Technology Shares Cushion Drop

Technology and smaller-company shares kept the stock market on a winning track Tuesday, filling the leadership vacuum left by a tired blue-chip sector.

The Dow Jones industrial average fell 10.91 to 8,187.54, but broader stock measures rose, led by the technology-rich Nasdaq composite index, which closed at a record high for the fifth consecutive session.

The Russell 2000 index of smaller companies closed at a new high for the second session in a row, under-scoring concerns that last month’s record-setting rally has left the blue-chip sector extremely overpriced.

While analysts called it encouraging that the Dow has surrendered just 67 points in the four-session slump that followed Wednesday’s record close at 8,254.89, some expressed concern over the movement into lesser-known stocks.

“The tertiary stocks, those $10 and under, have come to life,” said Ricky Harrington, technical analyst at Interstate/Johnson Lane in Charlotte, N.C. “That can be symptomatic of tail-end speculation. Sometimes you see that just before you get a correction.”

Advancing issues outnumbered decliners by a 9-to-7 margin on the New York Stock Exchange, where volume was heavy at 525.67 million shares as of 4 p.m., up sharply from Monday’s pace.

Some of the stocks that moved substantially or traded heavily Tuesday:

NYSE

Aetna, down 14-1/4 at 102-3/4.

The Hartford, Conn.-based insurer reported second-quarter earnings that met analysts forecasts, but gave a disappointing assessment of business conditions, analysts said.

Aeroflex, up 2 at 8-1/2.

Oppenheimer initiated coverage of the stock with a “buy” rating, the Dow Jones News Service reported.

NASDAQ

Oxford Health Plans, down 3-11/16 at 82-1/8.

The health insurer reported a 66 percent increase in its second-quarter earnings, meeting most forecasts.

Lone Star Steakhouse & Saloon, down 4 at 18.

The restaurant company warned that it expects to report disappointing results for its third quarter ended Sept. 9 because of heavy competition for casual dining customers.

Showscan Entertainment, up 3/16 at 2-7/8.

Iwerks Entertainment agreed to acquire the rival motion-simulation picture company for stock valued at $27.5 million.

Covenant Bancorp, down 3 at 18.

First Union, the nation’s sixth-largest banking company, agreed to acquire Covenant for about $78 million in stock.