NEW YORK, DEC. 10 -- The Dow Jones industrial average crept ahead nearly 7 points today in narrow trading as a strong bond market provided stiff competition for stocks.

Today's action was a follow-through to Friday's activity, when the Dow languished with a 12-point loss but the U.S. 30-year Treasury bond surged 1 3/4 points. Bonds were up another 21/32 as equities closed today.

Strategist Michael Metz at Oppenheimer said, "This continuing dichotomy between stocks and bonds is important in that it shows people as growing more fearful of corporate earnings problems during a recession." While a deeper recession would hammer corporate balance sheets, it would eventually -- in theory -- drag down interest rates and produce capital gains for bondholders.

Technician Paul Kronlokken at Piper Jaffray and Hopwood said, "I don't know exactly where the threshold is where a deep recession looms and bonds launch into a bull market while stocks are trashed. But we may be getting fairly close to that point."

At the close, the Dow stood at 2596.78, up 6.68, while advances ran virtually even with declines on the Big Board on lightly moderate volume of 138 million shares.

More bad news from the banking industry, in the form of a battery of grim announcements from money-center Security Pacific, also served to keep stock prices in check. The giant California bank announced that it will probably lose $320 million to $360 million on the quarter, that it will add $600 million to loan-loss reserves and that it will shut down its merchant banking unit and take a $200 million charge.

Financial stocks had provided the backbone of rallies early last week, so in early trading today there was some trepidation that the news on Security Pacific would continue the deterioration in bank stocks that set in later last week. But by midmorning, it was clear the market accepted the news as having cleared the air.

Among money-center banks at the close, while gains were not as outstanding as some of those posted at times last week, the stocks did prove resilient. Security Pacific closed up 1 at 23, Wells Fargo gained 1 1/4 to 56 1/2, First Interstate tacked on 7/8 to 24 3/4 and Manufacturers Hanover rose 1 to 24.

Among Dow components, Boeing slipped 5/8 to 44 7/8 after poor press on the aerospace industry in this week's Barron's magazine. General Dynamics and McDonnell Douglas also fell in response to reports of cost overruns on the A-12 attack plane. McDonnell Douglas closed down 1 3/8 to 43 5/8, while General Dynamics eased 1/4 to 24 3/8.

Among active stocks, NCR dipped 1 3/4 to 90 on mounting conviction that AT&T is pursuing the company at the announced $90-a-share bid and no higher. Last week, NCR announced it would consider a bid of $125 per share, but AT&T immediately launched a hostile tender offer.

Among stocks in the news, Fluor Corp. rose 1 1/8 after announcing higher fourth-quarter earnings.

Among percentage losers, disk-drive manufacturer Conner Peripherals slid 2 to 26 7/8 in New York Stock Exchange trading, but analysts were unaware of any reason for the sell-off. The stock has lately moved to the NYSE from the Nasdaq system.

On the Nasdaq market, Dell computer was heavily traded, closing up 3/4 to 15, while Apple slid 3/4 to 41 3/4.

The Dow transports finished unchanged at 909.67, while the utilities inched up 0.37 to 210.45.

The Standard & Poor's 500 was up 1.14 at 328.89, the NYSE Composite up 0.51 at 179.58, the Value Line down 0.24 at 240.57, the Amex Market Value up 0.16 at 306.61 and the Nasdaq Composite down 0.07 at 371.47.