Stock prices were mixed as strength in Internet and computer stocks helped the technology sector outperform the broader market.
The Nasdaq composite index rose 28.82, to 2771.86, a new closing high that beat the record of 2743.04 set on Wednesday. The Nasdaq, which is dominated by technology stocks, has achieved a record high close in five of the past six trading sessions.
The Dow Jones industrial average fell 60.47, to 11,126.89. The blue-chip index fluctuated between negative and positive territory for much of the session, rising as much as 28 points from Wednesday's record close of 11,187.36 before giving up ground.
Nasdaq's strength came from a wide array of technology shares. Yahoo rose 2 5/8, to 164-7/16, after reporting late Wednesday that its second-quarter earnings easily topped Wall Street expectations.
Apple Computer rose 4 5/8, to 54 1/2, after BancBoston Robertson Stephens upgraded its outlook on the stock. An analyst at the investment firm cited strong sales of Apple's iMac computer. Dow component Hewlett-Packard rose 6 1/2, to 105-13/16.
But while tech stocks built on their recent gains, the broader market struggled. Alan Skrainka, chief market strategist at Edward D. Jones & Co. in St. Louis, said the continued strength of the U.S. economy, underscored today by strong reports from the nation's biggest retailers, has stunned many investors.
"Investors are wrestling with a tug of war between strong corporate profits and higher interest rates," he said. "A strong economy produces both."
Indeed, strong second-quarter profit forecasts have propelled markets to record levels in recent sessions, but even good news failed to prop up many faltering stocks today.
General Electric beat analysts' estimates by a penny but its stock, which rose sharply Wednesday in advance of the report, slipped 1-1/16, to 116 7/8, as investors locked in profits from that gain.
Meanwhile, other companies warned of weakness. Airborne Freight said late Wednesday that it will miss analysts' expectations by as much as 18 cents per share. Its shares fell 1-5/16 today, to 25 7/8, dragging other package delivery company stocks with it.
Philip Morris rose 3/4, to 38 5/8. Its shares had dropped in late trading Wednesday after a Florida jury ruled that tobacco makers are liable for making a defective product that causes emphysema, lung cancer and other illnesses. The verdict, if it stands, is expected to cost the tobacco industry billions in damages.
Today, though, analysts said the verdict was no real surprise. Investors bought Philip Morris stock back on the belief that legal wrangling may delay payments to plaintiffs for years.
Stocks were also knocked off kilter by a vacillating bond market. Bond prices initially tumbled, with the price of the 30-year Treasury bond dropping $5 per $1,000 in face value and its yield rising to 6.08 percent, from 6.04 percent late Wednesday. The rising yield served as a reminder to investors that higher interest rates are taking hold and could threaten earnings in future quarters.
But by afternoon, bond prices recovered, mostly because of improvement in European bond markets. The yield on the 30-year Treasury bond slipped back to 5.99 percent by the afternoon, just under the 6 percent level that tends to set off selling in stocks, as the price rose $7.19 per $1,000.