Final Tally Masks Roller-Coaster Ride of Blue Chips’ Session

Pass the Dramamine!

Wall Street ended a roller-coaster week with a bang Friday, as blue chips plummeted, then bounced back to finish with only small losses, in thin trading.

Overseas, many stock markets fared worse.

The Dow Jones industrials opened the day with a 177-point dive, ostensibly on worries about rising bond yields and a falling dollar.

But the Dow reversed its decline in the closing hours to finish down just 6.04 points to 7,887.91.

For the week, the Dow rose 193.25 points, thanks to big gains early in the week after last Friday’s 247-point slump.

Meanwhile, the Nasdaq composite index lost 8.67 points to 1,598.69 on Friday, but gained 36.66 points for the week.

Troubles for Wall Street started brewing overnight, when the dollar began slipping further against the German mark because of fears that Germany’s central bank might raise interest rates soon.

The dollar ended at 1.819 marks in New York, down from 1.836 on Thursday, although it rose to 118.35 Japanese yen from 117.20.

Fears of a rate hike in Germany also spelled trouble for bonds, raising the specter that foreign money might move out of U.S. Treasury bonds in search of higher interest rates abroad.

The 30-year Treasury bond yield ended the day at 6.65%, up from 6.62% on Thursday but well below the 6.69% reached at midday. The yield was 6.54% a week ago.

Stocks’ recovery late in the day was credited to bonds. But some analysts said trading was so light that it was hard to make a big deal of the morning plunge or the afternoon rebound.

Although declining issues outnumbered advancers by a 2-to-1 margin on the New York Stock Exchange, volume was just 460 million shares--very low, even for a summer Friday.

“The volume is just not there. We didn’t see big blocks of stock being sold at the low levels” early in the day, said Greg Malik, a trader at Unterberg Harris.

Friday’s Dow reversal came on the heels of an unprecedented five straight sessions where the blue-chip index rose or fell more than 100 points. Some analysts warn that the volatility could be a sign of a market top. Others say the real trend in the market won’t be apparent until September, when many investors return to work.

Among Friday’s highlights:

* Technology stocks were broadly lower after a Merrill Lynch analyst downgraded Intel and Texas Instruments. Intel lost $2.19 to $96.19 after trading as low as $91.50; TI fell $6.25 to $118.75 after trading as low as $117.50.

Other losers included Applied Materials, down $2.63 to $101.63; and Sun Microsystems, down $1 to $50.13.

* By the close, only two Dow issues were down a point or more: GE was off $1.06 to $64.88; and United Technologies fell $1 to $79.75.

In foreign trading, many markets careened lower. Frankfurt’s key stock index plunged 3.9% to 4,086 on interest-rate worries.

Elsewhere, Hong Kong’s Hang Seng index slumped 1.4%, Tokyo’s Nikkei-225 index tumbled 2.7% to 18,650 (a four-month low) and Mexico City’s Bolsa index was off 0.9% to 5,023.

In troubled Thailand, stocks fell for a seventh straight day as the country’s currency, the baht, plunged to a record low against the dollar, threatening to raise companies’ costs and drive more borrowers into default.

The baht fell as low as 33.58 to the dollar. The benchmark Thai stock index plummeted 4% to 559.59, its lowest since the baht’s devaluation began July 2.