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Blue-chip stocks dip for

third straight day

NEW YORK: Blue-chip stocks fell sharply for the third session running Friday, depressed by rising long term interest rates.

The Dow Jones industrial average ended 25.36 points lower at 4,618.30. For the week, the index of 30 blue chips lost 65.16 points.

In the broader market, declining issues led advances 1,333 to 842 on light volume of 265 million shares on the New York Stock Exchange.

The yield on the benchmark 30-year Treasury bond rose to 6.98 percent from 6.95 percent on Thursday. Bond prices fell on speculation of selling by hedge funds and central banks, traders said.

Meanwhile, technology stocks got a modest boost from Thursday's news that orders for computer chips hit record highs last month with the ratio between orders and sales, the so-called book-to-bill ratio, rising to 1.22.

That means that for every $100 in chips the industry sold in July producers received $122 in new orders.

The Nasdaq Composite, which is dominated by high-tech stocks, rose 3.50 points to end at 1,004.11.

"The fact that we had a tremendous book-to-bill and got a lukewarm response among most chipmakers is a point of concern," said Eugene Peroni Jr., chief technical analyst with Janney, Montgomery Scott.

Texas Instruments rose 2-3/8 to 149-1/2, Intel added 1-7/8 to 66-1/8 and Micron added one to 62-7/8.

Among other high-tech issues, Microsoft jumped 2-3/8 to 96-1/2 and Integrated Silicon Solutions lost 1/4 to 58-1/2.

Analysts said momentum has been breaking down over the last several weeks and they believed that stocks will have trouble moving forward unless a fresh catalyst emerges.

"We will be fortunate if stocks stage any advance," said Hugh Johnson, chief investment officer at First Albany Corp. "The mood has changed and we should consider ourselves lucky if we get a trendless market."

"Nothing has been able to lift the Dow. If the market behaves like this in good news, it will not take much to tip it over," said Gregory Nie at Everen.

Investors will be watching for clues to the economy's direction but investors have not been cheered by recent reports suggesting a possible need for further interest rate cuts.

The government reported Friday that retail sales edged lower last month while consumer prices rose modestly -- signs that the economic rebound widely expected in the second half of the year has been slow in developing.

Economists expect the Federal Reserve, after trimming short-term rates last month for the first time in nearly three years, will again loosen its grip on credit in coming weeks.

The central bank's policy arm meets Aug. 22. While economists said the Fed could act at that meeting, most look for policy-makers to defer another rate cut until September.

But that possibility did little to cheer investors Friday.

Among individual shares, Storage Tek added 1/2 to 29 in heavy trading. SoundView upgraded the stock to buy.

RP Scherer rose 1-3/4 to 39-7/8. Oppenheimer upgraded the stock to buy from outperform.

The Standard & Poor's composite index of 500 stocks fell 2.34 to 555.11.

The American Stock Exchange index lost 2.19 to 521.80.

The NYSE Composite index of all listed common stocks fell 1.48 to 297.77. The average share lost 18 cents.

The Wilshire Associates Equity Index - the market value of NYSE, American and Nasdaq issues - was 5,510.74, down 17.089, or 0.31 percent.-Reuter