Weak Dollar, Bonds Drive Down Stock Prices

Stocks emerged from Friday’s session with minor losses, after recovering from a steep drop in the early going.

The Dow Jones industrial average plunged 60 points at the opening but clawed its way back up to a modest 14.87 point loss, closing at 4,157.69. The sharp early drop prompted the New York Stock Exchange to impose curbs on computerized trading, but the restrictions were later lifted as stocks recovered.

Declining issues edged out advancers by 5 to 4 on the New York Stock Exchange. Big Board volume was heavy at 352.95 million shares as of 4 p.m., but below the 362.03 million posted on Thursday.

Stocks followed bond prices throughout the session.

Bonds started out weaker, as the dollar continued to languish after Germany’s interest-rate cut on Thursday did little to rescue the flagging greenback.

Traders were disappointed that Japan did not follow with a rate cut of its own. They said coordinated easings by other central banks were crucial to rescuing the dollar.

Bond prices slid further in the morning, dragging stocks with them, after the Commerce Department revised its estimate of fourth-quarter growth in the nation’s gross domestic product to a blistering annualized rate of 5.1 percent. The GDP, the sum of all goods and services produced, increased 4.1 percent for all of last year.

Investors worried that the weak dollar and robust GDP figures could force the Federal Reserve to raise domestic interest rates, choking off economic growth and cutting into corporate earnings.

Some of the stocks that moved substantially or traded heavily Friday:

NYSE

Chrysler fell 3/4 to 41 7/8.

General Motors fell 7/8 to 44.

Ford fell 7/8 to 26 7/8.

Auto stocks fell after workers at a key Chrysler Corp. transmission plant walked off their jobs today in a strike that could quickly shut down the automaker’s car and truck assembly operations.

Barrick Gold rose 3/8 to 25.

Placer Dome rose 3/8 to 24 3/8.

Homestake rose 3/8 to 18 5/8.

Battle Mountain Gold rose 5/8 to 12.

Gold stocks rose as gold prices surged for the second consecutive session.

Motorola fell 5/6 to 54 5/8.

Advanced Micro Devices fell 3/8 to 33 7/8.

LSI Logic, down 3/4 at 53 1/4.

First Boston downgraded these three semiconductor issues, plus Intel, to “hold” from “buy.” Semiconductor issues have been in the front line of computer losses as fears have mounted that the stocks may have peaked.

NASDAQ

Intel fell 1/2 to 84 7/8.

Chipcom fell 1/4 to 37 3/4.

First Boston downgraded Intel and three other microchip stocks amid mounting concern that the issues, which have performed very well for the past six months, may be topping out.

AMEX

Interdigital Communications fell 6 1/8 to 5 7/8.

A Delaware federal court on Wednesday ruled against Interdigital in its patent suit against Motorola, and said Interdigital’s cellular patents were invalid.