Dow Closes Up 12.83 on Ambiguous Report

The stock market posted a moderate gain today after what analysts described as an ambiguous report on employment.

The Dow Jones industrial average rose 12.83 points to 2,304.80. Declines led advances by 882 to 549 on moderate volume of 157 million shares on the New York Stock Exchange.

The Labor Department report that the unemployment rate declined to 5% in March surprised analysts, who had been looking for a small increase.

By contrast, the data also showed a smaller-than-expected gain of 180,000 in non-farm payroll employment, providing some support for the view that the economy has been slowing since early this year.

Brokers said the overall result was something of a letdown, because many investors had been hoping for a more clear-cut signal that pressures were abating on inflation and interest rates.

But traders also apparently interpreted the data as positive for technology stocks, which have been depressed lately by earnings worries and concern about a possible business slump.

Bond Prices Seesaw

Treasury bond prices seesawed in early trading today, moving sharply higher immediately after the Labor Department issued its employment report, then dropping as analysts examined the report more closely.

The non-farm payroll figure of 180,000 new jobs was good news for the credit markets, which had been expecting an increase of about 220,000 jobs, indicating a possible slowing of the economy.

But when traders examined the employment report more closely, their fears of tighter credit were heightened and they began to sell, said William V. Sullivan, director of money market research for Dean Witter Reynold Inc.

Bellwether Swings

But prices began to move upward again as the market regained some composure, Sullivan said, noting that the Treasury’s bellwether 30-year bond had swung in a 1-point range during morning trading.

The 30-year bond was down 11/32 point, or more than $3.40 per $1,000 in face amount, at midday while its yield rose to 9.07% from 9.01% late Thursday.

Prices of short-term governments fell 1/32 point, intermediate maturities were off 3/32 point and long-term issues fell 11/32 point, according to Telerate Inc., a financial data service.

The movement of a point equals a $10 change in the price of a bond with a $1,000 face value.

In corporate trading, industrials fell slightly. Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, slipped 0.20 to 300.08.

Yields on three-month Treasury bills fell to 9.12% as the discount dropped 4 basis points to 8.81%. Yields on six-month bills rose to 9.27% as the discount rose 4 basis points to 8.75%. Yields on the previously issued one-year bills rose to 9.50% as the discount was unchanged at 8.75%.

A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, which is paid at maturity.

The federal funds rate, the interest on overnight loans between banks, traded at 9 13/16%, unchanged from late Thursday.