On Friday, the Dow rose 84.77 to close at 11,031.59, its second record high close for the week. Broader stock indicators ended mixed Monday. Investors sold big-company stocks and growth stocks, which depend on lower interest rates, although yields actually declined in the bond market. The 30-year Treasury yield fell to 5.78 percent from 5.81 percent late Friday, but it is still up more than 0.60 percentage point since April 20, and investors are concerned that it will continue to rise. First Albany Corp. Rising rates typically prompt some selling in financial services stocks and also in stocks trading at high prices relative to their earnings projections, Johnson said.
Higher rates tend to eat into corporate profits.
But investors bought the stocks of basic-materials companies, believing that those industries will benefit from higher prices. Internet stocks were higher on reports USA Networks will abandon its bid to acquire Lycos after concluding it can't win approval from Lycos shareholders. Meanwhile, merger news moved other stocks. Neither company would confirm the talks, and The Journal quoted sources close to the deal as saying it faces enormous hurdles. The NYSE composite index fell 1.90 to 639.34, and the American Stock Exchange composite index fell 0.21 to 787.08.