Gaynor was arrested last night after he came to the Police Administration Building to ask about his 1988 Nissan, which had been seized by police from the area of the shooting, police said.
Homicide Sgt. Dennis Murray said Gaynor was one of two gunmen inside the store who stood 10 feet apart - with the children between them at the video machines - and fired at least five shots at each other.
"Once the shooting started, the kids were trying to take cover and they got caught in the middle," Murray said.
Yates, of the 1600 block of North Robinson Street, was shot in the head about 3:30 p.m. Monday inside Duncan's Variety & Grocery Store. He died on the operating table later Monday afternoon at Mercy Catholic Medical Center's Fitzgerald Mercy Hospital.
Marcus' brother, Malcolm, 6, was struck in the left buttock. His cousin, Micha McCode, 8, of the 5900 block of Springfield Avenue, suffered a graze wound in the right foot.
Both were in stable condition last night at Fitzgerald Mercy Hospital.
Police are still looking for two other suspected drug dealers - known to them as "Baby Dan" and "LaLa." - believed to have been involved in the shooting.
All three men are known Jamaican drug dealers who operate drug houses in Southwest Philadelphia, Murray said.
"We don't have information that they are rival drug dealers," Murray said. "We don't know that there was any friction between these people over
drug dealing. But they were all drug dealers."
Police gave this account of the shooting:
Shortly before 3:30 p.m. Monday, Gaynor drove up to the corner and stopped outside a pay phone, where the man known as Baby Dan was talking on the phone. Gaynor began staring at Baby Dan.
"They had a staring contest and started arguing," Murray said. "Baby Dan asked him what he was looking at. It went from there and escalated."
Murray said the dispute that preceeded the shooting did not appear to be
drug-related. "We're not quite sure what it was about," he said.
Gaynor then left in the car but returned on foot a short time later. Baby Dan was inside the store, and LaLa was outside.
"He entered the store, and they continued the argument," Murray said. ''That's when Michael Gaynor punched Baby Dan in the face. They both subsequently produced guns and started shooting at each other," Murray said.
At some point before the shooting, one of the men, believed to be Baby Dan, issued the command: "Anybody not playing video, get out," according to police.
After the boys were hit, the men fled the store. LaLa, who police said is an associate of Baby Dan's, fired at Gaynor as he ran south on 60th Street. At least three shots were fired outside the store, Murray said.
Murray said police had been preparing warrants for Gaynor's arrest when he arrived at the Police Administration Building on his own. He wanted to ask about his car, a white 1988 Nissan 300ZX.
"His car was seized during the investigation," Murray said. "He came in to talk about his car. We had him identified as one of the shooters."
The car, which had been parked near the shooting scene, was taken to a police garage at 26th and Master Streets, searched, then taken to the pound.
Murray said detectives were trying to get complete identities for Baby Dan and LaLa before issuing any arrest warrants.
Murray said no weapon had been recovered. He said police were still running ballistics tests to determine the caliber of the gun that fired the shots that hit the children. He said it appeared to be a large-caliber gun, either a .380 caliber or a 9mm handgun.
Funeral services for the child will be held at 8 p.m. tomorrow at Holy Temple Church, 60th and Callowhill Streets. They will be preceded by a viewing beginning at 5 p.m.
The shootings prompted an gathering of several hundred people Wednesday night inside a Southwest Philadelphia church calling for an end to the drug dealing and violence in their neighborhood.