FINANCIAL MARKETS : Dow Rebounds 16.32 as Recession Jitters Ease

The stock market turned upward Wednesday, recovering much of its losses in the previous session.

The Dow Jones index of 30 industrials, down 19.54 on Tuesday, climbed 16.32 to 2,657.44.

Advancing issues outnumbered declines by about 5 to 4 in nationwide trading of New York Stock Exchange-listed stocks, with 866 up, 680 down and 460 unchanged.

Volume on the floor of the Big Board came to 181.76 million shares, down from 225.28 million Tuesday. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 217.63 million shares.

The market’s unsettled showing Tuesday was attributed partly to concern that the slowing of the economy might lead to something worse than the “soft landing” many economists have been predicting.

Analysts said those worries might be eased, however, by a series of economic reports over the remainder of the week.

The Commerce Department is due to report today on the index of leading economic indicators. On Friday, data is scheduled to be released on the employment situation.

Advance estimates on Wall Street call for a decline of 0.3 percentage points or less in the leading indicators and an increase of something more than 150,000 in non-farm payroll employment for July.

Avon Products rose 1 to 36 1/2 in active trading. Investor Irwin L. Jacobs said he offered to acquire the company for $41 a share in cash, subject to negotiation of a definitive takeover agreement.

Walt Disney Co. gained 4 7/8 to 114 5/8, bolstered by word of the firm’s plans to double the capacity of its new theme park in Orlando, Fla.

Home Shopping Network, traded on the American Stock Exchange, fell 1 to 3 3/8. A jury awarded GTE Corp. $100 million in libel damages in a legal dispute between the companies.

The Wilshire index of 5,000 equities closed at 3,367.221, up 6.980.

Large blocks of 10,000 or more shares traded on the NYSE totaled 3,887, compared to 4,522 on Tuesday.

Stock prices on the Tokyo Stock Exchange closed slightly higher in selective buying as the key Nikkei average briefly touched the 35,000-point level for the first time.

The Nikkei average of 225 selected issues, which eased 55.41 points Tuesday, gained 0.88 to close at 34,899.34.

In London, the Financial Times-Stock Exchange index of 100 leading shares fell 4.7 points to 2,292.3.

Credit

Bond prices edged lower after two government reports put a mild scare into the inflation-wary market.

The Treasury’s benchmark 30-year bond fell 1/32 point, or about 31 cents per $1,000 in face value. Its yield remained at about 7.84%.

Apart from the day’s ordinary dealings, bond traders were let down when Congress did not raise the federal debt ceiling. The Treasury Department will not be able to conduct a $39.5-billion borrowing operation next week unless Congress lifts the limit on borrowing.

The ceiling is certain to be lifted because otherwise the government would shut down. But until it is, primary dealers in government securities cannot begin when-issued trading on bonds that will be auctioned next week.

The federal funds rate, the interest on overnight loans between banks, traded at 8.875%, the same as late Tuesday.

Currency

The dollar gained against most major foreign currencies in subdued U.S. dealings after weakening on markets abroad.

Gold prices posted minor changes. On the Commodity Exchange in New York, gold for August delivery closed at $370.10 an ounce, down 70 cents from Tuesday’s settlement. Republic National Bank quoted bullion at $369.70 as of 4 p.m. in New York, 80 cents lower than Tuesday’s late bid.

In Tokyo, the dollar fell 0.45 yen to close at 136.20 yen.

Commodities

Futures trading in Chicago ground to a near halt as market players cleared the floors of the Chicago Board of Trade and the Chicago Mercantile Exchange ahead of a federal grand jury’s indictment of 46 commodities traders and brokers.

Traders in the world’s two largest futures exchanges left their markets early, anticipating the grand jury’s ruling after a 2 1/2-year probe of alleged fraud in Chicago’s futures pits.

Charges included racketeering, mail fraud, commodities fraud, the filing of false tax returns and lying to federal agents.

Chicago’s agriculture markets closed mixed, with less than full attention focused on market fundamentals, sources said.

CBOT soybeans closed lower. Improved crop conditions in the Midwest pressured the market throughout the session. Soybeans closed down, with the August contract off 4.5 cents at $6.09.

Nineteen soybeans traders were charged in Wednesday’s indictments.