Market Closes at Record 3,077 on Strong Earnings : Wall Street: The 30-stock Dow Jones index rises 24 points as investors react to profits at blue-chip corporations.

Wall Street marked the fourth anniversary of the 1987 market crash with a blue-chip rally that pushed the Dow industrial average to a new high.

The Dow jumped 24.15 points, or 0.8%, to a record 3,077.15, as Big Board trading volume topped 200 million shares for the fourth straight day.

The intensity of the buying again surprised Wall Street pros, many of whom had argued recently that investors were tapped out after the market’s strong rise this year.

Friday’s rally wasn’t led by any particular stock group, but rather by a cross-section of issues. For example, drug firm Merck & Co. jumped 2 to 132, fast-food giant McDonald’s rose 3/4 to 37 1/4, and machinery firm Caterpillar rose 1 1/8 to 48 5/8.

Since the latest rally began on Monday, the Dow has surged 93.47 points, or 3.1%, from last Friday’s close of 2,983.68.

The spark for the week’s big gains appeared to be a growing conviction that the recession has ended and that corporate earnings will begin to grow late this year or early in 1992. As measured by the Standard & Poor’s 500 index of major companies, quarterly earnings overall have been declining virtually nonstop since mid-1989, except for one up quarter in mid-1990.

Some key third-quarter earnings reports released the past week gave investors hope that profits had begun to turn. Friday, the optimism continued with reports by companies such as United Technologies and Apple Computer. Both reported lower third-quarter results than a year ago, but their numbers were better than expected. United Technologies rose 3 3/4 to 47 1/8; Apple rose 2 5/8 to 55.

Also helping to feed enthusiasm Friday: Treasury bond yields eased after rising sharply Thursday, when the government reported higher-than-expected inflation in September.

While many traders were awed by the market’s performance this week, some warned that the strength of the rally was suspect. Friday, while New York Stock Exchange volume was a healthy 205 million shares, advancing issues topped decliners by only 868 to 726--not a wide margin.

Len Hefter, over-the-counter stock trader at Jefferies & Co. in Dallas, said much of the buying came from “short sellers”--traders who had previously sold borrowed shares of stock, betting that prices would drop. As stocks have rallied instead this week, the shorts have been forced to buy shares on the open market to close out their positions and stem their losses.

“I think a lot of shorts jumped in Friday,” Hefter said. Such buying can support a market rally only for a few days, traders warn.

Still, many experts say widespread worries about another market crash-- a la October, 1987--are unwarranted. Four years ago, on Oct. 19, 1987, the Dow plunged 508 points, from 2,246 to 1,738, as rising interest rates and gloomy economic forecasts caused a panic selloff. That one-day decline followed a slide from a Dow peak of 2,722 in August, 1987.

Then, as now, the bears argued that stocks were overpriced. But today, the bulls argue that the market still has important trends going in its favor: The possibility of lower interest rates ahead, strong new buying interest by investors tired of low returns on bank CDs and money funds and, most important, the probability of renewed economic growth in 1992.

Charles Brandes, who runs Brandes Investment Management in San Diego, argues that while many stocks have become overpriced, “I’m still finding things that are cheap (relative) to earnings,” such as K mart, Federal Home Loan Mortgage Corp. and Telefonos de Mexico, the Mexican telephone monopoly.

Enough other investors are coming to the same conclusion as well, Brandes says, that “I’m not fearful of a major correction in stocks soon.”

Among Friday’s highlights:

* Big winners included Snap-On Tools, up 2 1/8 to 33 1/8; retailer House of Fabrics, up 1 5/8 to 39; auto parts firm Superior Industries, up 1 1/8 to 31 7/8, and Hilton Hotels, up 1 3/4 to 43 1/2.

* Many biotech stocks surged anew, apparently helped by short covering. Immune Response rocketed 5 to 47 1/2, Repligen jumped 3 5/8 to 21 and Cytogen rose 1 to 18 1/8. But Amgen slipped 1 7/8 to 60 1/4 in profit taking after its Thursday report of a 209% third-quarter profit gain.

