Technology stocks lifted the Nasdaq composite index to a new closing high as a tame inflation report and an upbeat outlook from Intel raised Wall Street's optimism about computers and the Internet.
But the record-setting pace didn't spill over to blue-chip stocks, which struggled through most of the day amid profit-taking and nervousness about economic and political uncertainty overseas.
The Nasdaq composite rose 39.90 to 2818.13, topping the record close it set last Friday.
The Dow Jones industrial average fell 26.92, to 11,148.10, adding to its 26-point drop on Tuesday. The Standard & Poor's 500-stock index was up 4.61 at 1398.17.
High-tech stocks rose on positive news from chipmaker Intel, which reported late Tuesday its second-quarter earnings jumped 49 percent and that it expects a strong second half of 1999. Intel rose 2 5/8, to 68, as the most active Nasdaq stock.
Technology stocks also got a lift from reports that fund managers at Fidelity Investments were putting money back into the tech sector. The mutual fund company had backed off such stocks since February.
Other high-tech gainers included Amazon.com, up 8 7/8 at 135, Apple Computer, up 2 1/4 at 55-15/16, and Microsoft, up 1-5/16 at 94-15/16.
The stock market was also supported by news of stable inflation. The Labor Department said the producer price index, which measures inflation pressures before they reach the consumer, fell a smaller-than-expected 0.1 percent in June, the first decline in four months.
Also today, the Commerce Department said retail sales rose just 0.1 percent in June, a big slowdown from May's increase of 1.2 percent.
Both reports helped ease worries about a potential breakout of inflation, which could cause the Fed to raise rates again this year to slow U.S. economic growth.
Blue-chip stocks came under selling pressure as some investors took profits on the market's recent rise, which lifted the Dow to three closing highs in four sessions.
Stocks also were hurt by increasing fears about political tensions in Asia after the Chinese government accused Taiwan President Lee Teng-hui of trying to split his island from China.
There were also lingering concerns about Latin America's economic situation. The nervousness was set off Monday by comments from Argentina's presidential candidates, who hinted at a possible moratorium on repayment of the country's debt. That raised concerns that U.S. financial services companies would suffer losses because of unpaid loans.