Bond Prices End Lower in Erratic Trading : Can’t Sustain Early Push From Economic Reports

NEW YORK — The bond market showed losses at the end of an erratic session Friday.

In the early going, bond prices moved higher in response to the government’s latest evaluations of inflation and industrial production.

The reports showed that collapsing world oil prices helped produce a record plunge in wholesale prices last month, while production at the nation’s factories, mines and utilities shrank 0.6%.

The Fed’s industrial production report was the latest in a series of indicators that suggest a stagnant economy.

Bond traders generally welcome sluggish growth because it tends to prevent the buildup of pressures that could drive interest rates up.

OPEC Meeting in Geneva

But in the afternoon, the market gave back its gains in nervous trading.

Speculation over the outcome of the OPEC meeting contributed to the jittery mood, traders said. The Organization of Petroleum Exporting Countries is meeting in Geneva this weekend to seek a way to reverse the price slide.

In the secondary market for Treasury securities, prices of short-term governments were unchanged to up 1/32 point and intermediate maturities fell by 1/32 point to 3/16 point. The 20-year bond dropped 19/32 point and the 30-year issue was off 7/16 point.

In the market for corporate securities, industrials and utilities lost 3/8 point in light trading volume.

Among tax-exempt municipal bonds, revenue bonds fell 3/8 point and general obligations dropped 5/8 point in quiet activity.

The yield on the benchmark 30-year Treasury bond rose to 7.97% from 7.94% last Thursday.

The federal funds rate traded at 7.188%, compared to 7.438% late Thursday.

In the stock market, prices soared again, closing out a week of record-breaking gains and trading volume that carried Wall Street’s bull market to new heights.

The Dow Jones average of 30 industrials jumped 39.03 to 1,792.74, winding up the week with a record advance of 92.91 points.

Volume on the New York Stock Exchange came to 181.87 million shares, against 171.48 million on Thursday.

Both the New York and American stock exchanges had their busiest weeks ever.

Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 210.60 million shares.