STOCKS : Market Continues to Seesaw; Dow Off 10.29

The stock market finished mixed Thursday, continuing its meandering course as investors focused more on individual issues than on broad economic trends.

The Dow Jones industrial average lost 10.29 points to 2,900.04, but several other key indexes gained.

In the broad market, declining issues slightly outnumbered advances among New York Stock Exchange-listed stocks, with 790 down, 737 up and 533 flat.

Big Board volume rose to 173.08 million shares from 159.31 million Wednesday.

Analysts said some blue chips were hurt by a slight rise in long-term bond yields, as bond traders sold long-term issues in favor of shorter-term ones. Also, program trading resulted in selling bouts throughout the day.

Traders also were winding down positions as the Memorial Day holiday approached.

Overall, though, investors continued to show the same selectivity that has categorized most trading sessions of late: Buyers are searching for good stock stories in a still-weak economy, and companies that are more likely to surprise with good earnings reports than bad ones in the second quarter.

Traders seemed to ignore a Commerce Department report that durable goods orders rose in April for the first time this year, after three consecutive monthly declines. Orders for long-lasting durable goods rose 2.9% in April after a revised 4.5% drop in March.

A reported rise in mid-May car sales failed to help auto stocks: Ford and Chrysler shares both were flat for the day at 32 3/4 and 12 1/2, respectively. GM, though, rose 7/8 to 38 5/8 after a Kidder Peabody analyst repeated a buy rating, citing expectations of a strong rebound from the recession.

“The new-car sales means a turnaround is closer at hand . . . but it put water on the campfire because then it raised concerns that the Fed won’t lower interest rates” further, said Paul Kronlokken at Piper Jaffray & Hopwood.

Among the market highlights:

* Investors poured into some recently beaten-down biotech stocks. Amgen rose 2 3/4 to 124 1/2, California Biotech jumped 3/4 to 13 7/8, Centocor gained 2 to 69 1/4, U.S. Bioscience rose 2 1/2 to 39 1/2 and Alza was up 1 3/8 to 63 1/8.

* Elsewhere in the health-care sector, PacifiCare Health jumped 2 to 32, Home Nutrition added 1 to 18 and Santa Ana-based Tokos Medical soared 1 3/4 to 23 1/2. Tokos, which makes pregnancy monitoring devices, said its executives have been meeting with analysts in New York and Boston this week. The company says it is comfortable with estimates of 55 to 65 cents a share in earnings this year.

* Many retail issues continued to show strength. Home Depot leaped 2 1/8 to 64 3/4, Ann Taylor gained 3/4 to 28 5/8 and Kmart climbed 3/4 to 43 1/4. Also, Irvine-based Wet Seal rocketed 2 1/8 to 15 1/2. The company reported quarterly earnings off 50% from a year ago, but that was better than expected in the current retail slump.

* Many smaller tech stocks rose, a sign that investors are looking for bargains in the group, despite a computer-sales slowdown. Among Southland issues, Tekelec added 1/2 to 19 1/4, International Rectifier gained 5/8 to 20 7/8, and Teradata rose 1 1/4 to 16 1/2. But Advanced Logic fell 3/4 to 12 1/4 as the company began a secondary offering of one million shares at 12 1/2 each.

Irvine-based State of the Art, a maker of accounting software, went public at 9 a share Thursday. The company sold 3 million shares. The stock, traded on the NASDAQ system, closed at 9 1/4.

* Semiconductor giant Intel jumped 2 to 50 1/2. Morgan Stanley’s head of U.S. portfolio strategy declared Intel one of his top picks.

* Oil stocks again were weak. Halliburton fell 1 5/8 to 41 1/2, Baker Hughes dropped 3/4 to 26 7/8, Mobil lost 3/4 to 65 1/4, and Pennzoil gave up 1 3/4 to 67 3/8.

* Ailing L.A. Gear dropped 1 to 10 1/4, one day after saying it was seeking a financial partner.

* Orion Pictures tumbled 1 5/8 to 4 3/8, and traded as low as 4, as investors continued to doubt the debt-heavy company’s survival. The stock has crashed from 9 last week. Monday, Orion asked its junk bond holders to agree to a recapitalization, but the bonds as well as the stock have fallen all week.

* Time Warner added 2 1/4 to 114 5/8, rebounding from Wednesday’s steep selloff triggered by talk that Wall Street boutique Gerard Klauer Mattison had issued a sell rating on the stock. Thursday, Smith Barney, Donaldson Lufkin & Jenrette, Shearson and First Boston all repeated buy ratings.

* Southland-based highway construction firm Kasler rocketed 1 5/8 to 20 1/8. There was no news.

In overseas trading, Germany’s 30-share DAX average shook off early profit-taking to add 5.02 points, finishing at 1,652.71.

Talk of a further cut in British interest rates and strong corporate earnings helped boost London’s Financial Times-Stock 100-share average 16.9 points to 2,482.8.

In Tokyo, the Nikkei average rose 244.99 points to 25,643.65.

The Mexican market reached yet another new high as the U.S. House approved fast-track negotiations for a free-trade pact with Mexico. The Bolsa index rose 11.03 points to a record 1,045.06. Also, Brazil’s Bovespa index leaped 2.1% to a record 87,636 on optimism about that nation’s economy.

Credit

An upbeat auction of five-year Treasury notes and technical trading before the holiday weekend left government bonds mixed.

The Treasury’s 30-year bond was down 1/4 point, or $2.50 per $1,000 in face amount. Its yield was 8.29%, up from 8.27% Wednesday.

Strong demand for more than $21 billion in two- and five-year notes auctioned by the Treasury the past two days led investors to buy shorter-term issues and sell long-term bonds. Longer-term issued also suffered slightly from upbeat economic reports, including a rise in durable goods orders.

The new five-year notes auctioned Thursday brought an average yield of 7.69%.

Also, there was an abundance of technical trading in advance of the Memorial Day weekend, said Jay Goldinger, strategist for Beverly Hills-based Capital Insight Inc.

The Fed funds rate, the rate on overnight loans between banks, fell to 5.75% from 5.633% Wednesday.

Currency

The dollar fell in thin trading as traders squared up their books ahead of the holiday.

“People are not going to be overly aggressive ahead of a three-day weekend,” Barclays Bank dealer Robert Hatcher said.

Currency markets will be closed Monday in Britain for the spring bank holiday and in the United States for Memorial Day.

The dollar’s drop erased early gains made on the bigger-than-expected rise in durable goods orders.

The dollar fell to 1.712 German marks in New York, down from Wednesday’s 1.72, and to 137.78 Japanese yen from 137.80.

Commodities

Soybean futures prices rose for the third straight day, extending a recovery linked in part to prospects of shrinking supplies in the United States and Brazil.

Soybean futures settled 2.50 to 5.50 cents higher on the Chicago Board of Trade, with the contract for delivery in July up 2.50 cents to $5.82 a bushel and the November contract up 4 cents to $5.97.

Elsewhere, crude oil futures rose slightly on the New York Mercantile Exchange as traders evened up their positions ahead of the long weekend. Light, sweet crude futures settled 4 cents lower to 19 cents higher, with July at $21.02 a barrel.

On New York’s Comex, gold futures settled $1.30 to $1.40 lower, with June at $355.50 an ounce; silver was 0.5 to 0.7 cent higher, with May at $4.04.