DOW APPROACHES 6,000 : STOCK MARKET SOARS TO NEW RECORDS.

Byline: Bruce Meyerson Associated Press 

The Dow Jones industrial average shot toward the 6,000-mark Friday amid convincing signs the economy may be slowing enough to contain inflation without the Federal Reserve raising interest rates.

Broader stock market barometers jumped to record levels as well, with the Standard & Poor's 500-stock list surpassing the 700-mark for the first time.

The Dow rose 60.01 to finish at 5,992.86, having come within 5 points of 6,000 in the last hour of trading. The famed blue-chip average has now rocketed back by about 800 points, or more than 15 percent, from the nadir of July's bruising sell-off.

That tailspin was instigated largely by worries that signs pointing to rising production costs would force the inflation-wary Federal Reserve to raise its key lending rates, slowing consumer spending and, perhaps, corporate profits.

Notably, the inspiration for Friday's rally was a report that unemployment unexpectedly edged higher in September from a seven-year low in August, the strongest evidence yet that business activities may be slowing sufficiently without the central bank's intervention. Last week, the Fed heartened investors by holding off on a potential rate increase.

Bonds rallied on the tamer inflation outlook. Higher inflation or interest rates make the fixed payoff on bonds less attractive, forcing down prices to improve the yield.

As bond prices rose, the yield on the 30-year Treasury bond - a key determinant of corporate and consumer borrowing costs - fell from late Thursday's 6.83 percent to 6.74 percent, the lowest level since mid-August.

Advancing issues outnumbered decliners by a 5-to-2 margin on the New York Stock Exchange, where volume was heavy at 463.88 million shares as of 4 p.m., up sharply from Thursday's 386.09 million.

The S&P 500 rose 8.68 to 701.46, and the NYSE composite index rose 4.02 to 374.16 - the fourth record finish for both indexes this week.

The Nasdaq composite index rose 14.47 to 1,247.56, and now sits about 1-1/2 points shy of its record high set June 5. The Nasdaq market, laden with more volatile technology and speculative companies, had lagged the blue-chip rebound from July's sell-off, which dragged the Nasdaq composite as low as 1,008.

The American Stock Exchange's market value index, which also is dominated by more speculative shares, rose 7.29 to 579.89, but is still about 35 points from its May peak.

Many economists had been forecasting an increase of about 170,000 payroll jobs in September. Instead, jobs fell by 40,000, the first setback since January, the government reported. While the figures helped validate last week's Fed decision, some analysts said they also raised a caution flag.

``The other side of the coin is that we're probably witnessing the peak of the economy now,'' said Dan Ascani, president and research director at Global Market Strategists Inc. in Gainesville, Ga.

Among the Dow industrials, for example, Bethlehem Steel fell 1 to 8-5/8; chemical maker Union Carbide fell -3/4 to 45-1/4; aluminum producer Alcoa fell -3/8 to 60; and heavy equipment maker Caterpillar fell -3/8 to 73-1/2.

Bellwether technology shares continued their recent resurgence on optimism for improving demand in the computer industry. In Nasdaq trading, Intel jumped 2 3/16 to 101 11/16; Microsoft rose 2-3/8 to 136-3/8; and Dell Computer rose 2-7/8 to 84-7/8. IBM rose 1-5/8 to 126-5/8 as one of the Dow's strongest issues.

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Photo

Photo: (color) James J. McGuire, board chairman of Henderso n Bros., right, trades shares on the floor of the New York Stock Exchange.

Associated Press