Stocks Climb Despite Growth In Employment

Stocks rose Friday, led by economically sensitive and computer issues, following the bond market higher as investors shrugged off the inflationary consequences of the latest strong employment data.

The Dow Jones industrial average rose 16.49 to 3,867.41, its highest closing level since Oct. 31. The blue chip index added 32.97 for the week.

Stocks and bonds started the day lower after a stronger-than-expected employment report incited fears of inflation and higher interest rates. But the Dow recovered early and stayed in positive territory throughout the session, gaining as much as 37 points before trimming its gains by more than half.

Advancing issues led decliners by nearly 5 to 4 on the New York Stock Exchange. Big Board volume was moderately high at 308 million shares, down from 309.15 million Thursday.

The 30-year bond ended the day about 1/4 point higher, pushing its yield, which falls when prices rise, down to 7.85 percent from 7.88 percent Thursday.

The Labor Department said the nation’s unemployment rate declined to 5.4 percent in December from 5.6 in November. The economy added 256,000 jobs in December, which could provide incentive for the Federal Reserve to raise interest rates at its policy-making meeting later this month.

Overseas stock markets were mixed. Tokyo’s Nikki index fell 0.5 percent, and the DAX index in Frankfurt lost 0.4 percent. But London’s stock market put in a strong day, with the FT-SE 100 up 1.08 percent.

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

NYSE

Telefonos de Mexico fell 1 to 37.

Grupo Televisa fell 1 3/4 to 26 7/8.

Grupo Tribasa fell 3/4 to 12 3/8.

The American shares of Mexican companies declined again in heavy volume amid negative reaction to the country’s economic recovery plan and another steep drop in the peso.

IBM rose 1 1/8 to 75 1/8.

Computer stocks rose after a report that Apple Computer is a possible takeover target.

AT&T fell 1 3/8 to 48 1/4.

Sprint rose 1/2 to 27 1/8.

Telephone stocks reacted to investor concerns about a price war in the long-distance telephone market.

NASDAQ

Apple Computer rose 3 1/8 to 42.

Oracle Systems rose 1/2 to 42 7/8.

A computer trade magazine reported that three companies - Oracle, Philips Consumer Electronics NV and Matsushita Electric Industrial Co. - may be planning a takeover of Apple.

Dell Computer rose 1 1/2 to 45 1/8.

Intel rose 7/8 to 65.

Computer stocks rose on the Apple takeover story. Also, Microsoft Chairman William Gates said Christmas computer sales were strong.

Microsoft rose 1 to 60 5/8.

The software company confirmed it will release its Windows 95 in August, rebutting earlier reports of a further delay. The company said last month that introduction would be in August instead of in the spring.

AMEX

InterDigital Communications fell 1/2 to 7 7/8.

The company’s InterDigital Technology Corp. unit agreed to license its mobile telephone technology to Matsushita Electric, reportedly for $20 million.