Stock Prices Edge Higher in Slowest Trading Pace of Year; Dow Up 6.58

The stock market posted a slim gain Friday as trading volume withered to its lowest level of the year.

Analysts said stocks took some support from a mild run-up in bond prices, which sent yields on some fixed income issues a bit lower.

But they said the sluggish trading totals indicated that investors continue to play it safe while awaiting a clearer signal on the direction of the economy, inflation and interest rates.

“There have been some very selective areas that have been trying to pull ahead, but there is no conviction. The market has been in this holding pattern for most of this week,” said Charles Jensen, analyst for MKI Securities Corp.

The Dow Jones index of 30 industrials, which fell 15.82 on Thursday, rose 6.58 to 2,017.43. That left the market’s best known index with a gain of 1.43 points for the week.

Advancing issues outnumbered declines by about 7 to 6 in nationwide trading of New York Stock Exchange-listed stocks, with 725 issues up, 605 down and 601 unchanged.

Volume on the NYSE came to 89.24 million shares, down from 127.64 million on Thursday. That was the slowest trading level of 1988 and the lowest since 86.36 million shares were traded last Nov. 27, the day after Thanksgiving.

Nationwide, consolidated volume in NYSE-listed issues, including trading at regional exchanges and on the over-the-counter market, totaled 106.96 million shares.

Worries that inflation may be accelerating at a pace that would prompt the Federal Reserve to push interest rates higher have weighed on the market.

But the government reported Friday that personal income rose by 0.6% in July, a bit below expectations, while personal spending rose 0.5%.

Analysts said the report calmed worries that inflationary pressures were continuing to build.

The report sent bond prices mildly higher, reducing their yields slightly.

Nonetheless, Jensen said relatively high rates on fixed-income securities such as Treasury issues are giving investors appealing alternatives to stocks.

“No one wants to get out there and be aggressive. They can stay on the sidelines and generate some pretty nice yields without much risk,” he said.

Gene Jay Seagle, director of technical research at the brokerage firm Gruntal Financial Inc., said he thinks the slow trading indicates “a market that seems to feel the worst that can hit us has happened.”

“This is a very sold-out market,” he said. “There is so much pessimism and so much cash . . . that the chance is for a breakout on the upside.”

Northeast Utilities was the most active issue on the NYSE, rising 1/8 to 18 3/8. Friday was the deadline for shareholders to qualify for a quarterly dividend.

Primerica was up 2 3/8 at 30 1/8 on speculation that it may be a takeover target.

Macmillan rose 5/8 to 83 7/8. The company rejected as inadequate an $80-a-share takeover bid from Britain’s Robert Maxwell and said it may propose a sweetened restructuring plan.

Among other actively traded stocks, Exxon rose 1/2 to 46, Goodrich jumped 1 3/8 to 48 5/8 and Coca-Cola was up 5/8 at 39 3/4.

Large blocks of 10,000 or more shares traded on the NYSE totaled 1,812, compared to 2,361 Thursday.

The Wilshire index of 5,000 equities closed at 2,594.868, up 5.164. The NYSE composite index rose 0.30 to 147.24.

Standard & Poor’s industrial index rose 0.65 to 298.01, and S&P;’s 500-stock composite index was up 0.50 to 259.68.

At the American Stock Exchange, the market-value index rose 0.66 to 293.87. The NASDAQ composite index for the over-the-counter market closed at 374.43, up 0.39.

Thursday’s selling wave continued into Friday’s trading in Tokyo, where the Nikkei index lost 305.03 to 27,565.41.

Later in London, the Financial Times 100 stock index closed down 9.5 at 1,770.7 after a steep 37-point drop the day before.