FINANCIAL MARKETS : Dow Flirts With Record Before Dip

Blue-chip stocks closed slightly lower Tuesday after an earlier rally sparked by upbeat economic news came within a fraction of lifting the market into record territory.

But technology, bank, auto and retail stocks drove down major market indexes in the last hour of trading, jolted by one 15-minute round of computer-guided orders to sell stocks.

The Dow Jones industrial average ended 1.09 points lower at 4,755.48. A late morning rally stalled at 4,801.00--just short of the record closing high of 4,802.45 reached Oct. 19.

“The market did give us a treat on Halloween and stuck its nose above 4,800,” said Alfred Goldman of A.G. Edwards & Co. After concerns over corporate earnings, consumer credit and protracted U.S. budget talks, the Dow Jones index closed out October, which is known as a very volatile month for stocks, with a loss of only 34 points. It started October at 4,789.

Analysts said news that Quebec voters decided not to separate from Canada boosted the U.S. dollar, aided bonds and subsequently gave stocks an early lift.

Some said that if the bid to separate had succeeded, Canada might have slid into a recession that could have hurt the U.S. economy. Canada is America’s largest trading partner.

The bond market seemed optimistic that Washington will have a budget deal and by day’s end, the yield of the Treasury’s main 30-year bond fell to 6.33% from 6.35% late Monday. Shorter-term maturities were fairly stable. But after the close of trading, Treasury Secretary Rubin said that a failure to act on the U.S. debt limit by today may delay or cancel the Treasury’s auctions.

Analysts said his comments could cast another pall over Wall Street. President Clinton was expected to meet congressional leaders today to discuss the increasingly critical question of raising the nation’s debt limit.

“With the Canadian background and then the Mexican situation (with the peso’s tumult) it doesn’t help,” said Robert Stovall, president of Stovall/21st Advisers.

“These are big picture things that don’t have anything to do with earnings or dividends,” Stovall said.

The market absorbed a slew of economic news including the stronger-than-expected Chicago purchasing manager’s index, which rose to 53.4 in October.

September single-family new home sales rose an unexpectedly strong 3.3% to 727,000 units.

Meanwhile, consumer confidence eased slightly in October from September but was still significantly higher than a year ago, a key survey said.

Among market highlights:

* Total Renal Care, a provider of kidney dialysis services, rose 4 7/8 to 20 3/8 in its first day of trading.

* American Oncology tumbled 28% or 13 3/8 to 35 after its results fell below Wall Street expectations.

* Stocks of Canadian companies surged in the wake of Monday’s vote. Abitibi Price rose 7/8 to 17 1/2 and Imperial Oil was up 3/8 to 36 1/2.

* Financial stocks took another beating. Bankers Trust New York Corp. was down 1 5/8 at 63 3/4, Chase Manhattan Corp. fell 1 1/8 to 57 and First Chicago Corp. was down 1 1/4 to 67 7/8.

Stocks rose in almost every major overseas stock market.

The Nikkei 225 index in Japan, the world’s second-largest stock market after the U.S., rose 0.83%. Britain’s FTSE 100 index, third-largest stock market, gained 0.42%. Germany’s DAX index, the fourth-largest, rose 1.02%. France’s CAC 40 jumped 0.88%.