Dow drops 44

Associated Press

NEW YORK - Stocks closed lower today as lingering fears about rising interest rates prompted investors to collect profits from Friday's big rally. The Dow was down 44.32 to close at 11,034.13. The blue chips stayed in a narrow range throughout the session.

Broader stock indicators ended with slim losses. The Standard & Poor's 500 fell 6.79 to 1,350.45, and the Nasdaq composite index slipped 3.28 to 2,839.83.

Decliners beat advancers by a 5-to-4 margin on the New York Stock Exchange, with 1,648 down, 1,327 up and 544 unchanged. NYSE volume totaled 712.42 million shares vs. 660.83 million yesterday. The NYSE composite fell 2.18 to 623.71; the American Stock Exchange composite rose 7.28 to 793.67; and the Russell 2000 index rose 2.27 to 438.24.

The 30-year Treasury fell 23/32 point, or $7.19 per $1,000 face value; its yield climbed 5 basis points to 6.07 percent. Two-year yields rose 5 basis points to 5.67 percent.

U.S. financial markets were closed yesterday for Labor Day.

While merger activity stimulated trading in selected stocks, the overall market was quiet. Analysts said investors might be reluctant to drive the market much higher following Friday's massive gains.

The Dow soared 235.24 points Friday, and the Nasdaq gained 108.87, its largest single-day point gain ever, as a weaker-than-expected employment report raised hopes that the economy is not growing too rapidly.

But after the initial euphoria, many strategists dissected the report over the Labor Day weekend, and returned to trading convinced that inflation may be escalating, said Hugh Johnson, chief investment officer at First Albany Corp.