NEW YORK, FEB. 12 -- The stock market gained ground in moderate trading today, mustering a relatively subdued response to news of a smaller U.S. trade deficit.

The Dow Jones average of 30 industrials rose 21.72 to 1983.26, extending its gain for the week to 72.78 points.

Big Board volume totaled 177.19 million shares, down from 200.76 million in the previous session.

Before the market opened, the Commerce Department reported that the nation's trade deficit narrowed to $12.20 billion in December from $13.22 billion the month before.

The figure came in at the low end of analysts' estimates, and lent support to the growing belief that the international trade situation is improving. American exports set a record for the second straight month.

But analysts said traders in the stock and bond markets didn't see the news as purely positive.

By late afternoon, the Treasury's 30-year bond was off seven-eighths of a point, or $8.75 for every $1,000 in face value. It rose more than $10 shortly after the trade report was released before quickly reversing course.

The dollar soared shortly after the trade figures were announced, rising above 130 Japanese yen for the first time since mid-December and trading at 131.15 yen in London from 129.95 earlier in Tokyo. Later, in New York, the dollar stood at 130.925 yen, up from 129.265 late Thursday.

MCA climbed 5 1/4 to 45. The company said it was notified by Donald Trump, the real estate developer and financier, that he had acquired a block of MCA stock and might increase his stake to as much as 24.9 percent.

Standard & Poor's index of 400 industrials rose 2.22 to 296.07, and S&P's 500-stock composite index was up 1.68 at 257.63.

The Nasdaq composite index for the over-the-counter market gained 2.23 to 353.27. At the American Stock Exchange, the market value index closed at 277.00, up 2.60.