Profit-Taking Hits Blue Chips; Nasdaq Gains

Snail’s-pace trading left blue-chip stocks mixed Wednesday, but action picked up on Nasdaq amid continued buying of Internet names.

In commodity markets, natural gas prices hit a record high on fresh supply worries, as oil prices also rose.

In currency trading, the euro neared a record low against the dollar, awaiting a European Central Bank meeting on interest rates.

On Wall Street, the Dow industrials suffered a bout of profit-taking that pulled the index down 112.09 points, or 1%, to 11,103.01.

But winners and losers were nearly even on the New York Stock Exchange, in slow pre-Labor Day trading.

Aggressive buyers were more interested in Nasdaq names: Volume topped 1.5 billion shares as winners held a 21-19 edge over losers.

The Nasdaq composite gained 21.64 points, or 0.5%, to 4,103.81, its highest close since July 20.

Beaten-down Net stocks continued their recent rebound, lifting the Interactive Week index of 50 major Net names 1.7% to its highest close since April.

The Nasdaq’s recent gains “look like an Internet bounce,� said Matt Johnson, head of Nasdaq trading at Lehman Bros.

In commodity markets, natural gas futures for October rose 15.8 cents to $4.801 per million British thermal units in New York, a record, after the American Gas Assn. said inventories rose 2.5% last week. The increase was less than expected, and points to continuing tight gas supplies.

Crude oil topped $33 a barrel in New York despite a pledge from Saudi Arabia to work toward an output boost.

In currency trading, the euro eased to 89.2 U.S. cents, down from 89.3 cents on Tuesday. Traders are waiting to see if the European Central Bank will raise interest rates today to support the currency.

In the bond market, yields were little changed.

Among Wednesday’s highlights:

* Internet-related names in demand included Amazon.com, up $3.31 to $42.94 after a Goldman Sachs analyst upgraded the stock; Inktomi, up $6.81 to $126; Ariba, up $8 to $152.50; and Go2Net, up $7.50 to $65.50.

But major tech stocks were mixed. IBM fell $2.56 to $130.31; Micron Technology lost $3.56 to $83.69.

* Biotech stocks attracted buyers. The Amex biotech index surged 1.7%. Human Genome Sciences gained $5.19 to $156.31.

* Brokerage stocks were mixed after Credit Suisse, as expected, announced a merger with Donaldson Lufkin & Jenrette. DLJ gained $4.25 to $88.25, and Bear Stearns--another rumored target--rose $2.13 to $65.25. But Merrill Lynch eased 56 cents to $142.13.

Other financial stocks were generally higher, however. J.P. Morgan rose $2.88 to $151.88, leading bank stocks higher.

* Insurance stocks surged on expectations that France’s AXA, which is selling its stake in DLJ, will now push deeper into its primary insurance business. Indeed, AXA said it wants to buy out minority holders of its AXA Financial unit, offering about $53.50 in cash and stock.

AXA Financial shares inched up 6 cents to $52.31 on the NYSE. Parent AXA’s shares fell $6.06 to $72.94 on the NYSE.

Other insurance shares rose on takeover hopes. Lincoln Financial jumped $4.81 to $52.13 and Chubb gained $1.63 to $75.31.

* The Dow was clipped in part by General Electric, down $2.38 to $57.81 on concerns that pricing pressures in the appliance business will hurt earnings.

* Retail stocks also were weak on continuing concerns about consumer spending this fall. Home Depot slid $1.31 to $48.38 and Wal-Mart fell $1 to $48.44.

In foreign trading, the main Mexican share index jumped 241.63 points, or 3.8%, to 6,572.91 as slowing inflation and healthy economic growth prospects fueled new buying interest.

Market Roundup: C12-13