Dow Rebounds From Early Sell-Off, Edges Up

Stocks ended mixed Friday as buying by bargain hunters failed to offset widespread frustration with the federal budget stalemate.

The Dow Jones industrial average gained 7.59 to finish at 5,181.43 after bailing out from a 40-point deficit that some analysts attributed to computer-driven program trading. Broader market indexes finished mixed.

“It was a tug of war between people who think there’ll be a correction and those who view this as a buying opportunity,” said George Pirrone, senior trader at Dreyfus Corp.

Stocks rebounded from an early sell-off on news that congressional Republicans had agreed on a proposal that would end the 3-week-old government shutdown.

That optimism quickly faded without any sign of progress in the months-long battle on federal spending between the White House and Republican leadership in Congress.

“Everybody’s still waiting on the budget,” said Elizabeth Mackay, market strategist at Bear Stearns & Co. But she said an end to the government shutdown would be encouraging because it was “starting to have some effect on private sector.”

Declining issues barely led advancers on the New York Stock Exchange, where volume was moderately heavy at 433.35 million shares, behind Thursday’s pace.

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

NYSE

Sears, Roebuck, up 1-1/2 at 42.

The company added to Thursday’s gains on positive December sales data after Standard & Poor’s said it might upgrade its investment rating on some of the retailer’s bonds and preferred stock.

Exxon, up 2 to 83-3/8.

Mobil, up 2-3/4 to 117-7/8.

Texaco, up 1-5/8 to 80-7/8.

Oil stocks continued to improve on strength in crude prices due to cold weather.

Duracell International, up 3-7/8 at 47-7/8.

The battery maker said its earnings for the justended quarter will fall below analyst expectations.

Ford Motor, down 5/8 at 29.

News reports said a new version of Ford’s pickup trucks can’t be sold until the federal government shutdown is ended because the Environmental Protection Agency won’t be able to certify the vehicles’ fuel economy.

NASDAQ

Adobe Systems, down 16-1/4 at 42-1/4.

The software developer was downgraded by Alex. Brown & Sons and Hambrecht & Quist after Thursday afternoon’s report of a slight gain in fourth-quarter earnings that fell shy of company and analyst projections.

Home Stake Mining, up 1 at 17-1/2.

Newmont Mining, up 1-1/2 to 50.

Gold stocks continued a strong week as gold prices rose and some investors sought hedges against possible market weakness.

AMEX

Viacom, down 4 at 41-5/8.

Viacom Series B, down 4 at 42-3/8

Several Wall Street firms lowered their expectations for the entertainment conglomerate.