Stocks closed narrowly mixed in heavy but choppy trading Friday as the market got caught "between a rock and a hard place" - a surprisingly strong employment report and a break in the bond-market rally that sent yields rising.

The Dow Jones industrial average, which retreated 5.13 points Thursday, edged up 5.67 points to 3404.58. The key barometer had been up more than 30 points earlier in the session.Among the broad gauges, the New York Stock Exchange composite index eased 0.54 to 245.99, while Standard & Poor's 500-stock index slid 1.23 to 446.11. The price of an average share lost 8 cents.

Declines outpaced advances 971-929 among the 2,493 issues crossing the NYSE tape, snapping the 11-day winning streak of advancing issues.

Final floor volume amounted to 253,480,000 shares, compared with 234,220,000 in the same period Thursday.

Prices ended slightly higher on the American Stock Exchange and in over-the-counter trading.

Treasury securities finished with modest losses, while the U.S. dollar ended with modest gains.

The dollar changed hands in late New York trading at 1.6690 German marks and 117.60 Japanese yen, up from late Thursday's rates of 1.6420 marks and 116.90 yen.

In overseas stock trading, the Tokyo market closed mixed, while all major European exchanges except Frankfurt rebounded. London's blue-chip Financial Times 100-stock index rose 17.3 points to a record high of 2,922.1 in a buying frenzy ignited by hopes of lower British interest rates.

Alfred Goldman, market strategist at A.G. Edwards & Sons Inc. St. Louis, said U.S. stocks weakened in late trading because of sell programs and the fact that the market seemed "a little tired and needed a rest" following its recent rally.

Wall Street had "a very split personality today," Goldman said, explaining that an unexpectedly strong U.S. employment report appeared "good for economy-sensitive stocks, but the broad list never participated."

Goldman also said the bond market managed to make a remarkable recovery from an initial sharp decline because "you don't kill that kind of momentum." The bond market had been rallying on hopes that President Clinton's economic plan will reduce the budget deficit.

Joseph Barthel, director of investment strategy at Fahnestock & Co. in Great Neck, N.Y., said that despite the positive employment report, the stock market remained hesitant because "it's a little bit disconcerting to see a sharp drop in bond prices. On top of that, we have the White House saying it will go ahead with its economic plan."

Labor Secretary Robert Reich told a news conference that while President Clinton felt "encouraged" by February's jobless report, the administration would not withdraw its economic-stimulus package.

Barthel said the market, aside from being "caught between a rock and a hard place . . . is moving toward an overbought condition, and may begin another consolidation" following its recent big gains.

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Analysts said stocks opened narrowly mixed, with players stuck between February's surprisingly strong employment report and a sharp decline in bond prices that sent the long bond's yield soaring to 6.83 percent from Thursday's record low of 6.73 percent.

Shortly before the market opened, the Labor Department said the nation's unemployment rate dipped from January's 7.1 percent to 7 percent in February and nonfarm jobs expanded by 365,000 jobs - the largest rise since January 1989.

Economists had expected non-farm jobs to increase 135,000 and the jobless rate to remain unchanged at 7.1 percent.

On the NYSE trading floor, Wal-Mart Stores paced the Big Board actives, easing 1/8 to 323/4. Its stock fell Thursday after saying sales in February were flat compared with the same period last year.

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