Dow Up 8.95; Late Rally Halts Skid : Index Falls to Nearly 2,000 Level Before Heading Higher

The stock market closed higher Friday, staging a late rally after the Dow Jones industrial index came very near sinking below the psychologically important 2,000 level.

The Dow index ended 8.95 points higher at 2,034.98 after falling to just above 2,000. Advancing issues outnumbered declines by about 7 to 5 on the New York Stock Exchange. Earlier, declines had predominated by as much as 2 to 1.

Big Board volume totaled 200.02 million shares, against 197.26 million in the previous session. The NYSE’s composite index closed up 0.53 at 149.45.

Buyers re-entered the market when the Dow halted its selloff at 2,001.8 in late afternoon and the market managed a 33-point rebound from that level.

“It has been a roller coaster session,” said Alfred Goldman, a St. Louis based analyst with A. G. Edwards & Sons. But the gain was not enough to keep a string of four consecutive weekly advances intact, and the market lost 22.88 points for the week.

Nevertheless, analysts said that after recovering from a 48-point loss Thursday, the market appears poised for a further advance.

The rout on Thursday followed an almost 200-point rise in four weeks that brought the index to its highest level since the October crash.

Stocks drew some support from falling interest rates in the credit markets, where prices of long-term Treasury bonds rose more than $5 for each $1,000 in face value.

The bond market got a lift from news of an unexpected 0.2% decline in the producer price index last month and a 0.6% rise in retail sales for the same period.

Hildegard Zagorski of Prudential-Bache Securities said the data were certainly better for the bond market. But she added they support the belief that the economy is running at a level likely to preclude the Federal Reserve from raising interest rates.

A big chunk of Friday’s activity came in the stock of MFS Intermediate Income Trust, which traded at 10 on turnover of more than 35 million shares after a 200-million-share initial offering at that price.

In foreign trading, share prices in Tokyo closed lower Friday after Wall Street’s loss Thursday, but brokers said the response to New York was subdued.

The Nikkei 225-share index fell 74.09 points to 25,543.73.

On the London Stock Exchange, the Financial Times 100-share index dropped 23 points to close at 1,811.6.