STOCKS : Despite Heavy Volume, Dow Gains Only 6.48

Stocks gained ground in a busy, erratic session Thursday marked by the heaviest volume of trading in nearly a month.

The Dow Jones industrial average rose more than 25 points during the day, but closed up 6.48 points, at 3,024.37.

Analysts said the market was pulled up in a fast-paced rally linked to program trading, which later ran out of steam.

In the broader market, advancing issues outpaced declining ones by more than 4 to 3 on the New York Stock Exchange. Big Board volume stepped up to a four-week high of 211.10 million shares from Wednesday’s 141.34 million.

The volume surge was attributed to program trading and to the unwinding of arbitrage positions that traders had taken in recent months, matching stocks against stock index futures and options. Such trading games have to be unwound by closing on Friday because that is when key futures and options contracts expire--one of four so-called triple-witching expiration dates of the year.

Jack Solomon, a technical analyst at Bear, Stearns & Co., said some investors also may have taken the opportunity to lock in profits after the Dow rose early in the day to 3,042, within striking distance of its all-time closing high of 3,055.23 set Aug. 28.

Smaller stocks continued a strong performance. The NASDAQ composite index rose 4.12 points, to 522.67.

Although analysts worried that the market would be unable to hold its gains of recent weeks, the continuing slide in interest rates seemed to preclude heavy selloffs.

Among the market highlights:

* The Dow stocks’ mixed performance illustrated the market’s unsure tone. Banking giant J. P. Morgan jumped 2 1/8 to 57 1/8, and Boeing rose 1 to 50, but Disney tumbled 1 5/8 to 110 7/8 ,and Union Carbide slid 1/2 to 21 3/4.

* Investors also showed they were eager to buy tech stocks on good news, after a string of disappointments in that sector in recent weeks. Adobe Systems rocketed 6 3/4 to 51 1/2 after the software firm reported third-quarter earnings were up 22%. Other tech gainers included Novell, up 1 5/8 to 34 3/4; Aldus, up 3 to 38 1/4; and Tandon, up 19 cents to 2.375.

Meanwhile, Costa Mesa-based computer tape-drive maker Archive plunged 3/4 to 2 7/8 after warning that it may have a loss in the current quarter.

* Many bio-tech stocks turned red hot again. Calgene soared 1 1/4 to 9, Regeneron leaped 3 3/8 to 16, and Genzyme jumped 3 1/4 to 48 3/4.

* Southland banking stocks were erratic. Glenfed jumped 3/4 to 7 1/2 in heavy trading. But BankAmerica lost 7/8 to 39 7/8, and its future merger partner, Security Pacific, lost 1 1/4 to 31 1/4. FirstFed Financial tumbled 1 1/4 to 31 1/4 after warning of rising loan problems.

* Most brokerage stocks continued to soar, partly on expectations that troubled Salomon Inc.’s loss of business will be others’ gain. Merrill Lynch jumped 1 5/8 to 48 5/8, Paine Webber gained 1 to 24, and Morgan Stanley rose 1 7/8 to 45 3/4. Meanwhile, Salomon fell 1 1/4 to 22 3/4, just above its 1991 low of 22 1/4.

* Transco Energy plunged 5 1/2 to 19 7/8. It said its Transco Exploration Partners had rejected all bids for its interest in the Chalkley Field, disappointing investors who hoped that the sale would cut Transco’s debt.

* Carnival Cruise Lines gained 1 to 24 3/8 on expectations that it will report strong third-quarter earnings next Wednesday.

Overseas, British shares received a late lift from a rising Wall Street. London’s Financial Times 100-share average ended a volatile day 5.1 points higher, at 2,588.7.

The German DAX average in Frankfurt fell 7.37 points, to 1,620.70.

Stocks in Tokyo ended mixed. The 225-share Nikkei average was up 14.53 points at 23,332.31.

Credit

Treasury bond prices managed a small gain, but shorter-term notes were little changed, with few factors to move the market.

The Treasury’s bellwether 30-year bond edged up 1/8 point, or $1.25 per $1,000. Its yield slipped to 7.91% from 7.92% Wednesday.

Despite the market’s lack of direction, many traders remained bullish that the Federal Reserve, which eased short-term interest rates last week, is prepared to do so again to prod the economy.

The federal funds rate, the interest on overnight loans between banks, was quoted at 5.25%, up from 4.50% late Wednesday.

Currency

The dollar rose slightly in light trading, influenced largely by the political uncertainty in the Soviet Union and the U.S. military’s return to the Persian Gulf.

The German mark is under particular pressure because of Germany’s economic ties to the Soviet Union. Many analysts believe that the Soviet Union will have difficulty repaying its Western debt.

The dollar closed at 1.689 marks in New York, up from 1.685. Against the Japanese yen, the dollar closed at 134.40, unchanged.

Commodities

Live cattle futures surged to a two-month high on the Chicago Mercantile Exchange after the government reported that fewer cattle were being fattened for slaughter than traders expected.

Live cattle for delivery in October rose 1.37 cents, to 73.67 cents a pound. Deferred deliveries rose between 0.50 cent and the permitted daily limit of 1.50 cents.

Oil prices settled moderately lower on the New York Merc. Light, sweet crude oil for delivery in October, which jumped 22 cents in the previous session, lost 8 cents to $21.76 a barrel

On New York’s Comex, October gold fell 40 cents to $348.80 an ounce, and September silver fell 1.4 cents to $4.07.