The Nasdaq composite index reached a new closing high in New York yesterday amid a rally in technology stocks that was spurred by a tame US inflation report and a strong earnings outlook from computer chip maker, Intel.

Blue chip stocks failed to keep pace, falling due to profit-taking and nervousness about economic and political uncertainty overseas.

NYSE volume totalled 745.53 million shares, against 733.78 million in the previous session. The NYSE composite index was up 1.26 at 654.90, and the American Stock Exchange composite index was up 0.67 at 813.00.

The Russell 2000 index of smaller companies was up 3.35 at 461.46.

Yesterday's results helped ease worries about a potential outbreak of inflation, which could cause the Fed to raise rates again this year to slow US economic growth and keep inflation contained.