 164 3/8 and Digital Equipment was up 1 3/4 to 170 7/8.

Singer jumped 4 5/8 to 51 1/2 after a group led by financier T. Boone Pickens said it was seeking government clearance to purchase up to 15% of the company. Ford Motor fell 1 1/8 to 103 5/8 after the auto maker said it would match General Motors’ 1.9%-financing offer announced earlier in the week. GM rose to 86 7/8.

The Treasury’s closely watched 30-year issue rose about 1/2 point. Its yield slipped to 8.90% from 8.95% Thursday but was virtually unchanged from last week’s closing.

Corporate and municipal bond prices rose.

In the secondary market for Treasury bonds, prices of short-term government bonds slipped 1/32 point, but intermediate maturities edged up 3/32 point and and 20-year issues rose 6/32 point, according to the investment firm Salomon Bros. Inc.

In corporate trading, industrials and utilities rose 1/2 point in moderate trading, Salomon Bros. said.

Among tax-exempt municipal bonds, general obligations rose point and revenue bonds were up 3/8 point, Salomon Bros. said. Trading was light.

Yields on three-month Treasury bills rose 12 basis points to 5.85%. Six-month bills rose 5 basis points to 6.08% and one-year bills gained 6 basis points at 6.51%

The federal funds rate, the interest on overnight loans between banks, slipped to 6.50% from 6.56% Thursday.