Bond Prices Pull Dow Up 32.92 Points

Wall Street stocks closed sharply higher today, buoyed by rising bond prices, lower oil prices and bargain-hunting by investors.

The Dow Jones industrial average rose 32.92 points to end the week at 2,398.02, cutting its loss for the week to 112.62 points.

The rally reversed a three-day trend in which the 30-share average fell more than 150 points.

Volume on the New York Stock Exchange was a heavy 187.94 million shares, against 180.06 million Thursday. Leading issues outgained losers by 3 to 2.

Investors were encouraged by Treasury bond prices that rose by more than a point with yields falling to around 8.97%, and by oil prices that dipped below $40 a barrel.

Despite the technical rally, brokers said the economic and financial news offered little evidence of lasting relief from the recession worries that have plagued the market for several months.

Bond prices rose in early trading today amid further negative reports on the nation’s economy and unconfirmed reports that Iraqi President Saddam Hussein said he may pull out of Kuwait.

The Treasury’s benchmark 30-year bond, which plunged $9, was up $4.43 per $1,000 in face value at midday. Its yield, which falls when prices rise, fell to 8.97% from 9.06% late Thursday.

The Labor Department reported that the wholesale price index of finished goods jumped 1.6% in September, propelled by surging energy prices.

Negative news had been widely anticipated from the index, which provides a measure of inflationary pressures in the distribution pipelines of the economy. Still, brokers said, the figure served as a damper on whatever hopes existed for a relaxation of the Federal Reserve’s credit policy any time soon.

Separately, the Commerce Department said retail sales jumped 1.1% in September but cautioned that the sales were artificially inflated by the soaring cost of gasoline.

Analysts said the inflation outbreak, coupled with a relatively positive report on retail sales, deepens the dilemma facing the Federal Reserve. The central bank has been under pressure to lower interest rates to spur the economy.

Any indication the Fed might ease rates tends to spur the bond market, since lower interest rates translate to higher prices for fixed-income securities.