Market Stages Late Rebound; Dow Gains 3.91 : Profit Taking Depresses Prices Early in Session

NEW YORK â€”  The stock market posted a modest gain today, overcoming some early selling to extend last week’s strong rally.

Despite some profit taking that kept the market lower until late in the day, the Dow Jones industrial index closed up 3.91 points at 2,075.21.

The Dow was down more than 13 points at its mid-session low.

Advancing issues outnumbered declines by about 4 to 3 in nationwide trading of New York Stock Exchange-listed issues.

Volume on the Big Board came 152.46 million shares, against 189.60 million in the previous session. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 176.71 million shares.

The stock market started the week off on a positive note for investors who have recently become more confident of the well-being of the U.S. economy.

Economists said worries over inflation, which have paralyzed investors, appear to be exaggerated.

“I think there is more confidence in the market,� said George Pirrone, senior trader at Dreyfus Corp.

Technical analyst Edward Nicoski of Piper Jaffray & Hopwood said: “The tone has improved in the market over the past two weeks. I see a lot of possibilities for the market. The psychology has swung around so fast.�

In Tokyo, stock prices climbed almost across the board in active trading, driving the Tokyo Stock Exchange’s main barometer momentarily above the 28,000-mark for the first time. After passing 28,000, the Nikkei 225-share average declined slightly, closing up 89.76 to a record 27,996.24.

In London, share prices also finished higher as a bit more buying crept back into a cautious, thin market on the London Stock Exchange. The Financial Times 100-share index rose 13.5 to close at 1,832.7.

Bond prices dip, Page 8