Dow Rises Past 9,000 But Fails To Hold Gains

The stock market made a run for 9,000 on Friday but ended mixed, despite a sharp drop in bond yields on the heels of the weak March employment report.

The Dow Jones industrials traded as high as 9,030.49 but faded in the final two hours and ended at 8,983.41, off 3.23 points for the day.

Broader market indexes were mixed. The Standard & Poor’s 500 gained 2.69 points to a record 1,122.70, but the Russell 2,000 index of smaller shares eased 0.64 point to 485.79.

Winners topped losers by 15 to 14 on the Big Board, while losers had a tiny edge on Nasdaq.

Stocks started the day with a rally after the government said the economy lost a small number of jobs in March--suggesting that the nation’s growth rate is slowing from the strong pace of recent quarters. (See story, A1)

The news triggered an immediate drop in bond yields on the expectation that a weaker economy will reduce credit demand and inflation pressures.

Yields fell across the board. The 30-year Treasury bond ended at 5.79%, down from 5.84% on Thursday and the lowest since Jan. 15. The 2-year T-note yield fell to 5.43% from 5.52% Thursday.

But stocks quickly sold off in the morning before mounting an afternoon rally that also mostly reversed itself by the close.

The Dow’s failure to close above 9,000 wasn’t a surprise to some analysts. “The market has to test these 1,000-point marks a couple times before they stick,” said Paul Hennessey, head trader at Boston Partners Asset Management.

The Dow topped the 8,000 mark on July 16 of last year.

Analysts noted that despite Friday’s relative weakness, the market scored major gains for the week. The Dow rose 187.33 points, or 2.1%, while the Nasdaq composite was up 1.7%. Year-to-date the Dow index now is up 13.6%.

Some experts worry that the U.S. equity market could be threatened by a renewed downward spiral of stock markets and currencies in Asia, given Japan’s deepening woes. (see story, D1)

Fears of spreading trouble hit Latin American markets on Friday. Mexico’s main stock index fell 1.1%, while Brazil’s dropped 1.9%.

What’s more, the soaring dollar--which hit a seven-year high against the Japanese yen on Friday--will make business more difficult for U.S. multinational companies by raising the cost of their exports and cheapening imports.

A more immediate concern is first-quarter corporate earnings reports, which will begin flowing out in another week or so.

Still, many analysts believe stocks could continue to rise, especially if bond yields go lower.

“The bias of the market is still up,” said Michael Manns, a money manager at American Express Asset Management, which oversees $32 billion.

Among Friday’s highlights:

* Brokerage stocks zoomed after Citicorp Chairman John Reed reportedly said he’s intrigued by the possibility of acquiring Merrill Lynch. Merrill shares jumped $2.56 to $86.50, while Citicorp added 6 cents to $142.88.

Other brokerage and financial services winners included PaineWebber, up $1 to $41.69; American Express, up $4.50 to $99; Donaldson, Lufkin & Jenrette, up $1.63 to $87.69; and Morgan Stanley Dean Witter, up $1.56 to $75.44.

* Earnings jitters kept many stocks in check. Oracle fell $2 to $28.13 after the software giant told analysts to lower their expectations for near-term earnings growth. Viasoft sank $9.31 to $18.06 on its earnings warning.

* Big-name stocks still showing strength included Walt Disney, up $2.06 to $110.94; Ford, up $1.94 to $65.25; Warner Lambert, up $5.06 to $184; and Lucent Technologies, up $3.44 to $72.88.

Market Roundup, D4