MARKETS : Dow Jumps 36, Sets Record at 3,306.13

* The Dow Jones industrial average jumped 36.23 points to close at 3,306.13, its 17th record this year. The previous record was six weeks ago, when the index closed at 3,290.25.

* Oil prices fell sharply, weakened by an abundance of supplies and word that Iraq is unexpectedly close to selling oil under United Nations supervision, a move that could aggravate the oil glut.

* The Chicago Board of Trade remained closed because of flooding, but the Chicago Mercantile Exchange reopened.

Stocks

The stock market record was set as investors enthusiastically embraced a string of surprisingly favorable corporate earnings reports, led by IBM’s better-than-expected showing.

Advancing issues overwhelmed declining ones 12 to 5 on the New York Stock Exchange.

Volume on the Big Board was 230.62 million shares, up from 143.12 million the previous session.

Non-Big Board trading picked up after Monday’s flood in Chicago, which closed the Chicago Board of Trade, where stock index futures and options change hands. Although the Board of Trade remained closed Tuesday, a number of important contracts were traded on the Chicago Mercantile Exchange.

Stocks opened in positive territory and climbed steadily throughout the session. At one point the Dow was up more than 50 points, triggering restrictions on computer-driven program trading.

But analysts attributed the broad-based upward move to genuine demand for stocks rather than computer-generated buying.

Among the broader indexes, the NASDAQ composite index of smaller stocks gained 6.66 points to 594.81, a strong performance.

Among the encouraging earnings reports was IBM’s quarterly operating profit of $1.04 a share, far better than the 90 cents a share analysts had expected.

IBM, which rose 3/4 to 88 1/4, was the most active issue on the Big Board, with more than 3.3 million shares changing hands.

“IBM helped to show that things aren’t as grim as many people were thinking,” said Richard Meyer, head of equity trading at Ladenburg, Thalmann & Co.

Among the market highlights:

* Other issues spurred on by favorable earnings reports included GTE, up 3/4 to 31; GE, which added 1 1/2 to 76 3/4, and International Paper, which rose 2 3/8 to 72 3/8.

* Trucking stocks also gained on economic recovery expectations, after Roadway reported strong quarterly earnings. Roadway surged 4 1/4 to 75 1/2, Ryder added 1 1/4 to 24 3/4, and Consolidated Freight rose 7/8 to 17 5/8.

* Financial services issues rose sharply and then receded as traders cashed in on the run-up. Several brokerages reported extremely favorable earnings, thanks to a robust stock market, brisk corporate debt and equity underwriting.

Merrill Lynch, the nation’s biggest brokerage, which earned a record $227.5 million in the quarter, closed down 7/8 to 50 1/8. PaineWebber was unchanged at 20 3/4, and Charles Schwab added 1/4 to 29 5/8. Both reported sharply higher income.

In the banking sector, Chemical Bank, which cut its prime rate Monday to the lowest level since 1976, jumped 2 3/8 to 34 1/8.

* Procter & Gamble, which declared a 2-for-1 stock split and raised its dividend, soared 4 1/2 to 104 1/2. Other blue chips rising sharply included Merck, up 2 to 155 1/4, and 3M, up 3 1/2 to 91 3/4.

But Alcoa slipped 2 to 71 3/4 on profit taking. It rocketed 5 3/4 Monday after reporting better-than-expected earnings.

Overseas, Tokyo stocks ended firmer after a seesaw day. The 225-share Nikkei average rose 202.93 points to 17,439.58.

In London, strength in the futures market helped push the 100-share Financial Times index past the psychologically important 2,600-point level for the first time since Oct. 18. It rose 9.5 points to 2,600.5. In Frankfurt, the DAX index added 4.79 points to 1,732.53.

Credit

Treasury bond yields rose slightly as investors apparently decided to pull back after the recent buying spree.

Trading was quiet, partly because of the closure of the Treasury futures market in Chicago because of flooding.

The benchmark 30-year bond, which rose 1/4 point Monday, fell 3/32 point, or about 94 cents per $1,000. Its yield, which moves in the opposite direction from price, inched up to 7.86% from 7.85%.

Market analysts said bond traders shrugged off two economic reports. A report that retail sales in March fell 0.4% was in line with expectations. The market also had little reaction to a report saying auto sales for the most recent 10-day reporting period were a bit lower than expectations.

The federal funds rate was 3 1/4%, down from 3 5/8% Monday.

Currency

The dollar was flat to marginally higher against most major currencies, partly because of worries about political stability in Russia.

“It was a very quiet day,” said Kevin Logan, chief economist for Swiss Bank in New York. “We traded in a very tight range, and the markets barely moved.”

Although President Boris N. Yeltsin reached a compromise with lawmakers that will allow him to continue free-market reforms, there is still uncertainty about Russia’s political and economic future, traders said.

The dollar rose in New York to 1.654 German marks from 1.653 Monday. It closed at 133.00 Japanese yen, unchanged from Monday.

Commodities

The specter of renewed Iraqi oil sales, banned since Iraq’s August, 1990, invasion of Kuwait, sparked panic selling of crude futures on the New York Merc.

Traders said heavy selling was ignited as May crude oil tumbled 36 cents to $19.86 a barrel. Gasoline futures also fell, with May off 1.53 cents to 58.23 cents a gallon.

The Merc was abuzz with speculation that the United Nations and Iraq were working on a deal that would permit Iraq to sell more than the $1.6 billion worth of oil the United Nations has allotted it.

Elsewhere, the Chicago Board of Trade, where soybeans and grain are traded, was still closed because of flooding. Futures trading was expected to resume today.

Meanwhile, gold closed at $339.50 an ounce, up 30 cents, on the New York Commodity Exchange. Silver settled at $4.10 an ounce, up 1.6 cents.