STOCKS : Dow Up 5.59 as Soviet Calm Boosts Markets

After three days of Soviet turmoil, the world’s financial markets by Thursday recouped nearly all of their losses caused by the abortive coup against Soviet President Mikhail S. Gorbachev.

In New York, blue chip stocks closed slightly higher as the market took a breather after three sessions of fast-paced dealings on the Soviet crisis. But other market indexes continued their climb to record highs.

The Dow Jones industrial average ended 5.59 points higher at 3,007.38. Trading on the New York Stock Exchange was subdued at 173.09 million shares, compared to Wednesday’s 232.69 million. Advancing issues led declines 896 to 698, while 512 were unchanged.

The NYSE composite index and the NASDAQ composite index advanced to new all-time highs.

Elsewhere, German shares rebounded sharply, with Frankfurt’s DAX-30 average soaring 60.01 points to 1,630.83, just 20 points below its close last Friday before the crisis started.

London’s Financial Times 100-share index beat last Friday’s previous record close of 2,621.0. It ended at 2,623.0, 21.1 points higher than Wednesday’s close.

In Asia, Tokyo’s Nikkei 225-share average closed up 464.17 points, or 2.1%, to 22,515.77, and Hong Kong’s blue chip Hang Seng index rocketed 181.89 points to 4,045.57.

With the Soviet crisis quiet for the moment, U.S. investors took profits in many stocks after the Dow’s 88.10-point rally on Wednesday.

The shakedown was most evident in some defense stocks. McDonnell Douglas sank 2 7/8 to 51 1/8, General Dynamics lost 1 5/8 to 42 1/2 and Northrop fell 1/2 to 29 7/8.

Alfred E. Goldman, a vice president at A. G. Edwards & Sons Inc., said the energetic rally has just about run its course. Goldman and other analysts wonder if the market can make further gains given the economy’s weakness.

The Labor Department on Thursday offered a fresh reminder of the recession’s persistence, reporting that initial claims for unemployment insurance were up 22,000 for the week ended Aug. 10.

Goldman said traders are more concerned about the high valuation of many stocks and the lack of available cash for new investment.

Bear Stearns’ Jack Solomon offered a contrary view. He said Monday’s steep plunge, when the Dow lost 70 points, cleared out passive investors and prepared the market for further gains.

“We ran a few days, and we need to rest a day or two,” said Solomon, the market’s activity.

Yet another view was offered by Lawrence Helfand, manager of retail sales at Chicago-based Rodman & Renshaw Inc.

“The market smells another lowering by the Fed,” said Helfand. “Each time in anticipation of it, the market has rallied.”

Many analysts agree that the Fed should lower interest rates and loosen the money supply again to stimulate investment and bring the economy out of its doldrums.

Among the market highlights:

* The Dow was pulled higher by Alcoa, up 7/8 to 66 3/8; International Paper, up 1 5/8 to 68 3/8, and Westinghouse, up 3/4 to 24 1/4. But IBM dropped 1 1/4 to 94 3/8.

* Several grain and fertilizer companies were stronger on expectations they would benefit if the United States extends more grain-buying credits to the Soviet Union. Archer Daniels Midland rose 1 3/8 to 25 1/2, Conagra gained 1 3/4 to 48 1/8 and IMC Fertilizer jumped 4 to 58 7/8.

* Dell Computer added 2 to 35 1/4 after reporting stronger-than-expected second quarter results. Oppenheimer repeated a short-term buy rating.

* Other stocks gaining on earnings reports included retailer Wet Seal, up 1 5/8 to 11 3/4; Neutrogena, up 1 1/4 to 21 3/4, and Caesars World, up 7/8 to 28 3/4.

* L.A.-based financial services firm Broad Inc. soared 1 5/8 to 13 1/2, although traders couldn’t immediately explain the move.

Credit

Bonds were also mostly higher as traders shifted their focus from the failed Soviet coup to the stumbling economic recovery.

The price of the Treasury’s bellwether 30-year bond was up 1/8 point, or $1.25 per $1,000 in face amount. Its yield slipped to 8.05% from late Wednesday’s 8.06%.

Short-term issues were mixed, as traders continued to unwind positions taken during Monday’s outset of the three-day coup, which drove investors to the “safe haven” of Treasuries.

Bonds seemed little moved by the release of jobless statistics that analysts saw as a sign of a sputtering recovery.

The federal funds rate, the interest on overnight loans between banks, was quoted at 5.563%, down from late Wednesday’s 7%.

Currency

The dollar finished mixed against major currencies in U.S. trading as traders continued moving away from the safe-haven currency after the failure of the Soviet coup.

But the German mark has continued to make gains since the coup crumbled. In New York the dollar fell to 1.730 German marks from 1.742 marks on Wednesday. The Japanese yen was quoted at 136.60, up from 136.55 yen Wednesday.

Commodities

Prices of platinum futures fell sharply Thursday on the New York Mercantile Exchange as Japanese selling and fears of Soviet dumping pressed the market to new 5 1/2-year lows.

On other commodity markets, gold and silver futures also fell; grains and soybeans rose strongly; oil prices advanced, and livestock and meat futures rose.

Platinum for delivery in October fell $9.20 to $336.20 an ounce, the lowest settlement of a near-term contract since Dec. 26, 1985.

Signs of new platinum sales by the Japanese, the world’s largest platinum investors and jewelry makers, triggered the selloff, said James Steel, metals analyst in New York with the commodities trading company Refco Inc.

On New York’s Commodity Exchange, gold for August delivery fell $2.60 to $354.30 an ounce; September silver dropped 2.8 cents to $3.91 an ounce.

Oil prices also advanced in a market that was relatively calm after three days of wild swings.

Light sweet crude oil for delivery in October settled at $21.72 per barrel, up 17 cents, at the New York Mercantile Exchange.