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Stocks closed with slim gains in fairly active trading Friday after a rally fueled by encouraging news on inflation lost steam when investors took profits ahead of the weekend.

The Dow Jones industrial average, which regained 8.29 points Thursday, added 2.85 points to 3354.36. The key barometer was up about 30 points in early trading.Among the broad gauges, the New York Stock Exchange composite index edged up 0.41 to 225.51 and Standard & Poor's 500-stock index rose 0.71 to 409.76. The price of an average share gained 6 cents.

Advances swamped declines 1,009-639 among the 2,234 issues crossing the NYSE tape.

Adjusted volume amounted to 181,830,000 shares, compared with 192,940,000 in the same period Thursday.

Stocks ended slightly higher in tandem with Big Board issues on the American Stock Exchange and in over-the-counter trading.

Key U.S. government securities were off highs, with the 30-year bond ahead 6/32 to 101-19/32 for a yield of 7.86 percent, down from 7.88 percent late Thursday.

Traders said prices of bonds and notes pulled back from opening highs because of a lack of follow-through buying at the higher levels.

Bonds rallied at the opening on news of mild inflation on the consumer level, pushing the bellwether long-term bond ahead 21/32 to 102-2/32 for a yield of 7.82 percent.

"It's normal profit-taking," Alfred Goldman, market strategist at A.G. Edwards & Sons Inc. in St. Louis, said of the late selling that nearly erased a 30-point surge shortly after the market opened.

He said the positive Consumer Price Index "offset the disappointing PPI (Producer Price Index) yesterday. The outlook for inflation is positive, but I expect some backing and filling on Monday with an upside bias at the end of the week."

"The market had a dull drift later on," he said, referring to the pace of trading, which dwindled as the day progressed.

Goldman said the market looked like "a middle-aged bull. It doesn't have the vigor of a teenager."

"The late rally in the blue chips on Thursday set the stage for this morning's strong opening," said Hildegard Zagorski, vice president for national sales at Prudential Securities Inc.

"Then, we got some good news on inflation," she said. "But I think it's more of a technical snapback. How far this rally could go, I don't know. It could run out of steam very soon. This market is still in a downtrend."

Zagorski cautioned earlier in the day the rally could "attract some profit-taking. If not today, then on Monday."

Analysts said the market opened higher as encouraging news on inflation in May helped extend Thurs-day's late blue-chip rally.

They said the market got an additional boost from a rally in the bond market, enabling Wall Street to brush aside the downward pressure from mostly weak overseas markets.

Shortly before the market opened, the Labor Department said consumer prices rose a slim 0.1 percent in May - the smallest price increase since January as inflation remained under control. Economists had expected a 0.3 percent rise.

The slight May increase in the Consumer Price Index follows increases of 0.2 percent in April, 0.5 percent in March, 0.3 percent in February, and 0.1 percent in January.

The CPI report was released a day after Labor issued a survey showing prices wholesalers paid for goods in May rose 0.4 percent - the largest increase since October 1990 and higher than the 0.3 percent economists had anticipated.

On the trading floor, Unisys paced the Big Board actives, easing 1/8 to 85/8. Its $300 million issue of convertible notes was priced to yield 8.25 percent.

Banco Comercial Portugues SA followed, closing at 161/4 on its initial trading. The major Portuguese bank's offering of 6.5 million American Depositary Shares was priced at $15.44 per ADS.

Among some of the blue chips, Philip Morris climbed 17/8 to 741/4, Merck was unchanged at 491/4, and Minnesota Mining & Manufacturing gained 11/4 to 961/2 after its board authorized late Thursday the repurchase of up to 6 million common shares.