The stock market bailed out of steep losses twice on Friday to ended marginally lower, as bond and currency prices were whipsawed by events in Washington.

Blue chip stocks recovered the most. The Dow Jones industrial average, off as much as 38 points, finished down 3.25 to close at 4,764.15. Declining issues led advancers by more than 2 to 1 on the New York Stock Exchange, where volume was moderately heavy at 370.79 million shares as of 4 p.m. compared with 367.02 million on Thursday.The broader market ended lower. The NYSE's composite index fell 0.83 to 311.88. The Standard & Poor's 500-stock index fell 1.27 to 581.73.

The Nasdaq composite index fell 5.12 to 1,053.39. At the American Stock Exchange, the market value index fell 3.54 to 547.90.

Stocks and bonds dropped sharply at the opening, responding to an early Commerce Department report that American businesses plan to increase their investment in plants and equipment by 9.4 percent this year, the fourth straight annual advance.

Analysts concluded from the Commerce Department survey that the economy was too strong to warrant a lowering of interest rates by the Federal Reserve at its policy meeting Tuesday.

"Economic news suggests a robust economy for six to nine months," said John Shaughnessy, research director at Advest Research. "That suggests that the Fed is not going to lower short-term rates. It's obviously giving the bond market problems, and working to hurt the stock market."

Stocks and bonds trimmed their losses after Alan Greenspan, the chairman of the Federal Reserve, told the Senate Banking Committee that the risks of inflation and recession have lessened. That prompted some speculation that the Fed would in fact ease credit.

Stocks also were pressured by worries about a possible deadlock between Congress and the White House on financing the government and authorizing continued federal borrowing in the fast-approaching fiscal year, which begins Oct. 1.

In addition, stocks reacted to the volatile dollar, which started the day lower but recovered later.

Finally, stocks were helped by a drop in commodities prices. Rising commodity prices Thursday raised worries about rekindling inflation and dampened stocks. The Knight-Ridder Commodities index fell 2.47 Friday to 242.61.

Stock investors did not appear to count on an economic boom. They shed cyclical stocks that tend to perform well during good economic times.

The 30 Dow industrial components were led lower by such cyclical names as Boeing, down 11/8 to 701/8, and followed by Alcoa, down 7/8 to 531/8; Eastman Kodak, off 3/4 to 581/4; and United Technologies, off 3/4 to 391/4.

Investors, instead, bought consumer and growth stocks - issues that tend to have steady earnings even during economic downturns. Drug stocks, for example, did well, with Merck, a Dow industrial component, gaining 1 to 571/2.

Also among the Dow industrials, Coca-Cola rose 11/8 to 705/8; General Electric rose 7/8 to 63; and Procter & Gamble added 1 to 765/8.

Meanwhile, technology stocks, which have been market leaders to the upside this year, continued a recent downward move. IBM fell 1/2 to 937/8 on the Big Board. Intel lost 41-64 to 601/2 in Nasdaq trading.

"Technology stocks seem to be in the midst of giving up some of their leadership to classic defensive issues," said James Meyer, research director at Janney, Montgomery Scott in Philadelphia. "I can't imagine that bodes well for the market, or for the economy."

Overseas stock markets fell, with Tokyo's Nikkei index giving up 1.78 percent, the DAX index in Frankfurt losing 3.30 percent, and the FT-SE 100 index in London off 1.21 percent.