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STOCKS CLOSE MIXED IN HEAVY TRADING

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Stocks closed narrowly mixed in heavy but choppy trading Friday as late buy programs and stable bonds helped the market recover from bouts of sell programs apparently tied to next week's final "triple-witching" of the year.

The Dow Jones industrial average, which plunged 49.79 points Thursday, edged up 5.38 points to 3691.11.The Dow was down about 20 points a half hour before the close after additional computer-driven sell programs sent the key barometer falling about 26 points in mid-afternoon trading.

The Dow transportation also edged up 3.49 points to 1380.97 but still closed at a two-year low for the third straight day.

The New York Stock Exchange composite index edged up 0.37 to 244.17, while Standard & Poor's 500-stock index rose 1.51 to 446.96. The average price of a share gained 4 cents.

Declines outnumbered advances 1,353-884 among the 2,890 issues crossing the NYSE tape.

Adjusted volume eased to 336,119,000 shares from 362,285,000 in the same period Thursday.

Prices ended slightly lower on the American Stock Exchange and marginally lower on the Nasdaq Stock Market.

Both Treasury securities and the U.S. dollar finished mixed.

The dollar changed hands at 1.5771 German marks and 100.11 Japanese yen, compared with 1.5767 marks and 100.49 yen late Thursday.

The bellwether 30-year Treasury bond, which climbed 11/32 Thursday to yield 7.85 percent, rose 5/32 to 95 28/32. The issue's yield, which moves in the opposite direction of its price, was 7.85 percent.

Traders said the bond market continued to benefit from asset shifting from equities to bonds and from the flow of money out of municipal securities and into Treasurys.

In overseas trading, the Tokyo stock market closed sharply lower following Thursday's sharp sell-off on Wall Street.

Wall Street's woes also forced London to retreat and Frankfurt and Paris to lose further ground.

As for Wall Street, Alan Ackerman, executive vice president at Reich & Co., said the market recouped most of its earlier losses with the help of late buy programs and stable bond prices, which "allowed some investors to look for bargains."

Ackerman called trading "choppy and sloppy" but said he felt "encouraged that the market was able to stabilize" after spending most of the week in negative territory.

But he cautioned that "the selling appeared not to be over" because of lingering "concerns about higher interest rates and further damage from the Orange County bankruptcy."

In view of such concerns and next Friday's "triple-witching," he said that "next week will be a test to the market's mettle."

The analyst referred to the quarterly expirations of stock-index futures and options and options on individual stocks on the same day, an event that usually causes volatility in the stock market and inflates volume.

Trude Latimer, vice president and chief market strategist at Ferguson Andrews & Associates Inc. in Charlottesville, Va., attributed some of the selling to concerns about the implications of Orange County's financial woes and prospects for higher interest rates.

"Investors are still trying to get a handle" on the County Orange sit-uation, she said.

But Latimer said she thinks most of the program trading this week was related to next Friday's "triple-witching."

She said program traders "were closing down their positions ahead of time because it's the end of the year. That's why we've had so much program activity and huge volume."

The analyst noted the market's improvement after Thursday's steep decline was led by semiconductor issues following a positive industry report.