Dow Rises 5.94 for Record 1-Week Increase of 119.88

The stock market closed mixed today, pausing after the rally that carried it through the last four sessions.

The Dow Jones average of 30 industrials rose 5.94 to 2,689.14, stretching its gain for the week to a record 119.88 points.

The previous largest weekly point gain for the average was 114.86 May 31-June 3 of 1988.

Declining issues outnumbered advances by about 6 to 5 on the New York Stock Exchange, with 662 up, 809 down and 477 unchanged.

Big Board volume totaled 164.83 million shares, against 198.12 million in the previous session.

The NYSE’s composite index slipped .05 to 192.12.

Analysts said optimism about the takeover outlook, after slowly reviving in recent days, suffered a new setback when British Airways said it would not take part in any effort to revive a buyout deal for UAL Corp.

Brokers also noted that traders were proceeding cautiously as they waited for the passing of another monthly “witching hour” involving the last trading of expiring stock options and stock index futures contracts.

As it turned out, the occasion seemed to work in the market’s favor by producing some buying of blue chips near the close.

At the same time, some observers said the market was still feeling the positive effects of the government report Thursday on the consumer price index.

Government bond prices headed higher and interest rates moved lower early today as positive sentiment lingered in the credit markets after Thursday’s favorable inflation report.

The 30-year Treasury bond added another 11/32 point, or nearly $3.75 for each $1,000 in face amount, by late this morning.

The benchmark bond had gained nearly a full point, or $10 per $1,000 in bond value, when the market rallied Thursday in response to news of an unexpectedly modest rise in consumer prices.

Economist Jack Barbanel of the investment firm First Global Managers said that apart from the 0.2% rise in September’s consumer price index, there were no developments to account for the market’s strength.

Credit markets usually welcome evidence of moderating inflation because rising prices sap value from fixed-income investments.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8 11/16%, the same as Thursday’s late rate.