US blue chips finished with slender gains yesterday after a roaring rally sparked by market-friendly economic data was undercut by concern over tensions in the Middle East.

The day's gains were enough, however, to push the Nasdaq Composite, the Standard & Poor's 500 and Russell 2000 indexes further into record ground.

The Dow shot up 117 points in early trading as stocks and bonds reacted to a weaker-than-expected increase in September's payrolls, taken as a sign US inflation remained subdued.

But both bonds and stocks retreated in afternoon dealings as investors used increased tensions between Iran and Iraq as an excuse to take profits on soaring stocks and bonds.