Inflation News Boosts Market to Small Gain

NEW YORK — The stock market pieced together a small gain Friday, overcoming periodic bouts of profit taking with the help of some better-than-expected inflation news.

The Dow Jones index of 30 industrials rose 4.78 to 2,455.99, closing out the week with a net gain of 19.29 points.

Volume on the New York Stock Exchange slowed to 172.13 million shares from 195.40 million in the previous session.

Before the opening, the Labor Department reported that the producer price index of finished goods rose 0.2% in June, coming in below most advance estimates on Wall Street.

The news was warmly received in the credit markets.

The bellwether 30-year Treasury bond rose by more than 1/2 point, or about $5 per $1,000 in face amount, with its yield dipping to 8.46% from 8.51% Thursday.

Stock traders viewed the data as further evidence that last spring’s inflation scare in the financial world was probably unwarranted.

Fairchild Industries picked up 1 1/8 to 13 3/8. The company said it has begun a restructuring program intended to improve earnings growth and increase shareholder value.

Centerior Energy led the active list, off 3/8 at 17 on turnover of more than 8 million shares. Brokers said a good part of the activity stemmed from maneuvers aimed at capturing the company’s dividend.

In the bond market, corporate and municipal issues rose in quiet activity.

Most of the price gains occurred early in the session after the release of the producer price index report.

Aiding bond prices was continued strength in the dollar, which rose Friday against most major currencies.

Federal funds traded at 6.438% Friday, down from 6.563% Thursday.

In the secondary market for Treasury bonds, prices of short-term government issues increased 1/8 point, intermediate maturities rose about 7/32 point and 20-year issues were up 3/8 point.

Corporate issues rose in the range of 1/8 point to point.

Tax-exempt municipal bonds rose 3/8 point to 3/4 point.

Yields on three-month Treasury bills fell 2 basis points to 5.62%. Six-month bills were up 1 basis point to 5.50% and one-year bills slipped 11 basis points at 6.12%.