Blue-chip stocks pulled back slightly, but technology shares rallied for a fifth straight session, pushing the Nasdaq Stock Market toward its first record high since late April.
The Dow Jones industrial average finished 39.58 lower at 10,815.98 after recovering from an afternoon slide of nearly 100 points.
The Nasdaq composite index jumped 2.6 percent to finish 66.84 higher at 2630.28. The index has now rallied 232 points, or nearly 10 percent, in just five sessions, and it sits just 22 points from its all-time best close of 2652.05, set on April 26.
The Dow, which last week gained 365 points, remains about 200 points below its May 3 closing record of 11,014.69. Still, the measure of 30 blue-chip companies holds a surprising gain of more than 1,600 points, or nearly 18 percent, for 1999.
Broader stock indicators were mostly positive today, but they posted slimmer gains than the tech-dominated Nasdaq market.
Technology shares fell sharply in recent weeks amid fears that the Federal Reserve will raise interest rates to slow the economy and contain inflation. But with investors now expecting Fed Chairman Alan Greenspan to seek only a small increase in rates, the discounted prices in the technology group are looking more attractive.
"The conventional wisdom is that interest rates are a done deal, based on what Greenspan said last week" in an appearance before Congress, said Richard Dickson, a market analyst at Scott & Stringfellow in Richmond.
Dickson also said the market is growing more confident about profit reports for the nearly ended second quarter, but he cast doubt on how long any rally might last at these levels.
"I think the market can make new highs, but I don't see it going much farther," he said.
Among leading Nasdaq technology names, Dell Computer rose 2-15/64, to 38-15/16; Microsoft rose 3-15/16, to 88-15/16; Cisco Systems rose 3 3/4, to 123 1/8; and Intel rose 1 7/8, to 56-13/16.
IBM rose 4, to 124 3/4, and Hewlett-Packard rose 2 1/8, to 93 7/8, to cushion the Dow, which was yanked lower by Alcoa, down 4-3/16 at 63 3/8. Energy shares also weighed on the Dow, with Chevron falling 2 1/2, to 90-11/16, and Exxon falling 2 1/8, to 78 1/4.
Internet stocks also continued to rebound from a steep decline, with Yahoo rising 14-7/16, to 158 7/8, and Amazon.com rising 12-3/16, to 123 1/2, in Nasdaq trading.