Blue Chips Droop, Tech Issues Sizzle : Wall Street: Dow sheds 21.83; stocks and bonds unfazed by release of Fed’s ‘beige book’ report.

A strong showing by Microsoft, plus a hot new computer-stock offering, Netscape Communications, pushed technology stocks higher Wednesday.

But blue-chip issues languished. The Dow Jones industrial average fell 21.83 points to 4,671.49. Declining issues edged out advancers on the New York Stock Exchange.

The Nasdaq composite index, which is laden with computer issues, rose 7.98 at 1,005.10 points, within a hair of its all-time closing high of 1,005.89 reached on July 17.

Other market indexes did not fare as well, however. The NYSE’s composite index fell 0.53 point to 300.06. The Standard & Poor’s 500-stock index declined 0.58 to 559.71 points, while the American Stock Exchange’s the market value index lost 1.11 to 523.72 points.

The Nasdaq index got a huge lift from a recent stalwart, Microsoft, which gained 3 to 96 1/2.

The Justice Department said Tuesday that it would not pursue an antitrust action against the software company before the Aug. 24 debut of its hotly anticipated Windows 95 operating system.

Microsoft’s gains, plus upbeat expectations for semiconductor industry book-to-bill data, pushed chip-maker and other computer stocks higher.

Technology stocks also got a big lift from Netscape Communications Corp. The Mountain View, Calif., company, which makes software for browsing on-line computer services, priced 5 million shares at $28 apiece after the market closed on Tuesday.

Riding the market’s torrid affair with computer issues, Netscape shares shot up to 75 in Nasdaq trading after a delayed opening due to an order imbalance. They eased back to 58 1/4 by the end of the session, but that was still more than double the initial offering price. In an indication of the frenzied trading, about 13.8 million shares changed hands, more than twice the amount of outstanding stock.

The gains in Microsoft and Netscape pushed computer shares higher. Prominent gainers in Nasdaq trading included Intel, which rose 1 3/8 to 66 1/8; Qualcomm, up 2 1/8 to 45 7/8; Cisco Systems, up 1 7/16 to 57 1/16; and Quarterdeck, which added 3/4 to 16 5/8.

On the Big Board, IBM gained 1/4 to 109 7/8; Compaq climbed 1 7/8 to 52; and Micron Technology advanced 4 1/8 to 63 1/8.

Stocks and bonds did not react much to the Federal Reserve Board’s release at noon of its “beige book” quarterly report on the economy, which said the expansion was limited to three regions of the United States, and that wages were not under pressure despite a tight labor market.

Reaction to the Treasury’s auction at 1 p.m. on 10-year securities was similarly muted.

The 30-year Treasury bond yield stood at 6.91%, up from 6.88% on Tuesday.

The final segment of the refunding, an auction of 30-year bonds on Thursday, also will be scrutinized as a test of Japanese investor interest.

Arnold Owen, managing director of trading at SoundView Financial Corp., is steadfastly bullish about computer shares, saying the recent gains in Microsoft, and other well-known issues, are warranted.

“We are in a secular bull market in technology, and it’s not anywhere near the mature stages,” Owen said. “Microsoft is a market leader, a technology sector leader. I think the market has a difficult time rallying without Microsoft, and when I see the general market down and Microsoft up, I think the rest of the market cannot be far behind.”

Steven Goldman, market strategist at Weeden & Co. in Greenwich, Conn., said the August introduction of Windows 95 has put a floor under computer prices this season, leaving “no sign of exhaustion” in that area of the market.

Among broad stock indexes, the Standard & Poor’s 500 index lost 0.72 to reach 559.67 points.

Retail, tobacco and food issues dropped, while computer, semiconductor and drug stocks gained.

The Russell 2000 index of small companies strengthened 0.77 point to 299.58 and the American Stock Exchange Value index slipped 1.11 to 523.72 points.

The Wilshire 5000 index, meanwhile, eked out a 0.13 gain to reach 5543.45 points.

Some 1,199 shares declined and 992 shares rose on the New York Stock Exchange. And about 302 million shares changed hands, compared to 341.6 million daily average volume over the past six months.

Orange juice futures fell sharply Wednesday as worries about supplies eased, while profit taking drove coffee, oil and wheat prices lower.

September frozen concentrated orange juice futures fell 3.50 cents a pound to 97 cents on the New York Cotton Exchange as speculators who had been buyers sold heavily.

“The longs [buyers] are exiting left and right,” Smith Barney analyst Walter Spilka said. “This is the seventh session in a row of lower prices in the September contract.”

Spilka said while the market may be looking ahead to a larger crop in the United States and a good crop in Brazil, current stocks were still tight and might lend some support.

Overseas stock markets eased a bit, with the Nikkei index in Tokyo giving up 0.29%, the DAX index in Frankfurt losing 0.71%, and the FTSE index in London dipping 0.01%.

Market Roundup, D6