Stocks closed mostly higher in very heavy trading Friday as a late burst of buy programs tied to "triple-witching" helped the market recoup nearly all its losses fueled by a bond sell-off on jitters about another interest rate hike.
The Dow Jones industrial average, which rebounded 16.99 points Thursday, climbed another 30.51 points to 3895.65 - its highest level in more than three weeks.The New York Stock Exchange composite index edged up 0.24 to 261.35, while Standard & Poor's 500-stock index inched up 0.16 to 471.06. The average price of a share gained 4 cents.
The Nasdaq composite index inched up 0.08 to 803.93 for its second straight record close.
Declines and advances were almost even at 1,082-1,059 among the 2,771 issues crossing the NYSE tape.
Adjusted volume ballooned to 446,361,000 shares - the fourth-biggest floor volume ever. It nearly matched the third-highest total of 449,350,000 reached on Oct. 21, 1987 - two days after the stock market crash. On Thursday, volume only reached 303,883,000.
The NYSE said the opening floor volume of 182,410,000 shares was a record.
The bloated volume resulted from program trading related to Friday's "triple-witching hour" - the quarterly expirations of stock-index futures and options and options on individual stocks. The event usually causes volatility in the stock market.
Prices ended slightly higher on the American Stock Exchange and marginally higher on the Nasdaq Stock Market.
Treasury securities eroded further, while the U.S. dollar was slightly higher.
The bellwether 30-year Treasury bond, which fell 10/32 Thursday to yield 6.82 percent, was down another 31/32 to 91 22/32. The issue's yield, which moves in the opposite direction of its price, was 6.91 percent.
Although a White House adviser insisted there was "no discussion whatsoever" of next week's meeting of the Federal Reserve's policy-making body during a meeting between President Clinton and Federal Reserve Chairman Alan Greenspan Friday morning, traders said the unusual meeting itself was enough to cause concern in the marketplace.
There has been widespread speculation that the Fed will again tighten credit at next week's meeting of its policy-making body, the Federal Open Market Committee.
Some Fed officials had indicated recently that the 25-basis-point rise in short-term interest rates on Feb. 4 was not sufficient to keep inflation from rising. The rate hike was minimal but it was enough to send stocks and bonds reeling.
In overseas trading, the Tokyo stock market slipped further on profit-taking ahead of a three-day weekend. Japanese markets will be closed Monday for a holiday.
The major European exchanges retreated on concerns over the direction of interest rates.
On Wall Street, Michael Metz, chief investment strategist at Oppenheimer & Co., said expiration-related computer-guided buy programs "in the last half hour definitely helped the Dow and the blue chips, particularly the cyclicals."
He said "serious investors stepped aside to let the program traders dominate the session," which he described as "nervous and volatile."
Noting the sharp drop in bond prices, he said the bond market obviously "did not believe that interest rates were not discussed" during the White House meeting.
Metz said he thinks the Federal Reserve "is in a no-win situation. If it does not act to raise interest rates, it means it's giving up its battle against inflation. If the Fed does raise rates, bonds and stocks will fall."
On the NYSE trading floor, Hanson Plc paced the Big Board actives, easing 1/8 to 21.
Wal-Mart Stores followed, sliding 1/4 to 27.
The Amex Market Value Index rose 2.33 to 472.96, while the average price of an Amex share added 6 cents. Advances led declines 333-272 among the 810 issues traded. Volume rose to 23,239,000 shares from 21,637,000 traded Thursday.
Exploration Co. of Louisiana led the Amex actives, ending unchanged at 11/4.
On the Nasdaq, advances edged declines 1,195-1,119 among the 3,443 issues traded.