Stocks closed narrowly mixed Friday in heavy trading as uncertainty about what may happen in the Persian Gulf war over the weekend sent the market on a late tumble.
The Dow Jones industrial average, which fell 7.18 Thursday, lost 2.47 to close at 2889.36. The Dow had been up more than 40 points earlier in the session.Among broader market gauges, the New York Stock Exchange composite index added 0.37 to 199.64 and the Standard & Poor's 500-stock index rose 0.68 to 365.65. The price of an average share gained 6 cents.
Advances led declines 815-714 among the 2,013 issues crossing the NYSE tape. Big Board volume totaled 218,760,000 shares, compared with the 180,770,000 traded Thursday.
The market rose sharply at late morning after President Bush took a tough stance against Iraq in his response to the Soviet Union's peace plan.
Bush gave Saddam Hussein an ultimatum - begin removing his troops from Kuwait by noon Eastern time Saturday and have them all out in a week or face a massive ground war.
The White House later outlined the specific terms the coalition partners agreed upon, including that the Iraqi withdrawal must be completed "in one week."
Meanwhile, talks continued in Moscow between Iraqi Foreign Minister Tariq Aziz and Soviet officials to further discuss the plan that was originally proposed by Soviet president Mikhail Gorbachev.
A short time later Aziz accepted a new plan with stiffened terms, but the revised plan had not yet been approved by Saddam and got a cool reception from Bush, who spoke with the Soviet leader by phone.
Gorbachev's spokesman Vitaly Ignatenko said Bush listened "with a certain degree of attention" but "gave no assessment" of the new plan. Bush, leaving the White House to spend the weekend at Camp David, said he was studying it.
Analysts said Bush's lukewarm response to the plan, combined with reports that U.S. warplanes dropped napalm and fuel-air bombs on Iraqi troops, wiped out the market's rally, which had hit 40 points. The Pentagon said it was looking into whether such weapons had actually been used.
"The Dow was up about 40 or 45 points when the reports that we were using napalm hit the tape," said Ron Doran, director of institutional trading at C.L. King & Associates in Albany, N.Y.
"That and Bush's cool response put a lot of people on edge going into the weekend. They just decided to take some profits and wait and see what happens," he said.
Doran also said technical factors played a part in the late selloff. "There was a feeling that the market had gone a bit too far today," he said.
On the trading floor, Citicorp was the most active issue, up 1/8 to 151/2.
Philip Morris followed, up 11/2 to 673/4. Laidlaw Class B was third, up 1/8 to 167/8.
Among the other blue chips, AT&T was unchanged at 331/4, IBM lost 21/4 to 1331/4, General Electric added 11/8 to 691/4 and Boeing gained 3/8 to 477/8.
Prices gained in active trading on the American Stock Exchange.
The Amex Market Value index rose 0.26 to 342.01. Advances led declines 329-266 among the 795 issues traded. The price of an average share was unchanged.
Continental Airlines Holdings led the Amex issues, up 1/2 to 23/4. It said Thursday that using slots bought from defunct Eastern Air Lines, it would expand service from LaGuardia Airport to the South and the Midwest.