Blue chip stocks closed lower yesterday as interest rate worries again dogged Wall Street, but the technology sector recovered from its recent battering as bargain hunters stepped into the fray.

The Dow finished down 8.37 points, or 0.17 per cent, at 10,577.89 while the Nasdaq rose 0.84 per cent. Financial markets opened weak but then recovered late in the day following a speech by Federal Reserve chairman Alan Greenspan. In a speech to business leaders in Boston, Mr Greenspan repeated his concern over waning US support for free world trade but steered clear of commenting on the outlook for US interest rates.

Analysts had been focused on the speech because recent reports suggest the economy may be in danger of overheating and have raised speculation the Fed will raise borrowing costs soon.