Dow Up 17 but Leaves Broad Market Behind

Blue chip stocks closed higher today but the broader market was left behind in a roller-coaster session dominated by uncertainties over the Middle East and the economy.

The Dow Jones industrial average closed up 17.82 points at 2,448.02.

But the broader market was less bullish. Declining issues outnumbered advancers by a margin of about 9 to 7 on the New York Stock Exchange, with 663 up, 821 down and 468 unchanged.

Big Board volume was a moderate 153.45 million shares.

Analysts said selective buying of shares in large companies boosted the Dow, but the rest of the market was depressed by continuing tensions in the Middle East and worries about the economy.

Stocks had been lower for much of the day following the release of third-quarter gross national product figures. The Commerce Department said the economy grew at an annual rate of 1.8% during the July-September period, a stronger than expected showing.

Analysts said Wall Street was not impressed by the figures, since much of the increase was due to consumer spending that was in turn boosted by higher sales of cars and trucks.

Larry Wachtel, an analyst with Prudential-Bache Securities Inc., said the stock market still believes the economy is heading for a recession, especially since consumer spending is expected to decline.

Analysts said there was also growing uneasiness about the Middle East that made many traders wary of the market.

In late afternoon, sellers left Wall Street and buyers moved back in, picking up some of the glamour stocks. But the overall market remained down as traders, mindful of the economic and Middle East pictures, had little incentive to buy most issues.

Earnings reports continued to affect stocks. Ford Motor led the NYSE most active list, tumbling 1 7/8 to 27 3/4 after announcing a third-quarter earnings drop.

But even companies with good earnings reports were suffering. Boeing, which announced a profit increase and positive outlook on Monday, was off 1 5/8 to 44 1/2 in early trading on concerns the aerospace firm might not be able to keep up its earnings pace.

Among blue chip issues, Philip Morris rose 3/4 to 46 5/8, General Electric rose 1 1/4 to 52 1/8, and IBM was up 3/8 to 106 3/8 by mid-afternoon.

Bond prices were lower in early trading on an inflationary rise in oil prices and concerns of oversupply in the government securities market.

The Treasury’s benchmark 30-year bond was down 3/16 point, or $1.88 per $1,000 in face amount, around midday. Its yield, which rises when prices fall, was up to 8.86% from 8.83% late Monday.

Economists said the credit markets too shrugged off the GNP report.

A GNP rise normally would depress bond prices because it would reduce the likelihood of the Federal Reserve lowering interest rates to stimulate the economy.