Dow Takes Breather After Three-Day Streak

The Dow Jones industrial average stumbled a bit Thursday, but most popular stock measures set new highs again as interest rates hit another 17-month low in the bond market.

The Dow fell 32.28 to 8,222.61, snapping a streak of three straight record highs. The gauge of 30 big companies was weighed down by several of its economically-sensitive components, which struggled after a report confirming that the business activity slowed considerably in the second quarter.

But that same report on the gross domestic product - the tally of all goods and services produced in the United States - also served as tonic for the bond market, which posted sizable gains for the third straight day and pushed most stock indicators further into record territory.

“The predominant opinion now is that the economy is not getting ahead of itself, and that’s why the bond market continues to rally,” said Brian Belski, a technical analyst at Dain Bosworth in Minneapolis, discounting the significance of the Dow’s retreat. “The blue-chips are taking a little bit of a respite after making such strong gains of late.”

Advancing issues outnumbered decliners by a 3-to-2 margin on the New York Stock Exchange, where volume was heavy again at 547.87 million shares as of 4 p.m., down slightly from Wednesday’s busy pace.

Some of the stocks that moved substantially or traded heavily Thursday: NYSE

Provident Companies, up 5-3/8 at 63-3/8.

The insurer reported better-than-expected second-quarter results and announced plans to raise its dividend, buy back stock, and split its shares 2-for-1.

Converse, down 4-3/16 at 11-7/16.

The sneaker maker reported disappointing second-quarter profits and cautioned that its second-half results may also be disappointing.

Wendy’s International, down 2-14/16 at 24-1/2.

Several brokerages downgraded Wendy’s after the fast-food chain reported weak second-quarter earnings and issued a cautious outlook for the remainder of the year.

NASDAQ

Dell Computer, up 3-1/4 85-1/2.

Morgan Stanley Dean Witter raised its 1997 and 1998 earnings estimates for the computer maker, the Dow Jones News Service reported. The investment firm maintained its “outperform” rating on Dell.

Starbucks, up 1-5/8 at 40-15/16.

The Seattle-based coffee retailer’s sales from stores open at least a year rose 7 percent in July.

Smartalk TeleServices, up 3-7/8 at 17-3/4.

The Los Angeles-based company agreed to buy closely held Conquest Telecommunications Services of Dublin, Ohio, for stock valued at about $67 million.