Blue-chip stocks fell for a third straight session yesterday as persistent concerns about interest rates sent bond prices tumbling, but technology and small-cap stocks out-performed the Dow Jones Industrial Average.

At the close of trading on Wall Street, the Dow was down 54.77 points, or by 0.5 per cent, at 10,666.86 after falling nearly 105 points earlier in the session.

Broader stock indicators were mixed. The Standard and Poor's 500 fell 2.82 to 1,333.06 and the technology-dominated Nasdaq composite index rose 17.87 to 2,598.13.

Declining issues outnumbered advancers by a 7-to-5 margin on the New York Stock Exchange, with 1,760 down, 1,257 up and 555 unchanged. The Russell 2000 index of smaller companies fell 1.24 to 446.09.

The stock and bond markets remained on edge as they awaited the Federal Reserve's meeting next week on interest rates. The Fed is widely expected to push rates higher in a bid to slow economic growth.