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Blue-chips rise after

shaking off big losses

NEW YORK: Blue chip stocks snapped a four-session losing streak on Thursday, clawing back from an early slump of 40 points with the help of selective bargain-hunting.

The Dow Jones industrial average ended 11.27 points higher at 4,701.42, up from four straight days of losses totalling 42 points.

But in the broader market, declining issues led advances 1,222 to 942 on active volume of 353 million shares on the New York Stock Exchange.

But the Nasdaq index fell for the fifth consecutive day, ending with a loss of 1.05 points at 982.70, despite some bargain-hunting in the technology group.

Bellwhether IBM Corp. rose 1-1/2 to 109 and Microsoft Corp. was up 2-1/8 to 91-1/8. The losers included Sybase Inc., which lost 2-1/8 at 34-3/8, Applied Material, off 3-1/4 at 92-1/2 and Cisco Systems, off 1 at 52-1/4.

Analysts said the recent weakness in high-tech stocks has sapped energy from the recent bull market.

"Over the last few days the techs have gotten whacked. But the recovery today is not a sustained move," said Phil Roth, chief technical analyst at Dean Witter Reynolds. "I think it's the beginning of a correction that will last a few weeks."

Phil Orlando, a senior vice president at First Capital Advisers, said the stock market's performance was still impressive in the face of a jump in long-term bond interest rates.

The yield on the 30-year Treasury bond rose to 6.93 percent from 6.86 percent on Wednesday, after the Labour Department reported that new jobless claims last week tumbled to the lowest level in six months.

It said first-time filings for state jobless benefits fell 51,000 to 321,000 in the week ended July 29, the largest drop in a year. The decline brought claims to their lowest level since 319,000 in the week of Feb. 4.

Among special situations, the stock of health maintenance organisations fell after Humana Inc. and United Healthcare Corp. posted quarterly earnings that fell below Wall Street's estimates.

United Healthcare fell 2-5/8 to 42-3/8, Humana shed 1-3/8 to 18-5/8 and U.S. Healthcare lost 1/2 to 31-1/8.

"Traders took United Healthcare and Humana and shot them," Orlando said.

Monthly retail store sales rose overall in July but not as robustly as Wall Street had expected. While last month's heat wave stoked sales of air conditioners at discounters and department stores like Sears Roebuck, several clothing store giants posted declines as consumers continued to spend cautiously.

Sears was unchanged at 32-5/8, The Limited rose 7/8 to 20-3/8 and The Gap slipped 1/8 to 33-3/4.

Southern Pacific Rail rose 2-1/4 to 21-7/8 and Union Pacific gained 1/2 to 65. After the close, Union Pacific said it was in a pact to merge with Southern Pacific in a $5.4 billion deal that will create North America's largest railroad.

Rumours of the deal ignited interest in rail stocks. Conrail rose 1-1/2 to 62-1/2, CSX added 1-1/8 to 84-1/8 and Norfolk Southern was up 1-5/8 to 73-7/8.

Airline stocks staged a comeback after a recent selloff. Delta rose 1-1/4 to 75-7/8, American Airlines' parent AMR Corp. added 3/4 to 72-1/2, and United Airlines's parent UAL Corp. was up 1-1/8 to 145-1/4.

The Standard & Poor's composite index of 500 stocks fell 0.05 to 558.75. The American Stock Exchange index was off 0.31 to 522.85.

The NYSE Composite index of all listed common stocks fell 0.23 to 299.93. The average share was down 3 cents.

The Wilshire Associates Equity Index - the market value of NYSE, American and Nasdaq issues - was 5,520.728 down 5.728 or 0.10 percent.-Reuter