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Blue-chips stumble, Nasdaq high for 2nd day

NEW YORK: Blue-chip stocks fell for the third day in a row on Thursday, while a relentless rally in technology stocks pushed the Nasdaq market to a new high for a second straight day.

The Dow Jones industrial average ended off 8.45 points at 4,630.63. In the broader market, advancing issues beat losers 1,137 to 1,061 on heavy volume of 354 million shares on the New York Stock Exchange.

The technology-laden Nasdaq composite index rose 3.49 points to 1,029.24, in this week's third record closing high. It set records of 1,025.75 on Wednesday and 1,012.44 on Monday.

"There is still a lot interest in over-the-counter names, and the technology (stocks) are always played," said Oppenheimer's head of over-the-counter trading Jack Bayer.

Analysts said investors in recent sessions also were turning their back on the range-bound Dow stocks, seeking stocks that may bring stronger earnings growth.

Excitement caused by last week's hot initial public offering of Netscape Communications Corp. also was pulling in individual buyers of small stocks. Traders pointed to Thursday's inital public offering by Redhook Ale Brewery Inc. as a sign of the popularity of the smaller issues.

Redhook, a microbrewery, closed up 10 at 27, a 59 percent jump from its starting price of 17.

"People will always be interested in what they're familiar with, something they understand," said Douglas Myers, vice president of trading at Interstate/Johnson Lane.

The recent rise in the dollar, which favours smaller companies focused on the domestic market over multinationals whose overseas earnings can be hurt by a higher dollar, also weighed on blue-chip stocks, analysts said.

Among the Dow 30, Philip Morris Cos Inc. slipped 3/4 to 72-1/2 and General Motors Corp. shed 1 to 47-3/8.

Jack Regan, market analyst at Josephthal, Lyon & Ross called Thursday a "push-pull day" with money managers seeking to gauge the next market move. "There's a little bit of profit-taking, a little bit of a consolidation," he said.

The Philadelphia Federal Reserve said its August index of general business conditions rose to 4.4 from minus 23.7 in July, showing more strength in the region than economists had forecast. Analysts said the data further reduced chances that the Federal Reserve would cut interest rates at a policy making meeting Tuesday.

Among technology stocks pacing the Nasdaq market, Novell Inc. gained 1-9/16 to 20-15/16. CNBC business television reported International Business Machines Corp. may be weighing a bid for the networking software company.

IBM, which rose 1-1/4 to 113-5/8, and Novell declined to comment.

Cirrus Logic Inc. added 2-7/8 to 54-1/4 and Microsoft Corp. added 3/8 to 99-1/8. Others, however, cooled, including Intel Corp., which dipped 1-1/8 to 65-5/8.

Deere & Co. tumbled 2-1/2 to 83-3/4 after reporting fiscal third quarter results that fell below Wall Street consensus expectations and saying it expected lower fourth quarter earnings.

General Dynamics Corp. said it was buying Bath Iron Works, a privately owned shipyard in Bath, Maine, for $300 million in cash. Its shares ended up 3 to 52-1/8.

The Standard & Poor's composite index of 500 stocks fell 0.93 to 559.04.

The American Stock Exchange index rose 2.39 to 528.86.

The NYSE Composite index of all listed common stocks fell 0.21 to 299.63. The average price per share fell 2 cents.

The Wilshire Associates Equity Index the market value of NYSE, American and Nasdaq issues was 5,570.477, up 1.927, or 0.03 percent.-Reuter