Stocks End Wild Week on Upswing

Quietly ending a tumultuous week on Wall Street, stocks finished modestly higher Friday as investors assessed whether the market can sustain a rebound from its devastating plunge this year.

Tentative buying in the final hour lifted the Dow Jones industrial average 78.08 points, or nearly 1%, to 8,264.39. The advance helped the blue-chip index notch its best weekly gain since the onset of a brutal 10-week sell-off, fueled by scandal and disappointing earnings, that has depleted investors’ confidence.

Bargain hunting in the technology sector enabled the Nasdaq composite index to rise 22.04 points, or 1.8%, to 1,262.12. The benchmark Standard & Poor’s 500 index advanced 14.16 points, or 1.7%, to 852.84.

About three stocks rose for every two that fell on the New York Stock Exchange; winners outnumbered losers by almost 4 to 3 on Nasdaq. Trading volume was well below the records of recent days.

For the week, the Dow index gained 3.1%, its best showing since the week ended May 17, and the S&P; 500 edged up 0.6%. But Nasdaq fell 4.3%--its fourth straight weekly decline--and the tech- and telecom-laden index has lost a stunning 35.3% this year.

Gold, meanwhile, fell again to finish its worst week in 2 1/2 years. Another upswing by the U.S. dollar and the lull in the stock market’s rout further diminished gold’s appeal as a safe-haven investment, analysts said.

Underlying Friday’s modest gains on Wall Street were continued declines in some key sectors, such as semiconductors and wireless communications. Those losses tempered hopes that the market can build on its startling rally Wednesday, when the Dow soared 6.4% for its biggest one-day percentage gain since October 1987.

After a “climactic” week like this, it is not unusual to see activity slowing down as investors calculate their next moves, said Edward Nicoski, chief technical analyst at U.S. Bancorp Piper Jaffray in Minneapolis. For now, he said, “investors have no idea what to do.”

Indeed, investors face decidedly mixed signals as they guess whether the market has bottomed or will drop further. Many stocks were at five-year lows at midweek.

Although the dollar and blue-chip indexes have firmed--at least for now--consumers’ confidence in the economy has fallen sharply since June, according to a University of Michigan report Friday. Yet economists had expected an even steeper decline. This week the government reported June declines in durable goods orders and sales of existing homes.

Upbeat comments from Goldman, Sachs & Co. about semiconductor stocks helped some of those issues climb Friday. But the sector overall--as measured by the Philadelphia Stock Exchange’s chip-stock index--slipped nearly 1% to 315.01, lowest since 1998.

On the whole, the market’s ability to brake its plunge provided some solace after a wild week, in which stocks gyrated in response to passage of a landmark corporate reform bill, the arrest of insiders at Adelphia Communications on fraud charges and the bankruptcy filing by WorldCom.

And although skepticism abounds that the market can keep chalking up gains, some analysts see positive developments. Barton Biggs, chief global strategist at Morgan Stanley, said in a note to clients that bearish sentiment toward the market is so deep that “stocks around the world are poised for a powerful rally.”

The dollar’s firming this week also bodes well for stocks, Nicoski said. Investors around the world are heavy with cash, and with a stronger dollar, he said, “I think we’re going to see money come back into the U.S.,” with much of that cash funneled into stocks.

Among Friday’s highlights:

* Tyco International soared $3.78, or 46%, to $12.03 after the troubled conglomerate named Edward Breen, Motorola’s president, as chairman and chief executive. Motorola fell $1.28, or 11%, to $10.90.

* St. Paul Cos. advanced $2.80 to $27. The insurer’s planned sale of $760.1 million of securities eased concerns about a shortage of capital after the company postponed the sale of its reinsurance unit.

* Electronic Arts rose $2.64 to $58.36. The biggest U.S. maker of video game software earned 5 cents a share in the fiscal first quarter as it sold more games for personal computers and consoles. Analysts had forecast an 8-cent loss.

* Among tech giants, Microsoft rose $2.52 to $45.35, Oracle gained 32 cents to $9.33, and Intel added 33 cents to $17.81.

But IBM dropped $2.95 to $66.40 and was the biggest drag on the Dow and S&P; 500. The loss resulted from speculation the company faces weak PC demand and has underfunded its pension fund.

*

Market Roundup, C4-5

*

Times wire services were used in compiling this report.