Stocks Edge Higher in Quiet Trading; Dow Advances 3.93

NEW YORK — Stock prices inched ahead today in a quiet year-end session on Wall Street.

The Dow Jones average of 30 industrials rose 3.93 to 2,166.61.

Advancing issues outnumbered declines by about 4 to 3 on the New York Stock Exchange, with 780 up, 592 down and 582 unchanged.

Big Board volume totaled 110.63 million shares, against 87.49 million in the previous session.

The NYSE’s composite index gained 0.24 to 155.82.

Analysts said some buying was encouraged by the market’s relatively steady showing lately in the face of continued increases in interest rates.

Also, the dollar gained ground against leading foreign currencies today.

But market-watchers observed that it was hard to get a significant rally going with so many investors having closed down their activities for the year.

Tuesday’s and last Friday’s sessions were the third- and second-slowest of 1988, and brokers said they didn’t look for much pickup in business until at least next week.

Bond prices fell slightly in early trading today, depressed by disappointing results from a Treasury auction of new debt.

The Treasury’s closely watched 30-year bond was down 3/16 point, or $1.87 for every $1,000 in face value, at around midday. Its yield, which moves inversely to its price and is an indicator of interest rate trends, had risen to 9.00% from 8.97% late Tuesday.

Analysts said bond prices sagged Tuesday after the results of the government’s auction were announced.

Traders also expressed concern about the surging federal funds rate, the interest banks charge each other on overnight loans.

The rate often is seen as an indicator of whether the Federal Reserve is tightening or relaxing credit.

Federal funds were at 9.375%, up from 9.00% late Tuesday. Analysts said traders interpreted the rate’s high level as evidence of tighter credit--which leads to higher interest rates overall, and therefore lower bond prices.

In the secondary market for Treasury bonds, prices of short-term government issues were down 1/32 point to 3/32 point, intermediate maturities fell 1/8 point to 9/32 point while 20-year issues edged up 1/32 point, according to figures provided by Telerate Inc., a financial information service.