Dow Ekes Out a Tiny Gain on Day of Caution : Market Overview

Highlights of Tu e sday’s market activity, compiled from Times staff and wire reports:

* Blue chip stocks posted only small gains after investors adjusted their portfolios on the last day of the first quarter and wiped out an earlier rise of more than 25 points. The Dow average ended 0.23 of a point higher at 3,235.47.

* Bond prices were mostly lower on economic data suggesting that the economy was continuing its steady, if sluggish, recovery.

Stocks

Analysts said the stock market was buoyed somewhat by upbeat economic data.

The Commerce Department said the nation’s key economic forecasting gauge--the index of leading economic indicators--posted its second monthly rise in February. The index rose 0.8% after a revised 1% rise in January. But some experts warned that negative earnings surprises could sap any strength from upbeat economic reports.

The Conference Board said that its monthly index of consumer confidence rose to 54 in March from 47.3 last month, indicating recovery.

Advancing issues outnumbered decliners by a margin of about 9 to 8 on the New York Stock Exchange.

Big Board volume totaled 182.22 million shares, up from 133.98 million Monday.

As the Dow began rising in early trading, the broader market was lower. But by the time the Dow came tumbling down near the closing bell, landing about where it had started the day, the broader market had advanced.

“We are still in a trendless market and we are going to remain so until we see earnings numbers,” said Robert Walberg, market analyst at MMS International.

Investors squaring their books for the end of the quarter set the tone at the end of the day. Traders said the late bout of profit taking reflected caution among investors prior to Friday’s important jobs data for March.

The NASDAQ composite index gained, buoyed by strength in technology stocks.

Among the market highlights:

*Walt Disney Corp. rose 1 to 151 5/8. Salomon Bros. and Morgan Stanley repeated their buy recommendations. Analysts said the entertainment company will benefit from a deal giving it a 45% stake in the parent company of a major New York television station.

* Bristol-Myers dropped 2 to 76 1/4. It indicated to analysts that sales growth in the first quarter would be slower than expected, prompting several firms to cut their estimates or ratings.

* Intel Corp. rose 2 to 55 1/4. Kidder Peabody analyst John Joseph said he believes that the company’s high-end multiprocessors are selling well, and he recommended the stock.

* General Physics lost 3 1/2 to 12 1/4.

* Several initial public offerings were active. Xircom rose to 16 3/4 from its initial opening price of $14. Longhorn Steaks rose to 21 1/2 from its opening price of $16.

Overseas, Tokyo’s blue chip stock index closed at a five-year low despite a long-awaited government plan to stimulate the economy. The 225-share Nikkei average ended with a loss of 323.36 points, or 1.64%, at 19,345.95.

Share prices also declined on London’s stock exchange. The Financial Times 100-share average ended down 12.8 points at 2,440.1.

Strong gains for car manufacturer Volkswagen and engineering stocks steered the Frankfurt market higher. The 30-share DAX average ended at its day’s high of 1,717.86 points, up 7.55.

Credit

The price of the Treasury’s bellwether 30-year bond fell 1/8 point, or $1.25 per $1,000 in face amount. Its yield rose to 7.95% from 7.94% late Monday.

But trading was mostly light, ahead of major economic reports scheduled for release later this week, including March unemployment figures.

Analysts said most declines came early on concern over the leading indicators and consumer confidence reports that pointed toward economic revival but were not as strong as some market participants had feared, prompting a slight rebound.

The gain indicated economic improvement, which normally depresses bond prices since it lessens the likelihood that the Federal Reserve will lower interest rates. But a sluggish economic recovery might cause the Fed to lower interest rates to push things along.

The federal funds rate, the interest on overnight loans between banks, was quoted at 4.25%, down from 4.125% late Monday.

Currency

The dollar was mixed in moderate trading, with analysts saying the latest batch of economic data wasn’t enough to propel the greenback to new highs.

The dollar’s soft performance came despite a round of positive news on the U.S. economy, including the Commerce Department’s report that its key indicators index rose 0.8% in February.

Later came the Conference Board’s report that its survey of consumer confidence increased boldly to 54 in March, up nearly seven points from February.

Robert Ryan, senior trader at the Bank of New York, said the reports were not enough to jolt the dollar out of its narrow trading pattern.

“The market is looking for a catalyst here, and we haven’t seen it,” Ryan said.

In New York, the dollar was quoted at 133.85 Japanese yen, up from 132.75 yen late Monday. The dollar fetched 1.6450 German marks, up from Monday’s 1.6445.

The British pound closed in New York at $1.736, less expensive than Monday’s closing of $1.738.

Commodities

A burst of Far Eastern and European buying pushed platinum futures prices up sharply on the New York Mercantile Exchange, but analysts weren’t ready to declare a recovery in the depressed market.

Gold and silver futures also rose. On other commodity markets, grains and soybeans were mixed; energy futures rose, and livestock and meat futures were mostly higher.

Platinum for April delivery climbed $5.90 to $357 an ounce. It was the highest price in two weeks, but platinum remains near a six-year low.

On New York’s Commodity Exchange, April gold rose $1.80 to $343.70 an ounce, and May silver edged up 0.3 cent to $4.143 an ounce.

The relatively weak performance of the other precious metals suggested that platinum’s rally was “a little suspect,” said William O’Neill, senior futures strategist with Merrill Lynch Futures in New York.

“We’ll need to see some follow-through” to confirm the market’s strength, he said. “I do not think today’s action portends a turnaround in the precious metals.”

O’Neill said the platinum rally reflected Far Eastern buying and indications that production in the former Soviet republics may decline this year because of equipment and transportation problems.

Meanwhile, energy futures rose on the New York Mercantile Exchange, as light, sweet crude oil for May delivery rose 19 cents to $19.44 a barrel.

Market Roundup, D8