Dow Falls on Eve of Jobs Study : Market Overview

* Stocks fell in quiet trading, with Wall Street edgy ahead of key April employment figures that will provide a solid gauge of the economy’s strength. The Dow Jones industrial average slipped 6.04 points to 3,363.37.

* The dollar closed higher on worldwide markets after Germany’s central bank decided against raising interest rates.

Stocks

With the Treasury finishing its quarterly bond auction Thursday, and the April jobless report due today, many investors stayed on the sidelines.

Declining issues just edged winners on the New York Stock Exchange, as volume totaled a relatively light 168.98 million shares.

The final leg of the Treasury’s bond auction--the sale of 30-year bonds--went about as expected, traders said. Stocks showed no significant reaction.

Today’s April employment report is likely to prompt a bigger response. Many investors are hoping for one of two things: A stronger-than-expected report, which would signal that the economy is indeed gaining momentum, or a weaker-than-expected report that would prompt the Federal Reserve to ease interest rates.

A mediocre report might not make anyone happy, some said.

Thursday, retailers reported strong sales figures for April in what analysts called a sign that consumers are emerging from their long hibernation to buy a broad range of goods.

But the government said the number of Americans filing new claims for unemployment benefits rose a moderate 11,000 to 415,000 in late April--a sign the job market remains under pressure.

Among the market highlights:

* Retailers were mixed, reflecting their April sales reports. Sears dropped 1 3/8 to 42 after reporting that sales fell 3.9%, but Gap leaped 1 5/8 to 42 1/8 on a 13% sales rise. Penney gained 7/8 to 68 3/8, and TJX added 1/2 to 16 1/2, but Ross Stores lost 3/4 to 15 1/8.

* Value Merchants plummeted 4 5/8 to 16 1/8 after the discount toy retailer forecast a big quarterly loss because of slower sales.

* Among industrial stocks that would benefit from new signs of economic strength, Alcoa gained 1 to 75 5/8, Phelps Dodge rose 1 5/8 to 90 1/8, Monsanto added 5/8 to 66 7/8, and USX-U.S. Steel was up 1/2 to 26. On the downside, Goodrich fell 3 to 53 1/2, and Goodyear lost 2 1/8 to 72 1/4.

* Bank stocks were strong. Wells Fargo added 1 1/8 to 79 7/8, Chase Manhattan rose 5/8 to 28 5/8, and First Chicago gained 5/8 to 32 3/4.

* Some oil-services stocks rose sharply as investors showed new interest in the group. Schlumberger rocketed 4 5/8 to 69 1/8 and Halliburton 1 3/8 to 28 1/2.

* IBM stayed on its winning streak, up 1 5/8 to 93 3/4 after saying that it will sell its stake in the telecommunications firm Rolm, which has been a disastrous investment.

* American Software plunged 3 1/2 to 12 3/4 on a disappointing quarterly earnings projection.

* Among Southland issues, health maintenance organization FHP rose 7/8 to 15 1/4 despite reporting lower quarterly earnings. Also, construction firm Kasler lost 1/4 to 9 5/8 after its chief executive resigned to pursue other interests.

Also, diet-center operator Jenny Craig plunged 1 3/4 to 20 1/4 after saying some major stockholders plan to sell two million shares.

Overseas, Tokyo stocks posted a second day of strong gains. The Nikkei average finished up 532.22 points, or 3%, at 18,410.88.

London’s 100-share Financial Times average finished up 3.2 points at 2,701.9, another record high. Frankfurt’s DAX index edged up 7.31 points to 1,750.81.

Currency

Currency traders said the dollar got a boost when the German central bank’s policy-makers left key interest rates unchanged.

Some traders expected the bank to raise German rates, in reaction to the inflation threat posed by difficult wage negotiations between public-sector employees and the German government.

In New York, the dollar rose to 1.638 German marks from 1.629 Tuesday, and to 132.85 Japanese yen from 132.25.

Traders noted that the dollar still is vulnerable if the Federal Reserve were to cut U.S. interest rates.

Credit

Treasury bond yields finished little changed after a successful auction of 30-year bonds that was countered by wariness in advance of today’s unemployment report.

The Treasury’s 30-year bond finished the day unchanged. Its yield held at 7.96%.

The bond auction, the final leg of the government’s $36-billion quarterly refunding, received a healthy amount of bidding. The demand helped support bond prices.

The federal funds rate, the rate on overnight loans between banks, was 3.81%, up from 3.63% Wednesday.

Commodities

Profit taking in silver led metals lower on New York’s Comex. June gold fell $1.60 to $335.90 an ounce, while May silver dropped 3.2 cents to $4.03.

Oil finished mixed on the New York Merc. Light, sweet crude oil for June delivery fell 6 cents to $20.71 per barrel.