Jobless, Trade Reports Help Dow Rise 7.15 : Market Overview

* Stock prices edged higher, buoyed by an unexpectedly big drop in weekly jobless claims, a smaller trade deficit and a rebound on the Tokyo stock market.

* The Dow average remained within its narrow range of recent weeks, however, closing up 7.15 at 3,261.40.

* Treasury bond prices rose, boosted by the trade deficit report and news that the United States may be preparing to attack Iraq. The yield on the Treasury’s bellwether 30-year bond, which moves in the opposite direction from price, fell to 7.96% from 8.01% Wednesday.

Stocks

Smaller stocks also closed higher. The NASDAQ over-the-counter index added 1.02 points to 625.96.

In the broader market, advancing issues narrowly outnumbered declines 7 to 6 on the New York Stock Exchange. Big Board volume picked up, with 197.31 million shares changing hands, against 194.14 million Wednesday.

“We have seen good interest on the buy side,” said Ron Doran, director of institutional trading at C. L. King & Associates. “It’s not a blowout, but there is plenty of money to be put to work.”

The government reported that new claims for unemployment benefits fell to 433,000 in the week ended March 7 from 460,000 the previous week. The drop was steeper than expected.

The Commerce Department also reported that the trade deficit improved slightly to $5.77 billion in January.

The reports buoyed investors’ hopes for a recovery featuring little inflation.

Stocks also benefited from a 2% gain on the Tokyo market, which has fallen sharply in recent sessions on worries about the slowing Japanese economy.

Among the market highlights:

* Ford Motor was up 1 1/8 at 40 1/8 in heavy trading on a report that the auto maker will post a $119-million profit for the first quarter. The company declined comment.

* Other auto stocks saw active trading as well. Chrysler was up 1/2 at 18 3/8 and General Motors 1/4 at 38 3/8.

* Dow Chemical rose 1/4 to 59 7/8 after its joint venture, Dow Corning Corp., said it will quit making silicone gel breast implants. Dow Corning is a partner in the unit with Corning, which declined 3/8 at 33 1/2.

* Harley Davidson was up 3 3/8 at 59 3/4, and General Dynamics rose 1 1/8 to 63 5/8 after analysts recommended purchasing their shares. IBM fell 1 5/8 to 85 7/8 after an analyst cut his estimate of the computer maker’s earnings.

* Burlington Industries Equity, a new issue, led the most active list on the NYSE, unchanged at 14. Other active issues included Glaxo, the drug manufacturer, down 3/8 at 26 1/4; Waste Management, up 1 3/8 at 41 7/8, and American Telephone & Telegraph, up 1/2 at 39 7/8.

Overseas, Tokyo’s 225-share Nikkei average jumped 420.78 points to 20,185, clearing 20,000 for the first time since Monday.

In London, the Financial Times 100-share average edged up 2.9 points to 2,467.6.

In Frankfurt, the 30-share DAX average slipped 7.55 to 1,724.63.

Credit

The price of the Treasury’s bellwether 30-year bond, which fell 1/32 point Wednesday, was up 7/16 point, or $4.38 per $1,000 in face amount.

News reports indicated that the United States may be preparing to destroy Iraq’s missile production facilities because it has refused to comply with a United Nations resolution to do so.

News of impending military action often causes global investors to move money into dollar-denominated investments such as Treasury securities, which are considered safe havens.

The federal funds rate, the interest on overnight loans between banks, was 4.125%, up from 3.25% Wednesday.

Currency

The government’s report of a decline in the trade deficit sent the dollar up in sluggish trading.

The dollar hasn’t rallied significantly on any recent positive economic data.

The greenback climbed in New York to 133.65 Japanese yen from 132.30 Wednesday. It closed at 1.6713 German marks, up from 1.654.

The British pound slipped to $1.7108 from $1.728.

Commodities

Silver led a rebound in precious metal prices amid mounting fears of a U.S. strike against Iraq.

The talk from the Pentagon also helped lift oil prices. Buyers were also motivated by an increased possibility of an air embargo against Libya, analysts said.

On other commodity markets, grain, livestock and meat futures ended mixed.

Silver for March delivery jumped 9.1 cents to $4.121 an ounce on New York’s Commodity Exchange.

Gold rose 40 cents to $338.80 an ounce on the Commodity Exchange, and platinum climbed $3.10 to $350 an ounce on the New York Mercantile Exchange.

Light, sweet crude oil surged 22 cents to $19.29 a barrel on the New York Mercantile Exchange.