Stocks closed lower yesterday as lingering fears about rising interest rates prompted investors to collect profits from Friday's big rally.

At the close of trading on Wall Street, the Dow Jones was down 44.32 at 11,034.13, a decline of 0.4 per cent. The blue chips stayed in a narrow range throughout the session, bobbing briefly into positive territory before giving up ground.

Declining issues outnumbered advancers by a five-to-four margin on the New York Stock Exchange, with 1,667 down, 1,347 up and 537 unchanged.

NYSE volume totalled 707.30 million shares at the close, against 654.54 million in the previous session.

The Russell 2000 index of smaller companies rose 2.27 to 438.24.

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.