Dow Up 4.86 on 11th-Hour Buying Surge : Market Overview

* Stocks closed slightly higher on buying related to the end of the third quarter.

* The dollar steadied after touching an all-time low against the Japanese yen.

* Coffee prices surged on signs of a thaw between delegates representing coffee producing and consuming nations at just-concluded talks in London.

Stocks

With buyers wary ahead of the release of Friday’s unemployment figures for September, the Dow Jones industrial average edged up 4.86 points to 3,271.66.

In the broader market, advancing issues led decliners 1,030 to 687 on the New York Stock Exchange, where volume was a moderate 184 million, compared to 170 million Tuesday.

Analysts said many investors are on the sidelines, waiting to see if a bad unemployment number provokes the Federal Reserve to cut interest rates in a bid to help the economy. A rate cut could ignite stocks.

The dollar has come under severe pressure lately, due in large part to the gap between low U.S. interest rates and high German interest rates.

Meanwhile, the key economic news of the day was downbeat. The government reported that new home sales for August fell 6.1% nationally from a year earlier and a whopping 19.5% in California.

Brokers said a flurry of afternoon buying stemmed from last-minute maneuvering by investment institution money managers preparing to make quarterly reports to their employers and clients.

Among the market highlights:

* IBM fell 3/8 to 80 5/8 in the wake of a big restructuring announcement late Tuesday. Several analysts lowered their earnings estimates on the company, but others kept neutral ratings after the restructuring announcement.

* Sears, Roebuck was unchanged at 44 3/4 in active trading after making a 3 3/8-point jump Tuesday, when it announced plans to dispose of its financial services businesses.

* Computervision, the volume leader among Big Board stocks, tumbled 3 to 6 1/4. The company estimated substantially lower third-quarter earnings. Computervision went public last month with a 25-million-share offering at $12.

* Auto stocks were a bright spot, recouping some of their recent losses. Ford Motor gained 5/8 to 39 1/2, General Motors 1/8 to 32 1/8 and Chrysler 3/4 to 23 1/8.

* Property and casualty insurance and reinsurance stocks attracted end-of-quarter buyers. Chubb gained 2 1/2 to 85 1/2, American International Group 2 7/8 to 106, Old Republic International 1 1/8 to 24 3/8, Aegon 1 1/8 to 41 7/8, General Re 1 7/8 to 103 7/8 and National Re 3/4 to 24 1/4.

* Natural gas stocks continued to gain, riding the crest of a summer-long rally in gas prices. Piedmont Natural Gas rose 1 7/8 to 38 3/4, Enron 3/4 to 49, Arkla 3/8 to 10 3/4 and Peoples Energy 1/2 to 31 1/4.

* Dep, traded on NASDAQ, rose 1 1/4 to 13 1/4 on higher quarterly profit.

Overseas, German shares skidded to a 1992 closing low on high interest rates, the weak dollar and domestic economic worries. Frankfurt’s 30-share DAX index lost 9.9 points to 1,466.36.

London stocks dipped on program selling, pessimism over the chances of an interest rate cut and the news that corporate bankruptcies have jumped. The 100-share Financial Times index dropped 12.5 points to 2,553.0.

Tokyo stocks fell for the fourth straight day. The 225-share Nikkei average lost 349.01 points, or 1.97%, to 17,399.08.

Currency

The dollar closed in New York at 119.85 Japanese yen, up from 119.25 Tuesday, after dipping overnight in Tokyo to a new low against the yen before recovering.

Worries about the U.S. economy contributed to the dollar’s plunge to 118.60 yen during morning trading in Japan, its lowest level since post-World War II exchange rates were set in the late 1940s.

The dollar fell in New York to 1.4100 German marks, down from 1.4110. The British pound traded at $1.7865, cheaper than Tuesday’s $1.7895.

Traders said the dollar is poised to set new lows against the mark and yen if news of a sizable drop in September U.S. employment triggers another cut in U.S. interest rates. Its all-time lows are 1.3860 marks, set Sept. 2, and 118.65 yen, set Wednesday in Tokyo.

In a sign that currency turmoil in Europe continues to subside, Sweden lowered its key lending rate to 24% from 40%.

But in Canada, banks lifted their prime lending rate a full two percentage points to 8.25% after the Canadian dollar took a beating in currency markets on fears that a vote on national unity will be defeated.

The Canadian dollar recovered after the rate increases to close at 80.32 U.S. cents, compared to 80 cents Tuesday.

Commodities

Analysts said the surge in coffee prices reflected the fact that eight days of talks in London succeeded in breaking an icy relationship between coffee consuming and producing nations.

“They appear to have made some inroads,” a coffee analyst in New York said of the talks.

December coffee jumped 1.60 cents to 55.70 cents a pound on New York’s Coffee, Sugar and Cocoa Exchange.

Growers and consumers now at least agree on a definition of quotas and made headway on the principle of selectivity, which would allow consumers to choose the type of coffee they import.

“Hopefully this will serve as a stepping stone to an accord which will benefit consumers and producers alike,” Nicaragua’s delegate, Frank Bendana, said.

Many producing countries, such as Nicaragua, rely on coffee exports for a large part of their foreign exchange. They have been hurt badly since prices plunged to 20-year lows in the wake of the collapse of the quota system in 1989.

Meanwhile, orange juice prices recovered from their recent decline. Juice for November delivery rose 1.75 cents to 106.55 cents a pound. Prices had dropped precipitously this week on estimates of a larger than expected Florida crop.

October gold slipped 40 cents to $347.80 an ounce on New York’s Commodity Exchange. December silver rose 1.4 cents to $3.762 an ounce.

Light, sweet crude oil for November delivery rose 4 cents to $21.71 a barrel on the New York Mercantile Exchange.

Credit

Bonds were mixed, with long-term rates off slightly in anticipation of a Friday’s unemployment report.

The price of the Treasury’s main 30-year bond fell 3/16 point, or $1.87 per $1,000 in face amount. Its yield, which rises when prices fall, was 7.38%, up from 7.36% Tuesday.

The dollar steadied Wednesday after touching a new low against the Japanese yen.

The federal funds rate, the interest on overnight loans between banks, rose to 5.00% from 2.75% Tuesday. The rate often fluctuates sharply on Wednesdays because of bank settlements.