Stocks finished on a down note Friday, as the busiest week of trading in Wall Street history--and one of the most volatile--came to an end amid fresh concern about corporate profits.
Meanwhile, a mutual fund tracking service said the outflow from stock funds totaled $4.04 billion in the week ended Wednesday, the biggest since at least January 1992.
On Wall Street, the Dow Jones industrial average eased 37.36 points to 5,426.82 on Friday, ending three days of gains that followed a spectacular market plunge from Monday through midday Tuesday.
For the week the Dow lost 83.74 points, bringing its net decline from its record high of 5,778.00 on May 22 to 351 points, or 6.1%.
Broader indexes also fell on Friday. The Nasdaq composite index of mostly smaller stocks dropped 12.14 points, or 1.1%, to 1,097.68. Its net loss for the week came to just 0.5%, but the index remains down 12.5% from its 1996 peak.
"I'm glad this week is over," said Hildegard Zagorski, analyst at Prudential Securities in New York. "It was a wild week with lots of gyrations--quite dramatic, quite scary."
Slammed anew by worries over rising interest rates and weakening corporate profits, the Dow had plummeted 161 points on Monday and was off 167 more points by midday Tuesday before rocketing back to close slightly higher on the day as buyers finally emerged.
Helped by falling bond yields and by some better-than-expected corporate earnings reports, the Dow rebounded 18.12 points on Wednesday, then 87.30 points on Thursday before sellers took control of the market again on Friday.
Analysts attributed much of Friday's weakness to another rise in bond yields and to some disappointing earnings reports.
In the bond market, where the yield on the benchmark 30-year Treasury bond had slid from 7.02% to 6.92% on Thursday after Federal Reserve Board Chairman Alan Greenspan hinted that the central bank may not necessarily raise interest rates soon, yields rose on Friday as some bond traders reconsidered their interpretation of Greenspan's remarks. The T-bond ended at 6.97%.
Greenspan, some analysts said, was explicit that without an economic slowdown soon, the Fed will in fact tighten credit.
"We've had the view that the Fed would raise interest rates, and we don't see any need to change," said Edward McKelvey, senior economist at Goldman Sachs.
In one sign of the extent of investors' nervousness this week, AMG Data Services said investors pulled $4.04 billion out of stock mutual funds in the week ended Wednesday, the biggest withdrawal since at least January 1992.
But the total was tiny relative to stock funds' $1.5 trillion in assets. Moreover, many fund companies say investors had become net buyers of funds again by Wednesday and Thursday.
Among Friday's highlights:
* Breadth turned negative again, with falling stocks outnumbering winners 14 to 10 on the New York Stock Exchange and 21 to 17 on Nasdaq. Trading was moderate, though for the week as a whole 2.5 billion shares changed hands on the NYSE, the most ever.
* Tech stocks weakened again after earnings reports from some key companies failed to excite investors. Among firms reporting results, Sun Microsystems fell 3 7/16 to 55, Netscape lost 3 1/2 to 53 and Iomega dropped 5 1/2 to 22 1/2.
Other tech issues falling included Xylan, down 6 3/4 to 39; Cisco Systems, down 2 1/8 to 51 3/4; and IBM, off 1/2 to 93 3/4.
* Airline stocks exhibited continued weakness in the aftermath of the TWA plane crash off Long Island, N.Y. AMR, parent of American Airlines, fell 2 3/8 to 78 3/4; Delta was off 2 1/8 to 72 3/4; and TWA slipped 3/4 to 9 1/2.
* On the plus side, some classic consumer growth stocks rose, including Gillette, up 2 1/2 to 63; Merck, up 1/4 to 64 5/8; and Amgen, up 7/8 to 56 1/4.
Market Roundup, D3