Dow Starts Off Bullish, Then Dips

Stocks meandered through a sleepy session Friday, producing negligible changes in most major indexes but snapping a streak of record highs by the Dow Jones industrial average.

The Dow was clinging to a tiny gain that would have meant its fourth straight record close but faded during the final minutes, falling 3.49 8,113.44. The blue chip measure, up 222.98 for the week, never moved more than about 40 points in either direction all day.

“There was a tug of war between those who sought to take some profits before the weekend and those waiting to buy on dips,” said Alan Ackerman, senior vice president at Fahnestock & Co.

Smaller company shares outperformed the blue chip stocks, producing a mixed finish, but broadmarket indicators barely strayed from Thursday’s closing levels. Even so, however, analysts remained impressed by the market’s resiliency after another strong week.

“We had fairly decent session,” said Hildegard Zagorski, a market analyst at Prudential Securities. “The market settled down, which is not surprising, but you really can’t knock it down.”

The personal computer sector was the only group to show significant movement, pulling back sharply amid some troubling indications in an otherwise strong earnings report by Gateway 2000.

There wasn’t much of a reaction to the day’s economic news, which did little to alter the market’s upbeat outlook for steady economic growth with tame inflation and interest rates. Analysts said investors are more concerned about next week’s readings on employment costs, which typically account for two-thirds of a product’s price.

The Commerce Department reported Friday morning that orders for big-ticket manufactured goods perked up a surprising 2.3 percent in June, while the National Association of Realtors reported that sales of existing homes slipped 2.6 percent.

Stocks rallied earlier in the week after Federal Reserve Chairman Alan Greenspan issued an encouraging midyear report to Congress, refraining from any hint of an imminent increase in interest rates to slow the economy and protect against inflation.

“The Greenspan rally is losing some momentum,” said Peter Cardillo, director of research at Westfalia Investments. “We’re approaching a high level in the market and we’re facing a batch of economic numbers next week, so the market was set to take a breather. It needs new catalysts.”

Advancing issues barely outnumbered decliners on the New York Stock Exchange, where the volume was down from Thursday’s hectic pace, but still fairly heavy at 519.61 million shares as of 4 p.m.

The Standard & Poor’s 500-stock list fell 1.51 to 938.79, and the NYSE composite index fell 0.51 to 486.80. Both measures closed at record highs on Thursday.

Overseas, Tokyo’s Nikkei stock average rose 0.5 percent, Frankfurt’s DAX index fell 0.4 percent and London’s FT-SE 100 fell 0.2 percent.