The stock market managed a slight rise Thursday, in a day most noted for the first after-hours trading in the history of the nation's biggest stock exchange.
The Dow Jones industrial average, though down early in the day, closed up 3.13 points at 2,965.12. Interest rates stabilized Thursday after rising sharply on Wednesday, and the calm helped stabilize stocks as well.
In the broader market, rising stocks beat losers 793 to 726 on the New York Stock Exchange.
The most important aspect of the day was that the 4 p.m. NYSE closing bell constituted a brief respite instead of the day's end.
Under the new late-trading program, the Big Board is offering two overlapping, albeit limited, post-4 p.m. sessions. In the first day of late trading, however, late activity was minimal--just 1.6% of the total 147.2 million shares traded. (Session details, D2.)
Overall, the stock market treaded water, largely unaffected by three bullish economic reports. The Dow had tumbled 24 points Wednesday, hit by rising interest rates as investors worried that a strong pick-up in the economy could lead to a burst of inflation.
"I suspect that after the declines we've had, which have been sharper in most stocks than in the Dow, the bruises are beginning to heal," said analyst Don Hays of Wheat First Securities.
But A. G. Edwards analyst Al Goldman argued that "economic data is not driving the market. That's only the excuse. The reality is that a lot of cash has been invested, interest rates are high and people feel, 'We've been in a consolidation for four months so why rush (to buy stocks)?' "
That is likely to continue until investors see clear signs that corporate profits will recover with the economy, experts say. Ominously, several firms on Thursday projected dismal second-quarter profits, which could mean rough sailing for stocks when profit reports begin to flow in July.
Among the market highlights:
* Many industrial and rail stocks rose, as signs increased that the economy is emerging from recession. Norfolk Southern added 5/8 to 48 1/8, Conrail gained 1 1/2 to 57 3/8, Dow Chemical was up 1 to 55 3/8, Ingersoll Rand rose 7/8 to 50 7/8, and Cummins Engine rose 1 1/4 to 40 3/4.
* Bank and mortgage stocks continued to slump, apparently on interest rate concerns. BankAmerica lost 5/8 to 37 1/2, First Interstate gave up 3/4 to 35 3/4, and Federal National Mortgage dropped 1 to 48.
* Stocks plunging on earnings projections included Cincinnati Bell, which lost 2 5/8 to 19 3/4 after projecting a small loss. Also, chemical firm Calgon Carbon plummeted 6 to 22 1/4 after saying quarterly earnings would be 20% to 25% below year-ago levels. It cited the slow economy.
Another loser was Chatsworth-based computer disk drive maker Micropolis, which tumbled 2 7/8 to 7 1/8 after it said quarterly earnings would be less than the 20 cents a share earned a year ago. Montgomery Securities projected an 11-cents-a-share profit.
* Ventura-based Benton Oil & Gas slipped 1/8 to 8 3/8. But after the close, the company said it raised $6.7 million in a private placement of securities. Benton has been on a major capital-raising program to find oil and gas drilling.
In overseas trading, London's Financial Times 100-share average eased 5.6 points to 2,514.6.
In Frankfurt, the DAX average lost 8.21 points to 1,692.63.
In Tokyo, the Nikkei average gained 325.48 points to 24,808.17.
In Mexico City, the Bolsa index rose after four days of declines, adding 7.07 points to 1,079.14.
Interest rates eased after recovering from an early spike on news of higher inflation and improving retail sales.
The Treasury's 30-year bond ended up 11/32 point, or $3.44 per $1,000. Its yield was 8.51%, down from 8.55% Wednesday.
The market had a wild ride when the Labor Department reported its producer price index shot up 0.6% in May, the biggest gain in seven months. The yield of the 30-year bond quickly hit 8.62% after the report, but then fell back as investors saw the inflation report was skewed by one-time events.
Analysts said bond traders remain unsure whether to bet that a healthier economy will mean higher interest rates.
Meanwhile, L.A. County sold $1.3 billion in one-year notes at a yield of 4.55%, about as expected.
The dollar rallied to a 19-month high against the German mark amid fresh evidence that the U.S. economy is recovering.
The dollar hit a morning peak of 1.809 marks before edging back to close at 1.798 in New York. It was still up from Wednesday's 1.790.
Against the yen, the dollar eased to 141.25 from 141.45.
Oil prices fell on the New York Mercantile Exchange amid news that more Iranian crude will be coming to the United States.
The market opened higher in a follow-through to Wednesday's buying, but oil dropped after the market learned that Chevron Corp. agreed to buy an anticipated 1 million to 3 million barrels of Iranian crude, pending federal OK.
Light crude settled 11 to 36 cents lower, with July at $19.71 a barrel.
Gold and silver futures did little on New York's Comex. Gold ended unchanged to 20 cents lower, with June at $370.20 an ounce; silver was 2.3 to 2.4 cents higher, with July at $4.52.