US stocks ended mixed yesterday as a rally in telecommunications companies on takeover speculation pushed the Dow Jones industrial average higher while a weakening of other technology issues after the debut of Palm dragged the Nasdaq market down.

Some investors may have decided to take profits ahead of employment data due for release today.

European telecoms giants Deutsche Telecom and France Telecom look poised to make takeover bids after securing huge loans to fill their acquisition warchests, banking sources in Europe said. The latest speculation has linked Deutsche Telecom with US carrier Qwest Communications International. That, and reports of other corporate manoeuvres in the sector, were enough to drive most telecom shares higher.

The Nasdaq Composite Index finished down 29.56 points, or 0.62 per cent, to 4,754.52. It reached an intraday record high of 4,829.01 before retreating as Palm shares retreated from their high.