Strong Start Fizzles; Dow Closes Down 13.03

Stocks were mixed Friday after a strong start in a session marked largely by technical influences related to expiring stock and index options.

There was no economic news to shape trading, but “double witching” expirations caused a flurry of activity on the opening and at the close.

Stocks seesawed in and out of positive territory before ending on a familiar note: Blue chips fell and technology and small cap stocks strengthened, pushing the Nasdaq and American Stock Exchange indexes to record closes.

The market has followed the same pattern for the last three consecutive sessions. Investors, worried that a stronger dollar will erode earnings at multinationals, have dumped blue chips in favor of shares of companies with less exposure to foreign markets.

The Dow Jones industrial average fell 13.03 to 4,617.60.

Broad-market indexes finished higher. The New York Stock Exchange’s composite index rose 0.16 to 299.79. The Standard & Poor’s 500-stock index rose 0.17 to 599.21.

Advancers led decliners by 9 to 8 on the Big Board. Volume totaled 312.03 million shares as of 4 p.m., vs. 354.13 million on Thursday.

Though the dollar continued to weigh on investors’ minds, analysts attributed most of the action to “double witching” expirations. They can produce wide price swings that have no link to the market’s overall direction.

Stocks rose quickly following the opening, fell later on as traders hunted for bargains, and briefly visited positive territory before closing lower. Many blue chips registered sell imbalances in the minutes preceding the close.

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

NYSE

Upjohn, up 3-3/8 to 39-5/8. The company is rumored to be in merger talks with Pharmacia AB, a Swedish drug maker.

Rhone-Poulenc Rorer, down 1-1/4 to 42-1/8. The French pharmaceutical maker launched a hostile $2.6 billion bid for the British drug maker Fisons PLC.

Fisons PLC American Depository Receipts, up 5 to 16-3/4. The company rejected Rhone-Poulenc Rorer’s takeover offer and said it was too low.

Grand Union, up 2-1/4 to 12-1/4. The grocery store company, which emerged from Chapter 11 in June, said it earned $815.9 million in the second quarter after losing money in the year-earlier quarter.

NASDAQ

Cisco Systems, up 5-15/64 to 66-7/64. The computer maker reported a 60 percent jump in second-quarter net income, beating Wall Street estimates.

Dell Computer, up 1-7/8 to 76-1/8. On Thursday the PC maker reported that second -uarter earnings doubled for the year-earlier quarter.

America On-Line, down 1-5/8 to 71-3/8. The company asked 250 workers to relocate and take a pay cut.

AMEX

Hawaiian Airlines, up 1/2 to 4-1/4. The carrier said second-quarter losses were less than the year-earlier period and reported that July traffic rose 17 percent.