Leading Wall Street stock measures were mostly lower as investors continued to shift money from a pricey blue-chip sector into smaller-company shares. The Dow Jones industrial average fell 77.35 points to close at 7,782.22. The index of 30 big companies had managed to erase an early 60-point deficit, bobbing into positive territory before turning lower again.

The blue-chip sector struggled despite an afternoon turnaround in the bond market, where interest rates initially rose toward their highest level since early July before edging lower again.

Bonds slipped in the morning after the latest in a series of economic reports suggesting a vigorous economic pace that could aggravate inflationary pressures.

Reports from two private research groups showed gains in retail sales and consumer confidence. The government, meanwhile, reported that manufacturing activity continued at a healthy pace, and a realty group reported that sales of existing homes rose 2.2 per cent in July.