THE Dow Jones industrial average fell from record levels last night after a burst of late selling.

It dropped 11.31 points to close at 7,760.78.

The Nasdaq index, however, rallied to a record high for the third straight session, lifted by strength in technology stocks.

Stocks seesawed for much of the day amid a mix of divergent economic news.

Initially, stocks fell on a Federal Reserve report showing a stronger-than-expected rise in industrial production in US factories, mines and utilities.

Investors feared the report was a sign of robust economic growth that could aggravate inflation and cause the Fed to raise interest rates early next month.

The central bank last raised rates in March as a pre-emptive strike against inflation.

But by midday, stocks began to turn higher, helped by a recovery in the bond market and a surge in technology stocks.