Dow Inches to Another High; Gold Tumbles

Stocks ended a whirlwind session Friday barely higher, but enough to push most key market indexes to record levels.

Bond yields closed mixed, and gold prices slumped sharply.

On Wall Street, the Dow Jones industrial average ended up 2.17 points at a new high of 5,541.62--its 10th record in the last 11 sessions.

But the blue-chip index had been up as much as 45 points in the morning, nearing the 5,600 mark. Computer-driven program selling then kicked in, dragging the Dow to a 20-point loss by midafternoon. From there the market inched higher, maintaining a pattern of rallying into the close that has prevailed all week.

In the broad market, winners edged losers by 1,219 to 1,122 on the New York Stock Exchange in continued heavy trading.

The Standard & Poor’s 500 index rose 0.30 point to a record 656.37. The Russell 2,000 index of smaller stocks added 0.65 point to a record 321.12.

Analysts noted that the market overall has advanced dramatically in recent weeks even as investors’ preferences have continually shifted back and forth between industrial stocks--which would benefit from an economic pickup--and consumer staple-goods stocks, which tend to hold up better in weak economies.

“There is this yin and yang, push and pull, between whether we should be defensive because the economy is rolling over or whether we should buy economy-sensitive stocks because the rate cuts will help earnings,” said Michael Jamison, money manager at Brandywine Asset Management, which manages $4.5 billion.

Last week the staple-goods stocks such as Coca-Cola, Philip Morris and McDonald’s helped power the Dow’s 167.63-point gain for the week. Meanwhile, many industrial shares lagged.

Many analysts say that the shifting leadership among the stock groups isn’t necessarily troubling, and that it may simply reflect that mutual fund managers are loaded with cash from individual investors and buy whatever begins to appear too far out of favor.

The Investment Company Institute, the mutual funds’ chief trade group, estimated last Wednesday that Americans had invested a net $24.5 billion in stock funds in January, a record amount.

Meanwhile, the bond market also set a positive tone last week, as yields ended Friday lower than a week earlier. The market seemed to breathe easier with the Treasury’s completion of its quarterly refinancing, which raised $44.5 billion through sales of new 3-year, 10-year and 30-year securities.

The yield on the new 30-year T-bond ended Friday at 6.09%, down from 6.16% a week ago. The 3-year T-note yield was at 4.99%, down from 5.02% a week ago.

Elsewhere, gold continued to fade after a powerful January rally. The February gold futures contract on the Comex lost $3.50 to $405.60 on Friday. It dropped $9.10 for the week.

Among Friday’s highlights:

* Some oil stocks came back into favor, helping the Dow index. Chevron gained 1 3/4 to 54 3/4, Texaco rose 3/8 to 81 1/2, Phillips gained 1 to 33 5/8 and Atlantic Richfield jumped 1 3/8 to 116 1/4.

* Consumer stocks continuing to advance included Colgate-Palmolive, up 3 5/8 to 79 3/4; Procter & Gamble, up 1 3/4 to 87 3/4; and PepsiCo, up 7/8 to 64 3/4. Also, Warner-Lambert surged 5 3/4 to 98 3/4 on vague takeover rumors.

* Tech stocks were mixed. Cisco Systems surged 2 3/8 to 91 1/4 after a strong earnings report, but Micron Technology lost 1 1/8 to 38 3/4 and Oracle slipped 1 1/8 to 49 1/8.

* Weak industrial stocks included Chrysler, off 1 to 55 3/4; Alcoa, down 5/8 to 56 3/8; Dana, down 1 3/8 to 31 3/4; and Tenneco, off 1 to 54 3/4.

Overseas, most major markets were lower. Foreign stocks last week lost much of the momentum that had characterized January.