Stocks edged higher Friday as the market steadied after Thursday's sharp drop, shaking off worries that not enough is being done to prevent the economic crises abroad from worsening.
The Dow Jones industrial average closed 21.89 higher at 7,895.66 after drifting through a busy but hardly volatile session. The Dow never rose more than 57 points during the day and never fell more than 46.The gain left the Dow 12 points below where it began the year, 7,908.25, and 15.4 percent beneath its July 17 record high of 9,337.97. For the week, the barometer of 30 big companies gained 100.16.
Broader stock indicators also posted modest gains on Friday, led by smaller-company shares, despite another sloppy day on foreign markets.
The Dow plunged 216 points on Thursday, halting a four-session rally, as world markets tumbled in disappointment at the inaction of the Federal Reserve and other major central banks in responding to the global economic crisis.
Thanks to some encouraging words on Monday from President Clinton and foreign monetary officials, many investors have been looking for the United States and its financial allies to lower interest rates to stimulate the global economy.
But on Wednesday, speaking to a congressional panel, Fed chairman Alan Greenspan made it clear that no multinational rate cut was in the works. The German central bank echoed that sentiment a day later, leaving its key lending rates unchanged.
Procter & Gamble rose 21/8 to 68 15/16 and Chevron rose 17/8 to 833/8 as the Dow's two biggest gainers, helping offset losses from Caterpillar, down 21/2 to 401/4, and IBM, down 2 1/16 to 124 11/16.
The Standard & Poor's 500 rose 1.22 to 1,020.09, and the technology-heavy Nasdaq composite index rose 17.52 to 1,663.77.
Advancing issues outnumbered decliners by a 7-to-4 margin on the New York Stock Exchange. NYSE composite volume totaled a hefty 912.96 million shares, mostly because Friday marked the quarterly expiration of stock-related options and futures contracts.
The Russell 2000 index of smaller companies rose 7.96 to 363.25, and the small-company dominated American Stock Exchange composite index rose 5.91 to 627.16. The NYSE composite index rose 1.23 to 507.54.
In Asia, stocks fell 7.5 percent in the Philippines, 4.8 percent in Indonesia, 3 percent in Singapore and 1.7 percent in Hong Kong. In Europe, key stock indexes fell 1.5 percent in both London and Frankfurt.
Japanese stocks, however, rebounded 0.9 percent from Thursday's 12-year low amid hopes that legislators would reach a compromise on banking reform in time for Prime Minister Keizo Obuchi's visit to the United States next week.
After the Tokyo market closed, an agreement was announced between the ruling Liberal Democratic Party and the main opposition parties.