Dow off 77
as small caps gain

NEW YORK -- Leading stock measures were mostly lower today as investors continued to shift money from a pricey blue-chip sector into smaller-company shares.

The Dow Jones industrial average fell 77.35 to 7,782.22. The index of 30 big companies had managed to erase an early 60-point deficit, bobbing into positive territory before falling again by midday.

Decliners outnumbered advancers by an 8-to-7 margin on the New York Stock Exchange, with 1,313 up, 1,507 down and 584 unchanged. NYSE volume was light again, totaling 449.05 million shares up from yesterday's sluggish tally of 388.97 million.

The Standard & Poor's 500-stock list fell 7.14 to 913.02, the NYSE composite index fell 2.67 to 475.36, and the Nasdaq composite index fell 10.29 to 1,591.28.

The Russell 2000 index of smaller companies rose 0.22 to 418.31, and the American Stock Exchange index, dominated by smaller firms, rose 0.45 to 647.30.

The blue-chip sector struggled despite an afternoon turnaround in the bond market, where interest rates initially rose toward their highest level since early July before edging lower again.

Bonds slipped in the morning after the latest in a series of economic reports suggesting a vigorous economic pace that could aggravate inflationary pressures.

The robust readings helped fuel some nagging fears that the economy may be accelerating too quickly for the Federal Reserve's tastes. Investors fear the central bank will raise interest rates in the coming months.