FINANCIAL MARKETS : Blue-Chips Slip; Yields Rise on Growth News

Market Overview

Blue chip stocks fell on profit taking Friday, as the market paused after the previous session’s rise to a record high.

* Long-term Treasury bond yields resumed their rise as reports of economic strength made investors nervous ahead of key employment figures due at the end of next week.

* Oil futures slumped below $17 a barrel after a private report said OPEC’s crude oil production this month appeared to be far above its daily quota.

Stocks

Stocks of some big-name companies stalled while many smaller issues moved ahead, producing a mixed finish for the market.

Blue-chip issues remained in neutral for much of the session. But profit taking and a late selloff in one component of the Dow Jones industrial average depressed the widely watched indicator, and it closed off 7.27 at 3,680.59. It advanced 31.29 points in the week and reached new closing highs twice.

Advancing issues outnumbered declines on the New York Stock Exchange, where about 1,190 stocks rose in price and 813 fell, on Big Board volume of 270.57 million shares.

The Big Board swept past another milepost Friday, setting a record for annual trading value, with a full two months left in the year. The value of all NYSE trades amounted to $1.882 trillion, exceeding the previous record of $1.874 trillion reached in 1987, according to the exchange.

* The Dow industrial average ended near its lowest level of the day because of heavy late selling of International Paper. It tumbled 2 1/4 to 59 1/2 on reports that a brokerage analyst made negative comments about the group. Georgia Pacific also plunged, sinking 2 1/4 to 64 1/4.

* The Big Three car makers fell on profit taking after helping drive the blue-chip market higher Thursday. General Motors fell 1 3/8 to 47 5/8, Ford eased 1 to 61 7/8 and Chrysler lost 1 1/4 to 55 7/8.

* American Express, among the most active on the NYSE, added 3/4 to 32 1/4. Salomon Bros. said it upgraded the stock to “buy.”

* Kendall Square dropped 7 7/8 to 16 3/8 after the maker of computer systems forecast a third-quarter loss. Within the technology group, Cisco Systems gained 1 1/2 to 51 1/4 and Oracle Systems added 1 to 59 1/4.

* A new offering of Exide, a battery maker, was the second-most heavily traded NYSE stock on volume of about 3.9 million shares. It closed at 26 7/8, well above its debut price of 20.

Stocks also advanced in Frankfurt, Tokyo, London and Mexico City.

Credit

The long bond’s yield rose to 5.96% from Thursday’s 5.94%. Its price, which moves in the opposite direction, fell 11/32 point, or $3.44 per $1,000 in face value.

Of particular interest to fixed-income investors was a survey showing a sharper than expected improvement in Midwest manufacturing conditions this month.

The bond market tends to react negatively to news of economic growth because it raises the likelihood that inflation will head higher, and inflation can reduce the value of bonds and other interest-bearing securities.

The federal funds rate, the interest on overnight loans between banks, was 3.063%, unchanged from Thursday.

Other Markets

The crude oil market at the New York Mercantile Exchange deteriorated on an estimate by Petroleum Intelligence Weekly that daily production by OPEC nations, including Iraq, has been 24.9 million barrels a day during October. The cartel’s quota is 24.5 million.

Light, sweet crude oil for delivery in December lost 45 cents and settled at $16.92 a barrel.

* New York Comex gold ended at $368.70 an ounce, off 40 cents from Thursday. Silver fell 1.9 cents to $4.355 an ounce.

* The dollar drifted upward against most currencies

Market Roundup, D4