Dow Tops 7,500 Despite High-Tech Pullback

The Dow Jones industrial average finished above 7,500 for the first time, giving it a stunning 50 percent gain in about a year and a half, as stocks staged another record-setting advance on Tuesday.

But technology shares sagged, weighing down the Nasdaq market, as investors remained nervous about slow summer demand for computers and related products.

The Dow average nearly surrendered a 94-point morning gain, but spiked higher over the last hour of trading, rising 60.77 to 7,539.27 for its third record close in a row.

Just two months ago, the Dow average languished about 1,150 points or 18 percent lower, besieged by worries about rising inflation and interest rates. It was less than 19 months ago, in November 1995, that the famed barometer of 30 big companies surpassed the 5,000-mark.

Without any major economic reports or big corporate deals to motivate investors, the overall tone of the day was notably sluggish.

“The market is the news, and it’s telling us that earnings are going to be better in the second half of the year than people were worried about,” said Peter Canelo, U.S. investment strategist at Morgan Stanley, Dean Witter.,

Advancing issues outnumbered decliners by a 6-to-5 margin on the New York Stock Exchange, where volume totaled 526.95 million shares as of 4 p.m., up from 465.58 million in the previous session.

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

NYSE

AMR, down 4-5/8 at 94-1/2.

Delta Air Lines, down 3-3/4 at 88.

UAL, down 2 at 75-1/4.

Northwest Airlines (Nasdaq), down 2-7/8 at 35-5/8.

Airline stocks fell sharply after analysts at major brokerage firms cut second-quarter earnings estimates on several carriers in response to disappointing May traffic results, the Dow Jones News Service reported.

Wendy’s International, up 1-3/8 at 25-1/4.

The fast-food chain’s shares rose on speculation that the company saw strong sales growth in May, the Dow Jones News Service reported, citing securities analysts.

NASDAQ

Ascend Communications, down 6-1/4 at 41-3/8.

Cascade Communications, down 4-5/16 at 28-9/16.

UBS Securities and SoundView Financial downgraded the computer networking company, the Dow Jones News Service reported. The drop in Ascend dragged down Cascade, which is being acquired by Ascend in exchange for Ascend stock.

Xylan, down 3 at 14-1/4.

The computer switching technology concern warned that its second-quarter earnings will be below Wall Street forecasts, blaming lower-than-expected orders and shipments of certain products.