FINANCIAL MARKETS : Dow Slips 1.90; Index’s Gain in May Is 219.90

Stock prices finished mixed Thursday, flattening out as traders cashed in some of the gains from the market’s recent upsurge to record highs.

The Dow Jones index of 30 industrials, up 57.64 points Tuesday and Wednesday, slipped back 1.90 to 2,876.66.

That still left the index with a 219.90-point gain for May.

In the broader market, advancing issues outnumbered declines in nationwide trading of New York Stock Exchange-listed stocks, with 801 up, 682 down and 534 unchanged.

Analysts said the market’s strong showing of late had stirred up considerable enthusiasm for stocks.

But traders apparently adopted a cautious approach Thursday while they awaited today’s report from the Labor Department on employment in May.

The data is expected to be skewed by the temporary effects of government hiring of census workers. Even after that is factored out, many observers are uncertain whether the figures will lend any fresh conviction to recent hopes for lower interest rates.

Elsewhere, evidence of weakness in the economy in April continued to accumulate. The Commerce Department on Thursday morning reported a 2.3% drop in new factory orders.

Big Board volume slipped back to 165.69 million shares from Wednesday’s 199.54 million.

UAL gained 4 5/8 to 155 1/2 on word that Gerald Greenwald was leaving his job as vice chairman of Chrysler Corp. to lead a proposed buyout of UAL.

Westinghouse Electric rose 1 3/8 to 36 3/8. The company said it plans to buy back as many as 20 million shares of its stock.

Losers among the blue chips included Philip Morris, down 3/8 at 42 1/8; International Business Machines, down 7/8 at 120; General Motors, down 5/8 at 48 5/8, and Eastman Kodak, down 7/8 at 40 1/4.

Tyco Toys climbed 3 3/8 to 28 in the over-the-counter market. The company said it had received takeover inquiries from a party it didn’t identify.

Tonka Corp.’s stock plummeted 3 to 7 1/8 as the Teenage Mutant Ninja Turtles that have taken Hollywood by storm are also taking large bites out of Tonka’s toy market share and earnings.

Stocks closed firmer in Tokyo on bargain hunting. The 225-share Nikkei index rose 204.54 points to close at 33,130.80.

In London, shares eased in a cautious market as a two-day rally ran out of steam, dealers said. The Financial Times 100-share index lost 1.1 points, ending at 2,345.1.

CREDIT Bond Prices Bounce Back From Declines Treasury securities prices closed mostly higher in light trading after recovering from an earlier dip sparked by a report that the economy may be stronger than believed, traders said.

The credit market’s benchmark issue, the 30-year Treasury bond, gained 3/16 point, or $1.88 per $1,000 face amount. Its yield, which falls when prices rise, dropped to 8.57% from 8.59% late Wednesday.

William Sullivan, a money market economist at Dean Witter Reynolds Inc., said surveys from corporate purchasing managers in the Detroit and Chicago areas indicated that the economy’s manufacturing sector perked up in May. A more comprehensive report based on a nationwide purchasing managers survey is due for release today.

An economic rebound could be bad news for the bond market. Strong growth typically is accompanied by rising inflation, which erodes the value of fixed-income securities such as bonds. Credit demands usually increase when the economy strengthens, driving up interest rates.

But the market later recovered and most Treasury issues closed the day higher, said James Marshall, a government securities trader with Clayton Brown & Associates in Chicago.

The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.25%, up from 7% late Wednesday.

CURRENCY Dollar Gains on Eve of Jobless Report The dollar advanced against all major currencies except its Canadian counterpart amid buying ahead of the unemployment data due to be released today.

Nervousness about various world matters also encouraged currency dealers to buy dollars.

The start of the summit between President Bush and Soviet President Mikhail S. Gorbachev in Washington set the market on edge, particularly because a dispute appeared possible over the future role of the North Atlantic Treaty Organization after the planned German unification.

Tension elsewhere, including in the Middle East, also helped the dollar, traders said. Dollar investments are typically favored in times of uncertainty.

COMMODITIES Crude Oil Buildup Sinks Energy Prices Energy futures prices plunged on the New York Mercantile Exchange following the release of figures showing a buildup in crude oil and gasoline stocks.

On other markets, grains and soybeans were mostly higher; precious metals futures were mixed, and livestock and pork futures were mostly lower.

The release of the American Petroleum Institute’s inventory figures Wednesday showed an increase rather than the expected decrease in gasoline and crude oil stocks.

The API reported that gasoline inventories as of last Friday increased 1.1 million barrels from the preceding week to 214.2 million barrels.

West Texas Intermediate crude oil settled 2 to 68 cents lower, with the contract for delivery in July at $17.40 a barrel; heating oil was 0.45 cent to 1.08 cents lower, with June at 50.07 cents a gallon, and unleaded gasoline was 0.60 cent to 2.98 cents lower, with June at 63.89 cents a gallon.

Tables begin on D5

HOW STOCKS DID IN MAY High-tech stocks were the market leaders in May, as smaller stocks in general outperformed the blue-chip indexes.

Percentage change Index May close May Yr to date H&Q; growth-technology 703.14 +15.2% +13.9% NASD OTC composite 458.97 +9.3% +0.9% S&P; 500 361.23 +9.2% +2.2% Wilshire 5,000 3,448.48 +8.7% +0.8% NYSE composite 196.94 +8.5% +1.0% Dow industrials 2,876.66 +8.3% +4.5% S&P; utilities 145.13 +6.3% -7.2% AMEX market value 363.06 +5.8% -4.0% S&P; transports 280.30 +4.5% +0.7%