Blue chip stocks ended slightly higher Wednesday after shaking off moderate losses caused by news that U.S. Air Force units will be moved to Saudi Arabia to prod Iraq to comply with a United Nations cease-fire resolution.
The Dow Jones average of 30 industrials, which slipped 2.02 points Tuesday, edged up 4.70 to 3,017.89.
In the broader market, advancing issues outnumbered declines 724 to 843 on the New York Stock Exchange.
Big Board volume came to an estimated 141.34 million shares, against 168.37 million Tuesday. Many investors were out for the Yom Kippur observance.
Analysts said buying was evident in special situations as investors prepared for a batch of third-quarter corporate-earnings reports.
"The real story was the OTC marketplace," said Paul Hennessey, a vice president at Boston Co.
A rally in technology stocks helped the over-the-counter market post stronger gains than the Big Board's. The NASDAQ composite index of OTC issues rose 3.38 to 518.55.
News that U.S. forces will go to Saudi Arabia to force Iraq to comply with a U.N. cease-fire agreement initially weighed on the market.
"It's a little unnerving," said Hugh Johnson, chief investment officer at First Albany Corp.
The market ignored the Federal Reserve's Beige Book on regional economic trends, which reported little sign of a rebound in consumer spending.
"We're gearing up for disappointing (third-quarter) earnings. That will start coming out in about three weeks," said Robert Stovall, president of Stovall/21st Advisers.
Friday's expirations of stock index options and futures could be the next market mover, analysts said.
Among the market highlights:
* Concern that Schlumberger's earnings may come in below expectations sent shares down 2 3/8 to 66 1/2. Analysts said the oil field services and electronics company has advised them to lower estimates because of weakness in its U.S. operations.
* Marcam dropped 3 to 16 1/2. The company said analysts' fourth-quarter estimate of 27 cents a share is "quite aggressive."
* Blue chip gainers included International Business Machines, up 1/2 at 105 3/8; Coca-Cola, up 3/8 at 65 1/2; Procter & Gamble, up 7/8 at 84 3/4, and Philip Morris, up 3/4 at 73 5/8.
* Precious-metals issues were mostly higher as the depressed gold market rose a bit on the news concerning Iraq. Homestake Mining gained 3/8 to 15 1/8, ASA 3/4 to 46 5/8 and Newmont Gold 7/8 to 35 1/2. But Battle Mountain Gold was unchanged at 7 1/4 as the company warned that it could have second-half losses.
* Belmac rose 1 1/2 to 12 1/8 after the company said its macrolide antibiotic drug should make it profitable by fiscal 1993. Belmac announced Tuesday that it had received a patent for the drug.
* Scimed Life jumped 3 1/4 to 88 on speculation that the medical devices company will report second-quarter earnings next week that will again exceed expectations.
* Freddie Mac gained 1 7/8 to 99 5/8. Smith Barney raised its rating to buy from hold.
* Consolidated Freightways lost 1 1/2 to 99 5/8 after it said it expects to report a third-quarter loss of 45 cents to 55 cents a share.
* In the over-the-counter market, Intel climbed 3/4 to 41 3/4 after a recent selloff on disappointing earnings news. Apple Computer rose 1 1/8 to 50 1/8, Sun Microsystems 1 1/4 to 30 and MCI Communications 1 3/8 to 29 3/4.
Overseas, ASDA stores' warning of a profit problem and news that U.S. military units were returning to the Gulf depressed London stocks. The 100-share Financial Times average fell 10.8 points to 2,583.6.
German shares ended a lethargic session mixed to slightly lower. Frankfurt's 30-share DAX average fell 6.48 to 1,628.07.
Stocks in Tokyo fell on profit taking. The 225-share Nikkei average finished down 125.83 points at 23,317.78.
Long-term bond prices closed slightly lower and shorter maturities were mostly mixed in light trading because of the Yom Kippur holiday.
The 30-year-bond fell 3/32 point, or 94 cents per $1,000 face amount. Its yield, which moves in the opposite direction from price, rose to 7.92% from 7.91% Tuesday.
Bond analysts said the market saw a brief flurry of selling after a report on housing starts, which were slightly stronger than expected.
Dan Bernstein, research analyst at the Connecticut-based Bridgewater Associates Inc., said the bond market showed little response to the Fed's Beige Book report on economic conditions. Bernstein said bond traders regard the report as a lagging indicator of the economy's health.
The federal funds rate, the interest on overnight loans between banks, was at 4.50%, down from Tuesday's close of 5.50%. Federal funds were lower because the Federal Reserve made large injections of cash into the market early in the day, analysts said.
The central bank apparently was not trying to make a long-term adjustment to the federal funds rate, analysts said.
The dollar rose sharply as uncertainties in the Middle East and Soviet Union pushed traders to the relative safety of the U.S. currency.
Robert Ryan, corporate foreign exchange manager for the Bank of New York, said renewed tension in the Persian Gulf and uncertainty surrounding the health of Russian President Boris N. Yeltsin helped lift the dollar.
Ryan added that the long-term outlook on the greenback remains bearish because of the current climate of lower interest rates in the United States.
In New York, the German mark rose to 1.685 from 1.672 Tuesday. The Japanese yen was at 134.40, up from 133.85. The British pound fetched $1.7285, down from $1.7425.
Soybean futures prices rose strongly for the third straight day on the Chicago Board of Trade, reflecting increased prospects for overnight frost damage to crops in Iowa and Minnesota.
Other grain futures also advanced.
On other commodity markets, cotton, livestock, oil and precious metal futures rose.
Soybeans for delivery in November rose 6 cents to $6.175 a bushel, bringing the contract's advance since Friday to 20.75 cents. The more lightly traded September contract, which expires Thursday, rose 8.5 cents to $6.09 a bushel.
September wheat rose 2 cents to $3.33 a bushel, September corn rose 1.75 cents to $2.528 a bushel and September oats fell 2 cents to $1.168 a bushel.
Oil prices climbed on hints that the United States could attack Iraq. Light sweet crude for delivery in October settled at $21.84 per barrel, up 22 cents, on the New York Mercantile Exchange.
Precious metal futures firmed on New York's Commodity Exchange in reaction to crude's advance and to a Soviet official's statement that the country does not intend to sell gold to raise hard currency. October gold rose $1.90 to $349.20 an ounce. September silver was up 2.3 cents to $4.08 an ounce.