Stock prices ended mostly higher Friday, but the market was dogged by lingering worries that higher interest rates will weaken the economy.
Stocks sagged early in the day in tandem with bond prices and the dollar. The U.S. currency started out weaker in New York for the second consecutive session on concerns about U.S. trade talks with Japan. The dollar stabilized in the afternoon and helped pave the way for a recovery in bonds and stocks.The Dow Jones industrial average closed at 3,755.11, down 0.32 for the day and 13.6 for the week. But advancing issues edged out decliners by about 11 to 9 on the New York Stock Exchange, and broad market indexes were firmer.
The NYSE's composite index rose 0.32 to 255.81. The Nasdaq index rose 0.26 to 742.43, and the American Stock Exchange's market value index rose 1.90 to 445.45. The Standard & Poor's 500 list rose 0.51 to 463.68.
Big Board volume totaled 276.63 million shares, down from 284.98 million on Thursday.
For the third straight day, traders expressed concerns that last Tuesday's 0.5-percentage point interest-rate increase by the Federal Reserve will "slow the economy, impact consumer confidence and is likely to affect corporate earnings," said Alan Ackerman, executive vice president at Reich & Co., a New York investment concern.
In addition, analysts said the Fed tightening may not have been enough to subdue inflation, and that another increase could come again as early as next month.
That view was bolstered on Thursday, when the Dow average fell 21.05 to 3,755.43, after a regional economic survey done by the Philadelphia Federal Reserve bank aroused inflation fears. The survey, considered a barometer of other areas as well, showed a high incidence of rising prices.
The Dow Jones industrials did get a lift Friday from IBM, one of its components. Big Blue surged 17/8 to 681/8, the highest level since December 1992, after S.G. Warburg analyst David Wu raised his target price on the stock from 75 to between 80 and 85. Wu's action came a day after a Merrill Lynch raised its 1994 earnings projections for the leading computer maker.
IBM shares hit a new 52-week high for the third straight session.
But by and large the market in blue chip stocks was little changed.
`Not much can be expected in the way of serious buying or selling judgments," Ackerman said. "We're more subject to the spin of the wheel."
Telefonos de Mexico's American depositary shares led the most active issues on the NYSE and was up 1/2 at 651/2. The Mexican stock market rose amid optimism about Sunday's presidential elections in that country.
Cisco Systems led the action in Nasdaq trading and was down 7/8 at 225/8. The company's board on Thurs-day approved a buyback of up to 7 million shares. It also reported fourth-quarter net earnings of 34 cents per share, up from 21 cents a year ago and above the consensus estimate of 35 cents.
Overseas, stocks were mixed, with the Frankfurt and Tokyo markets settling lower, and London rising.