NEW YORK, DEC. 7 -- The Dow Jones industrial average slipped 12 points today as traders let their mounting concerns about a recession outweigh positive news on inflation and interest rates.
Stocks were subdued all day in response to the Labor Department's November report that showed unemployment up in nearly every region of the country and sector of the economy. The news prompted the Federal Reserve to lower its target for the federal funds rate by one-quarter of a percentage point to 7.25 percent. A number of secondary banks responded by lowering their prime interest rate by a quarter of a percentage point.
"The market seemed to be focusing more on the horrible employment numbers we saw this morning than on prospects for lower interest rates," said block trader Jim Irwin at Yamaichi International.
Stocks moved opposite to U.S. bonds, which soared in early trading on the employment news, and extended their gains at midmorning on evidence of falling interest rates. As stocks closed, the 30-year Treasury bond was up fully 1 19/32.
Oil prices were relatively unchanged while the dollar plunged in response to lower rates.
Widespread losses among money-center banks, which by Monday are widely expected to follow several smaller banks that today lowered their prime rates to 9.75 percent from 10 percent, hardly helped the stock market. Strong gains in the money centers were pillars of support for a succession of stock rallies earlier this week.
At the close, the Dow stood at 2590.10, down 12.38. Declines edged advances on the Big Board by a close ratio on moderate volume of 164 million shares. For the week, the Dow posted a gain of 30.45 points.
Among Dow stocks, IBM rallied 1 to 112 1/2 but only erased a third of Thursday's loss. Allied Signal lost 1 1/8 to 26 7/8 and American Express dipped 1 to 21 5/8.
Among active stocks, Humana tumbled 1 7/8 to 43 1/2 amid brokerage downgrades, while takeover target NCR eased 1 to 91 3/4 and unsolicited suitor AT&T inched down 1/4 to 29 7/8 as the big telephone company proceeded to line up bank financing for its intended hostile buyout.
Among money-center banks, Wells Fargo lost 2 7/8 to 55 1/4, First Chicago eased 1 3/8 to 19 5/8, First Interstate sank 2 1/8 to 23 7/8 and BankAmerica fell 1 1/4 to 24.
Security Pacific surrendered 3 to close at 22 after it announced it was planning a $100 million note offering, triggering speculation that additional loan losses have been uncovered.
MNC added 3/8 before closing at 5 after Chairman Alfred Lerner and a group of investors received Fed approval to buy at least a quarter of the bank company's outstanding shares.
Quaker State jumped 1 1/2 to 12 1/8 after a Business Week report that Elf Aquitaine, a large stockholder, might be eager for a friendly buyout or merger.
Orion Pictures fell 1 1/2 to 13 3/4 after South Korea's Samsung denied reports that it is interested in buying the studio.
The Dow transports slipped 4.12 to 909.67 while the utilities declined 1.19 to 210.08.
Among broad stock indexes, the Standard & Poor's 500 was down 1.32 at 327.75, the New York Stock Exchange Composite down 0.64 at 179.07, the Value Line down 0.50 at 240.81, the Amex Market Value up 0.10 at 306.45 and the Nasdaq Composite down 0.75 at 371.54.