U.S. bond yields rose to a 13-month high today, closing above 6 percent, as investors remained concerned that a Federal Reserve policy-setting committee will raise interest rates at its next meeting later this month.

Yields on the benchmark 30-year Treasury bond rose to 6.02, its highest since April 29, 1998, after flirting with the 6 percent level Tuesday. All told, 30-year bond yields have climbed nearly a full percentage point this year as inflation fears have taken hold in the market. Bond prices move in the opposite direction of yields, meaning bond investors have lost about 10 percent so far this year. The benchmark bond's price fell $4.06 per $1,000 in face value today.

The 6 percent level is considered psychologically important for the market. Higher interest rates can lower corporate profits, while higher yields may make bonds more attractive, thus putting pressure on stock prices.

The Dow Jones industrial average fell 75.35 to close at 10,690.29, extending Tuesday's 143.74-point decline. But technology stocks rallied on reports of higher semiconductor and computer sales. The Nasdaq composite index, which has a high representation of technology stocks, rose 44.79, to 2519.35. The Standard & Poor's index of 500 stocks rose 1.31, to 1318.64.

But several market watchers said the rise in bond yields was comforting rather than stressful.

"The bond yield today is much better aligned with the strength of the economy and the possibility of inflationary pressures than it was at the beginning of the year," said Mickey Levy, chief economist at NationsBanc Montgomery Securities.

Early this year the key bond rate was slightly above 5 percent, but economic growth was booming, unemployment was low and the Fed was keeping interest rates stable.

"The markets' expectations of inflation were much too sanguine at the beginning of the year," Levy said. "They thought inflation was dead and gone."

But he added that he does not think bond rates will go much higher, even if short-term interest rates rise. Bond rates have already moved nine-tenths of a percentage point since the beginning of the year -- which he called a "whopping" move.

Nancy Lazar, an economist at International Strategy & Investment, a money-management firm, said her firm's survey of housing starts has declined 6 percent in the past four weeks, an early sign that the economy is slowing. If that turns out to be the case in upcoming economic growth statistics, the bond market should start to move lower, she said.

"The stock market has been quite resilient despite the fact that bonds have gone up," she said. "If the economy starts to slow, stocks will continue to do well."

Analysts say stocks may have trouble picking up momentum at least until Friday, when the government will report on producer prices -- the latest sign of whether inflation is indeed rising. And the volume of stocks traded was very light as investors continued to hold off on any new purchases or sales until they receive a clearer indication of the Fed's next move.

Still, shares of technology bellwethers were mostly higher today after the Semiconductor Industry Association said 1999 sales are expected to grow faster than anticipated. The group said growing acceptance of the Internet and electronic commerce is driving chip sales.

Research firm International Data Corp. also issued a positive forecast for global shipments of personal computers, boosting PC makers including Dell, which rose 1 1/2, to 35 1/2.