Yields Up, Stocks Mixed Awaiting Jobs Report

Bond yields rose and stocks finished mixed Thursday as traders awaited today’s November employment report and other economic data.

In other markets, battered Asian stock markets rebounded sharply after South Korea agreed to tough terms for a $55-billion international bailout, the dollar rose to its highest level against the Japanese yen since May 1992, and gold dropped to a new 12 1/2-year low.

On Wall Street the Dow Jones industrials added 18.15 points to 8,050.16, the fifth consecutive gain for the blue-chip index, lifting it to its highest level since Oct. 21.

In the broad market winners topped losers by 16 to 14 on the New York Stock Exchange and by a tiny margin on Nasdaq.

But many key indexes closed lower nonetheless, with the Nasdaq composite off 1.71 points to 1,613.42 and the Standard & Poor’s 500 easing 3.67 points to 973.10.

The S&P; 500 hit a record during trading, reaching 983.36 at one point, which surpassed the closing high of 983.12 on Oct. 7.

But the index fell back as bond yields rose in the afternoon, after dipping to new 22-month lows in late morning. The 30-year Treasury bond yield ended at 6.04%, up from Wednesday’s 6.01%.

Bond traders cited nervousness ahead of today’s November employment report. A larger-than-expected number of new jobs could reignite worries about the U.S. economy’s growth and the tight labor market in many regions.

Federal Reserve Board Chairman Alan Greenspan has warned that rekindled wage inflation could force the central bank to tighten credit, to slow the economy.

But in the wake of the Asian economic crisis many analysts believe the Fed won’t raise rates in the near future even if the economy’s pace remains strong.

Still, depending on the strength of today’s data, “We could go through 6% [or] we could also find ourselves back at 6.1%” on the long-term T-bond, said David Berry, who oversees $30 billion in bonds at Lincoln National Corp. in Fort Wayne, Ind.

One economic report Thursday should have helped allay concerns about the tight labor market: Revising an earlier estimate, the government said U.S. productivity improved 4.1% in the third quarter. That was down from an original estimate of 4.5%, but still the largest gain in nearly five years.

Improving productivity has been pivotal in pushing inflation to a three-decade low by enabling employers to boost wages without raising product prices.

Elsewhere Thursday, beaten-down Southeast Asian markets surged after South Korea reached agreement with the International Monetary Fund on a bailout.

The main Korean stock index soared 7% to 405.81, while the Malaysian market surged 5.1% and the Thai market jumped 3%. Early the rally continued, as Korean shares gained 6.9% and Indonesian shares rose 2.6% by midday.

Among Thursday’s U.S. highlights:

* Many bank stocks were strong, led by Wells Fargo, which soared as high as $350, then closed up $15.81 at $332.06 after the firm’s chief executive said Wells would consider a buyout offer if one came its way.

Also gaining were Citicorp, up $5.75 to $135.50, and Chase Manhattan, up $2 to $116.75, as Asian worries calmed.

* Merck led the Dow index higher, soaring $6.63 to $104.63 one day after the drug giant issued a bullish earnings outlook.

* In the tech sector Ascend Communications jumped $3.25 to $26.88 on takeover rumors that mentioned Lucent Technologies as a possible bidder.

In currency trading the dollar rose to a fresh 5 1/2-year high against the yen, reaching 129.39 yen, after downbeat economic forecasts from Japanese officials sent Tokyo shares down 1.7% and the yield on 10-year Japanese government bonds to a record low of just under 1.6%.

Gold prices continued to dive, as buyers remained unwilling to step in. The near-term futures contract in New York sank $6.10 to $286.50 an ounce, a 12 1/2-year low.

Market Roundup, D7