Jobless Data Depresses Stock Prices : Dow Index Drops 9.20 as Inflation Concern Flares Up

Stock prices were dragged lower Friday by heightened inflation fears after the government reported that U.S. unemployment dropped to a 15-year low last month.

The Dow Jones index of 30 industrials dropped 9.29 to 2,282.14, reducing its gain for the week to 7.85 points.

Declining issues outnumbered advances by about 4 to 3 in nationwide trading of New York Stock Exchange-listed issues, with Big Board volume edging up to 146.83 million shares from 143.36 million in the previous session.

The Labor Department reported that the civilian unemployment rate fell to 5.1%, a 15-year low, in February from 5.4% the month before.

The report also showed an increase of 289,000 in non-farm payroll employment, topping most advance estimates.

The report indicates that the expansion is picking up steam and that the Federal Reserve may soon tighten credit to wring inflation out of the economy, analysts said.

Wall Street had been anxiously awaiting the report all week, hoping for new evidence that economic growth was slowing, taking upward pressure off inflation and interest rates.

So the figures were poorly received in both the bond and stock markets.

However, most of the selling hit the stock market early in the day, when the Dow Jones industrials’ loss approached 20 points.

Brokers said the market’s partial recovery in late trading was encouraged by a feeling that the latest data might not prompt any immediate further credit-tightening moves from the Federal Reserve.

Losers among the blue chips included International Business Machines, down 3/8 at 118 1/4; General Electric, down 1/2 at 45; General Motors, down 3/4 at 84 3/4, and American Express, down 5/8 at 30.

Upjohn dropped 1/8 to 29 1/4 in active trading after losing 2 1/4 points Thursday. Responding to an analyst’s report, the company said it was too soon to gauge the effect of new prescription procedures in New York State on sales of two Upjohn tranquilizers.

Warner Communications climbed 1 7/8 to 49 and Time Inc. rose 3 1/2 to 115 3/4. There was conjecture on Wall Street that either or both companies might have opened themselves up as prospective takeover targets with their announcement last weekend of plans to merge.

The Wilshire index of 5,000 equities closed at 2,900.399, down 8.787.

The NYSE’s composite index of all its listed common stocks dropped 0.51 to 164.85.

Standard & Poor’s industrial index fell 1.26 to 338.17, and S&P;’s 500-stock composite index was down 1.26 at 338.17.

The NASDAQ composite index for the over-the-counter market rose 0.23 to 405.90. At the American Stock Exchange, the market-value index closed at 328.92, down 0.44.

In Japan, stocks edged higher in late trading Friday, as program buying helped the market recover from earlier declines. The Nikkei 225-share index rose 45.33 to 31,701.78, ending the week 298.22 points lower.

Share prices also closed higher in London, shaking off the depressing influence of early losses on Wall Street, as buying interest emerged at the beginning of a new trading account during which Britain’s fiscal 1990 budget is to be presented. The Financial Times 100-share index finished 9.3 higher at 2,085.2.