Wall Street turned in a mixed performance today as a handful of blue-chip and high-tech companies surged but profit-taking from last week's big rally sent most other stocks lower.
Most of the gains came in the late afternoon. The Dow Jones industrial average closed up 85.63 at 11,089.52, and the Nasdaq composite reached its 14th record-high close in the past 17 sessions, rising 23.31, to 3392.56.
The Standard & Poor's 500-stock index fell 1.06, to 1420.94.
Microsoft, Coca-Cola and AT&T led the tightly focused rally, accounting for more than two-thirds of the Dow's increase.
"Once again it's the big guys leading the way, and it just keeps going on and on," said John Manahan, head of trading at Brown Brothers Harriman & Co. in New York.
Microsoft, which was up 3-13/16 at 89-13/16 as of 5:30 p.m. EST, began rising late Friday and continued its gains today after a federal judge appointed a mediator to oversee antitrust settlement talks between the company and the government. The surprise move dramatically increased chances for an out-of-court agreement.
Analysts said Coca-Cola and AT&T benefited from investors who sought the safety of blue-chip stocks given the market's lack of a clear direction. Coke was up 4 7/8 at 65 3/8, while AT&T was up 5-7/16 to 52.
A surge by several large Internet stocks--including America Online, up 4-3/16 at 162-13/16; Yahoo, up 8-1/16 at 226-13/16; and eBay, up 8 3/8 at 154-5/16--also contributed to the late-afternoon rally.
A sell-off in financial services stocks, prompted by inflationary fears brought on by rising crude oil prices, prevented the market from making further gains. J.P. Morgan fell 1-15/16, to 136-11/16, and Citigroup was off 1/2 at 56.
The market rallied last week on expectations that last Tuesday's interest-rate hike by the Federal Reserve would be the last for a while. But the drop in financial stocks today indicated the market was still wary about the possibility that the Fed might raise rates again if inflation appears to be accelerating.
Eugene Mintz, financial markets analyst at Brown Brothers Harriman in New York, said the market is getting difficult to predict on a day-to-day basis because it appears to have reached a peak last week, but may have a little more room to rise.
"We feel there's a broad top forming in the market," Mintz said.
The financial markets in general are expected to be quiet this week in advance of the Thanksgiving holiday.
In after-hours trading, Bloomberg News reported, Internet Capital Group jumped in extended trading after the holding company said it will split its common stock 2-for-1.
Internet Capital, which invests in online start-ups and takes them public, rose 9-9/16, to 192, after the Nasdaq Stock Market closed. The company also said it will sell 6 million post-split shares in a secondary stock offering and $250 million in convertible notes. The stock gained rose 15 1/2, to 182-7/16, in regular Nasdaq trading.