Meanwhile, drug firm Lilly lost 3 3/4 to 73 3/4. Its quarterly earnings rose 12%, which was less than expected. It also suffered a $12.2-million jury verdict in a case involving an anti-miscarriage drug.

* Marvel Entertainment rocketed 3 5/8 to 39 7/8 after the comic-book company reported third-quarter results above estimates.

* On the downside, Dole Food plunged 5 7/8 to 36 after reporting sharply lower quarterly earnings, apparently because of lower-than-expected banana prices. Rival Chiquita Brands lost 1 5/8 to 40 7/8.

* Owen-Corning Fiberglas tumbled 7 7/8 to 25 on weak third-quarter profit and a big boost in reserves for asbestos court cases.

Overseas, Tokyo share prices surged in active trading for the fourth day in a row, boosted by expectations of lower interest rates. The Nikkei average rose 454.97 points, or 1.9%, closing the week at 24,894.82.

Stocks closed higher in London. The Financial Times 100-share average rose 12.4 points to 2,601.1. In Frankfurt, the DAX average lost 1.26 points to 1,563.25.

In Mexico City, the Bolsa index shot up 20.35 points, or 1.5%, to a record 1,381.43.

Credit

Treasury bond yields eased on renewed faith that interest rates will fall in coming months.

The price of the Treasury’s 30-year bond, off 1 11/16 points Thursday, rose 7/8 point, or $8.75 per $1,000. That clipped the yield to 7.95% from 8.02% Thursday.

Many economists say bond traders overreacted after the Labor Department on Thursday said that consumer prices rose 0.4% in September. Traders feared that the report killed hopes the Federal Reserve will ease interest rates further to help the economy.

But Friday, bond dealers overseas began to snap up what they perceived to be bargain-priced Treasury issues, and the trend continued in New York.

“I think they just really took it apart late (Thursday), and people realized it had been overdone,” said Paul Suckow, trader at Oppenheimer Management.

Sentiment also was helped by a Commerce Department report Friday showing that housing starts fell 2.2% in September. Also, the Philadelphia Federal Reserve Bank reported continued weakness in the region’s economy in October.

“That suggests the economy is recovering weakly, and in time the Fed perhaps will need to reduce short-term interest rates,” said Hugh Johnson, senior vice president at First Albany Corp.

The federal funds rate, the interest banks charge each other for overnight loans, fell to 5.063% from 5.188% Thursday.

Currency

The dollar fell sharply against most currencies as traders took profits after the release of the housing starts report, which hinted at lower U.S. interest rates ahead.

“The dollar finished at new lows for the week against key European currencies,” said Marc Chandler, analyst with the economics firm IDEA.

In New York, the dollar slipped to 1.687 German marks from Thursday’s 1.697 and to 1.475 Swiss francs from 1.486. But it rose to 129.65 Japanese yen from 129.45.

Analysts said the dollar was also depressed by a news report quoting an unidentified Federal Reserve official as saying that the Fed viewed the 0.4% increase in September consumer prices as a blip, not something that would bar another lowering of interest rates.

Lower interest rates generally are bearish for the dollar because they lessen the value of dollar-denominated securities.

Commodities

Oil prices soared to post-Gulf War highs, wrapping up a week when traders decided that just about every bit of news or rumor about supplies was a reason to buy.

Light, sweet crude for delivery in November settled at $24.14 per barrel, up 21 cents, on the New York Merc. Oil had not closed that high since Jan. 22, during the early days of the Gulf War, when the final price was $24.18.

Trading focused on stormy weather in the North Sea, which forced one platform closure and delayed oil shipments. Given the tone of a market that has pushed up the per-barrel price by more than $2 the past month, that was enough to prompt more buying.

Crude declined only on Wednesday, when it fell 19 cents. For the week, oil for next-month delivery rose $1.05 a barrel.

Elsewhere, on New York’s Comex, October gold rose $2.20 to $362.20 an ounce. December silver advanced 3.5 cents to $4.16.