High-Tech Rally Boosts Dow To Record High

Big-name technology shares drove leading stock averages to new highs Tuesday, but the broad market struggled as interest rates jumped back above a troubling threshold in bond trading.

The Dow Jones industrial average erased an early 43-point skid and then flirted with the 7,400-mark, rising 37.50 to 7,383.41 for its second straight record close.

The technology-heavy Nasdaq composite index, which returned to record territory on Friday after a four-month drought, broke above 1,400 for the first time.

Several other broad-market indexes also closed at record highs for the second straight session, but analysts found the advance unimpressive, noting there were more declining issues than advancers on the New York Stock Exchange.

“There’s nothing conclusive about today’s trading except that tech stocks are the favorite investment again,” said Joe Battipaglia, chief investment strategist at Gruntal & Co.

Declining issues outnumbered advancers by a narrow margin on the New York Stock Exchange, where volume was totaled just 435.95 million shares as of 4 p.m.

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

NYSE

AT&T, up 1-3/8 at 37-1/2.

SBC Communications, up 3/4 at 57-5/8.

The telecommunications giants are discussing a $50 billion-plus merger that would be the largest in corporate history, The Wall Street Journal reported.

Micron Technology, up 4-3/8 at 42-5/8.

Texas Instruments, up 2-3/8 at 95-1/2.

Merrill Lynch made bullish projections about the Micron’s dynamic random access memory chip business, the Dow Jones News Service reported. The upbeat assessment helped lift DRAM rival Texas Instruments.

Nord Resources, down 5/8 at 2-3/4.

Investors were worried about Nord’s mining project in Sierra Leone, where soldiers toppled the government on Sunday in that West African country’s third coup in five years.

NASDAQ

3Com, up 3-1/2 at 46-3/4.

Analysts from PaineWebber and Smith Barney issued positive notes about the computer networking equipment company, the Dow Jones News Service reported. Both PaineWebber analyst Paul Weinstein and Smith Barney’s Therese Murphy said 3Com has been able to compete strongly with Intel.

United Dental Care, down 8 at 16-1/2.

The Dallas-based provider of dental coverage warned late Friday that its second-quarter results will be below analyst forecasts. On Tuesday, the stock was downgraded by Alex. Brown & Sons and Robinson-Humphrey.