Investors’ Worries Bring Bad Luck

The Dow Jones industrials closed a volatile Friday the 13th session with a tiny gain, but the broader stock market buckled under profit-taking for the second day in a row. Nervous investors continued to sell to lock in recent gains before year-end.

The Dow Jones industrial average ended the day with a gain of 1.16 at 6,304.87. It first fell more than 50 points early in the day, erased those gains by late morning and then swung widely throughout the rest of the session. For the week, Wall Street’s best-known indicator was down 77.07 points this week.

Stocks fell Friday despite a rising bond market, where the 30-year bond added more than $5 for each $1,000 in face value and its yield - which moves in the opposite direction - fell to 6.57 percent from 6.62 percent late Thursday.

“I would have expected a much better performance from stocks given the strength of bonds today,” said Hugh Johnson, the market strategist at First Albany Corp.

Johnson said Friday’s disappointing showing, after a backup in prices on Thursday, means “investors” moods have changed, and they have once again become very, very worried, very, very cautious.”

Some analysts blamed lingering concerns about Federal Reserve Chairman Alan Greenspan’s questioning last week whether stocks are overvalued.

If Greenspan was trying to say the central bank would raise interest rates soon in a bid to cool down the economy and brake the stock market, then stocks are “fiendishly overpriced,” said Michael Metz, a market strategist at Oppenheimer & Co.

Declining issues led advancers by 11 to 8 on the New York Stock Exchange, where volume was moderate at 454.46 million shares, down from Thursday’s pace.

Broad market indexes fell, led by a sharp drop in software and semiconductor issues. The Standard & Poor’s 500-stock index fell 0.66 to 728.64, and the NYSE’s composite index fell 0.22 to 384.07.

The Nasdaq composite index fell 13.42 to 1,284.91, and the American Stock Exchange’s market value index fell 3.05 to 576.06.

The Dow opened lower in continuation of Thursday’s aggressive sell-off, which pushed the blue-chip index down more than 98 points.

It bottomed out at around 10 a.m. after reports that the University of Michigan’s consumer sentiment index has fallen early this month.

The data signaled that consumers may not spend so freely during the holiday season, and it was good news to bond investors, who worry that overspending could cause inflation and prompt the Federal Reserve to raise interest rates.

Also at 10 a.m., the Commerce Department said business inventories rose 0.5 percent in October, the biggest growth in three months.

Foreign stock markets fell with Wall Street. The Nikkei index in Tokyo declined 0.78 percent, the DAX in Frankfurt ended down 1.66 percent, and the FT-SE 100 index in London lost 0.46 percent.