BLUE CHIP shares recovered more ground yesterday, extending a week long rally that has erased nearly half of the past month's 700 point loss by the Dow Jones industrial average.

Technology shares continued to struggle even after a robust profit report from Microsoft.

On Wall Street, the Dow rose 44.95 points to close at 6,703.55, bringing the week's advance to about 310 points, or nearly 5 per cent.

But the Nasdaq composite index failed to rally despite a 10 per cent surge by Microsoft. The software giant smashed analysts' expectations by reporting an 85 per cent improvement in profits for the first three months.