STOCKS : Dow Rises 3.46, but Economic Jitters Persist

Blue chips posted thin gains Friday, but investors remained worried that corporate earnings could be weak this quarter.

“It’s an earnings scare,” said Jim Schroeder, market analyst at MMS International.

The Dow Jones industrial average closed up 3.46 points at 2,858.91. Volume on the floor of the Big Board came to 160.89 million shares, down from 199.83 million in the previous session. For the week, the Dow was down 89.36.

In the broader market, advancing issues held a narrow edge on declines in nationwide trading of New York Stock Exchange-listed stocks, with 793 up, 743 down and 503 unchanged.

“Trading was directionless,” said Ned Collins, head of equity trading at Daiwa Securities. “With all the uncertainty, people don’t want to hold stocks over the weekend.”

A government report Tuesday showing that consumer prices rose at a troubling rate last month rattled the market this week. It dimmed hopes that the Federal Reserve will cut interest rates further, given underlying inflationary pressures.

What’s more, investors are reluctant to put much new cash to work after a slew of corporations--most notably IBM Corp.--this week said they expected first-quarter earnings would fall below Wall Street expectations.

The news roiled the market, raising questions over the health of the economy and the outlook for corporate earnings generally.

The latest company to report that it expects earnings to come in below Wall Street estimates was B. F. Goodrich Co., which said Friday that it anticipates that it will break even or post a modest loss for the first quarter.

Among the market highlights:

* Goodrich’s stock ended down 5/8 at 38 1/8.

* Despite moving higher during part of Friday’s session, IBM eventually ended down 1/4 at 111 5/8. It was the fourth-straight loss for “Big Blue.”

* Another company hit by earnings jitters this week, oil services giant Schlumberger Ltd., closed up 1 1/2 at 58 3/4, after having tumbled 4 1/8 Thursday.

Schlumberger had told analysts Thursday that it expects first-quarter earnings to be below Wall Street estimates. Nevertheless, some analysts reiterated “buy” ratings for the company Friday.

* Shares of USAir Group fell 1 1/4 points to 19 3/8 after the airline holding company said it expects a loss for 1991 due to the recession and the downturn in traffic caused by the Gulf War. Citing a need to raise cash, USAir said it plans to sell to private investors $240 million in certificates secured by 50 aircraft. It also plans to sell, then lease back, 23 DC-9 jetliners.

* Shares of Polaroid dipped 1 1/2 to 24 1/4. Prudential Securities analyst Alex Henderson cut his first-quarter, full year and 1992 earnings estimates for the company.

* Nynex Corp.’s shares lost 1 5/8 to 72. Sanford C. Bernstein & Co. cut its rating to a “hold” from a “buy,” citing the impact of the weak Northeast economy on the company.

* USAir fell 1 1/4 to 19 3/8 on news the airline expects a large first-quarter operating loss and that it filed for a $4 million depository share offering.

* Campbell Soup jumped 4 1/4 to 81 on vague takeover speculation and the company’s improved performance following a two-year restructuring. The stock hit a 52-week high of 81 1/2 earlier Friday.

Shares ended sharply lower on the London Stock Exchange. The Financial Times 100-share index was down 34.3 points, or 1.4%, at 2,440.5 at the close.

Tokyo’s key Nikkei 225-share index closed up 163.84 points at 26,613.19 in light volume.

Credit

Bond prices closed higher in a trading session marked by uncertainty over the economy’s future.

The Treasury’s bellwether 30-year bond rose 7/32 point, or $2.19 per $1,000 in face amount, at closing. Its yield, which moves in the opposite direction of price, was 8.31%, down from 8.33% late Thursday.

With no new economic reports to move the market, bonds rose in a late afternoon rally inspired by internal market influences of supply and demand.

The federal funds rate, the interest on overnight loans between banks, was quoted at 5.1516%, down from 6.188% late Thursday.

Currency

The dollar rose Friday after shrugging off another concerted attack by central banks to push it lower.

It closed at 1.6485 German marks in New York, compared to 1.6315 at Thursday’s close, and at 137.60 Japanese yen, compared to 136.73 Thursday.

“The dollar is still underpinned by a number of factors,” said Carl Amendola, assistant vice president at Hypobank. “The dollar will continue higher over the next few weeks.”

The U.S. currency edged off its day’s highs after the Federal Reserve sold it for German marks, but the selling did little to blunt the dollar’s ascent.

Germany’s Bundesbank and seven other European central banks also sold dollars. But dollar buying at lower levels persisted, dealers said.

The mark has been especially hard hit because of the economic pressures of German unity and uncertainty over the future of the Soviet Union.

In New York, the British pound fell to $1.7860 to buy one pound, less expensive than Thursday’s $1.7995.