STOCKS : Dow Inches Up 9.16 in Very Light Trading

Stock prices turned higher Wednesday after a sharp drop Tuesday, but trading was thin ahead of today’s Thanksgiving holiday.

The Dow Jones industrial index closed up 9.16 points at 2,539.36. Declines led advances 740 to 706 on the New York Stock Exchange.

The market fell early in the session before reversing course in the afternoon.

But traders were unconvinced by the pre-holiday rally, which came after the blue chip index lost 35 points Tuesday. Big Board volume Wednesday was 140.7 million shares, the lightest day in three weeks.

“While there’s no new bad news, I think there’s a sufficient sense that this bear market rally is beginning to fizzle a bit,” said Bradley Turner, chairman of McDonald & Co.’s investment policy committee.

The stock market rally came despite an upswing in crude oil prices. Crude for January delivery rose 72 cents to close at $29.63 a barrel on the New York Mercantile Exchange.

“My feeling is that the banking and financial stocks are still under a great deal of pressure, and it’s going to be difficult to see any major sustained turnaround in stocks while this is taking place,” said Kenneth Gerbino, who heads an investment company that bears his name.

Robert Stovall, president of Stovall/21st Advisers, said stocks are still vulnerable to sudden, steep declines in well-known issues. Noting that a nearly 5-point drop in Boeing Co. shares contributed to the market’s fall Tuesday, he said, “We have developed a torpedo stock syndrome.”

Among the highlights:

* Boeing, which tumbled 4 5/8 on Tuesday after Goldman, Sachs & Co. removed the stock from its recommended list, rebounded 1 5/8 to close at 44 1/4. Analysts at Merrill Lynch and Prudential-Bache reiterated buy ratings on the airplane maker.

* Smith Barney was more negative on the near-term prospects of Federal National Mortgage Assn., which fell 1 to 30 5/8, Federal Home Loan Mortgage, which lost 3/8 to 37 3/8, and several other mortgage lenders. Other weak financial service stocks included Wells Fargo, off 1 1/4 to 52; Marsh & McClennan, down 3/4 to 73, and American Express, off 3/4 to 19 3/4.

* Syntellect dropped 2 1/2 to 6 1/2 on news that the computer company received a lower 1991 order forecast from IBM.

* Digital Equipment Corp. fell 2 3/8 to 49 3/8. Montgomery Securities trimmed 1991 earnings and revenue estimates.

In London, the Financial Times 100 index closed 11.1 points higher at 2,126.3, brought down from a day’s high of 2,141.6 by a weak Wall Street opening.

In Tokyo, the 225-share Nikkei average closed down 388.49 points, or 1.67%, at 22,816.99. It lost 312.68 on Tuesday.

In Frankfurt, the German market was closed for a public holiday.

CREDIT

Bond Prices Rise on Interest Rate Hopes Bond prices climbed in light, pre-holiday dealings as speculation grew that interest rates are headed lower.

The Treasury’s key 30-year bond rose 7/16 point, or $4.40 per $1,000 in face amount, while its yield dipped to 8.42% from 8.46% late Tuesday. Trading was sluggish on the day before the Thanksgiving holiday, with the market closed at 2 p.m. An early close is also slated for Friday.

Elliott Platt, who follows the bond markets for the investment firm Donaldson Lufkin & Jenrette Securities, said weak economic reports are contributing to speculation that interest rates may be headed lower.

On Wednesday, a government report said initial jobless claims rose 39,000 to 488,000 in the latest week.

“It indicates the economy is in a recession and the recession is deepening,” he said. He added that many traders expect the Federal Reserve will take more steps to lower interest rates before the end of the year.

When interest rates fall, the prices of bonds already in the hands of investors rise.

It is widely believed that the central bank relaxed its monetary policy last week amid mounting evidence of economic deterioration. The Fed does not announce such actions, but it is believed that it demonstrated its intentions by allowing a quarter-point drop in the federal funds rate, the rate banks charge each other for overnight loans.

That rate stood at 7.5% on Wednesday, unchanged from late Tuesday.

CURRENCY

Dollar Ends Mixed in Slow Session The dollar closed mixed in lackluster, pre-holiday trading, with little news to affect the currency, traders said.

The dollar rose against the German mark but fell against the Japanese yen and British pound.

In Tokyo, the dollar fell to a closing 127.68 yen from 128.93 yen Tuesday. Later in London, it rose to 128.90 yen. But in New York, one dollar bought 127.17 yen, down from 128.85 yen late Tuesday.

In London, the British pound fell to $1.9680 from $1.9695 late Tuesday. But in New York, one pound cost $1.9670, more expensive than $1.9660 on Tuesday.

The mark traded at 1.4815 to the dollar in Europe, up from 1.4760 on Tuesday. In New York, one dollar fetched 1.4770 marks, up from 1.4740 marks the day before.

COMMODITIES

Soybean Futures Advance Sharply Soybean traders, eyeing both domestic usage and the potential for exports to the Soviet Union, sent prices higher at the Chicago Board of Trade.

Soybeans were up to 9 cents higher while soy oil more than recovered losses suffered Tuesday. Wheat also was higher, while corn lost a penny or so.

On other markets, livestock and meat futures were mostly higher, as were precious metals and petroleum futures.

On the Commodity Exchange in New York, gold settled 50 cents to $1.30 higher, with the December contract at $379.80 an ounce; silver was 1.2 to 1.8 cents higher, with November at $4.12 an ounce.