Stocks finished on a mixed note after computer-driven buy programs erased a 17-point decline in the Dow Jones industrial average. The Dow rose 0.28 point to 3,455.92.
* The yield on the Treasury's bellwether long bond sank to another record low in light trading marked by sharp price gyrations.
Wall Street continued with its basic 1993 theme: Consumer stocks are out, industrial stocks are in.
Retail issues fell for a second day, as traders reacted to prospects for a so-called national sales tax.
Meanwhile, many major industrial names shot higher, helped by surprisingly good first-quarter earnings from key companies.
Overall, however, the broad market was lower, despite the late computerized-buying activity. Declining issues edged out advancers on the New York Stock Exchange, as Big Board volume totaled 259.5 million shares.
"There's a dichotomy that's been going on all week," said George Pirrone, senior trader at Dreyfus Corp. "The Dow Jones industrials continue to find their way higher, but right below the averages, there's a significant amount of deterioration. Somewhere along the line, something's got to give."
Analysts and traders are becoming increasingly worried that stocks have become too pricey, and that at least a mild correction--to about 3,100 on the Dow--is in the offing.
That decline could be led by the same consumer stocks that have already weakened substantially this year, some experts say.
Among Thursday's highlights:
* The prospect of a national sales tax hurt retailers, many of which were hit on Wednesday when premier discounter Wal-Mart warned of slowing sales growth this year.
Wal-Mart, down 1 3/4 on Wednesday, inched up 3/8 to 27 5/8. But most other retailers were lower for a second day. May Department Stores dropped 2 1/2 to 73 1/4, Sears lost 1 1/4 to 52 5/8, Woolworth fell 3/4 to 29 7/8, Gap sank 1 5/8 to 28 3/4, Toys R Us gave up 1 1/4 to 38 1/4, and Ross Stores was off 7/8 to 16 3/8.
* Many other consumer issues also weakened. Campbell Soup fell 1 to 38 3/4, General Mills lost 1 to 66 3/4, Schering-Plough gave up 1 to 58 3/4, and Johnson & Johnson eased 1/2 to 38 3/4. Also, Gillette tumbled 2 to 54 after reporting a 10% quarterly gain in operating earnings, but on flat sales.
* The market's strength was in industrial issues. Lumber stocks advanced, for example, after Georgia-Pacific and Weyerhaeuser both reported surprisingly strong first-quarter earnings. G-P jumped 3 5/8 to 65 3/4, and Weyerhaeuser leaped 1 3/4 to 45 1/2.
Other industrials up on good earnings included aerospace firm Sundstrand, up 2 1/2 to 41 1/4; paint and glass giant PPG Industries, up 4 1/4 to 73 1/2, and parts distributor W. W. Grainger, up 1 7/8 to 61 3/4.
* Technology stocks were broadly lower. Microsoft fell 1 7/8 to 87 1/8 after posting quarterly earnings on target with estimates.
* Among brokerage issues, Charles Schwab sank 3 1/8 to 35 1/8 despite reporting quarterly earnings up 20%. But Jefferies Group added 1 to 29 3/4 after reporting a 10% rise in operating earnings.
* Among Southland issues, SCEcorp added 3/8 to 48 1/2 after the parent of Southern California Edison reported earnings and declared a 2-for-1 stock split, effective June 1. Also, Pacific Enterprises, parent of Southern California Gas, inched up 1/8 to 24 3/8 after Standard & Poor's revised Pacific's credit outlook to positive from stable.
Overseas, London's FTSE-100 stock index lost 2.4 points to 2,839.7. In Frankfurt, the DAX index added 2.77 points to 1,675.21.
In Tokyo, the Nikkei average rose 142.46 points to 20,675.84.
Long-term bond yields sank to new modern lows as sentiment for lower interest rates overwhelmed an upbeat economic report.
The yield on the Treasury's 30-year bond dove to 6.71% from 6.75% Wednesday. The new yield was the lowest since the Treasury began regular auctions of 30-year bonds in 1977, and surpassed the prior low of 6.72% early in March.
Interest rates have been falling across the board in recent weeks, as investors have recovered from a March inflation scare. With recent government reports pointing to a slowing economy, expectations are rising that the Federal Reserve may be forced to lower interest rates again.
Thursday, news that initial claims for jobless benefits fell by 38,000 last week, the biggest drop in more than eight months, failed to encourage optimism about the economy in the bond market.
Still, some traders warned that activity has been light in recent days, which could make the latest decline in long rates suspect.
Precious metal prices fell back as a stronger dollar prompted selling, wiping out most of the sharp gains posted a day earlier on worries about unrest in South Africa.
On New York's Commodity Exchange, gold for April delivery fell $2.50 to $337.20 an ounce, and May silver tumbled 6.7 cents to $3.88.
On the New York Merc, July platinum eased $1.20 to $368.10 an ounce.
Also on the Merc, light, sweet crude oil for May delivery fell 18 cents to $20.22 a barrel.
In foreign exchange markets, the dollar moved higher against the German mark but weakened anew against the Japanese yen.
After two days of losses, the yen flirted with all-time highs against the dollar on renewed speculation that the Japanese government favors a stronger currency to help whittle down the nation's trade surplus with the United States.
In New York, the dollar was worth 113.10 yen at the close, down from Wednesday's 113.88. But the dollar rose to 1.606 German marks from 1.594.
Market Roundup, D6