US Dow climbs, Apple offsets Microsoft on Nasdaq

NEW YORK, Mar 22 (Reuters) US blue-chip stocks rallied today as a Chinese engine maker said it was in talks to boost cooperation with Caterpillar Inc., boosting hopes that US companies would be able to benefit from international expansion.

Shares of Apple Computer Inc. climbed 2.3 per cent to 63.24 dollars and lifted the Nasdaq into positive territory. That reversed the Nasdaq's earlier tech-driven decline after Microsoft Corp.

delayed the release of its new operating system. Apple, the maker of the Macintosh personal computer, stands to benefit from Microsoft's delay.

The Dow Jones industrial average was up 58.11 points, or 0.52 per cent, at 11,293.58. The Standard&Poor's 500 Index was up 5.36 points, or 0.41 per cent, at 1,302.59. The Nasdaq Composite Index was up 1.74 points, or 0.08 per cent, at 2,295.97.

Stocks also got a boost from the bond market as the yield on the benchmark 10-year US Treasury note dipped to 4.71 per cent from 4.72 percent late yesterday, possibly signalling lower interest rates ahead.

''Recently, when yields move down, the market has moved up,'' said Michael Malone, trading analyst at S.G. Cowen. ''Investors are looking to the fact generally that economic growth worldwide is robust right now, so you're seeing a lot of these multinationals that participate in that doing quite well.'' Caterpillar shares jumped 1.7 percent to .58 on the New York Stock Exchange and contributed the most to the Dow's advance. The stock gained on news that the big US heavy equipment maker is in preliminary talks about a closer relationship with Chinese engine maker Shanghai Diesel Engine Co. Ltd.

The Dow industrials also got some help from food and tobacco company Altria Group, which gained 1.2 per cent to 73.36 dollars on the NYSE after UBS analysts raised their price target on the stock.

General Motors Corp. shares rose 1 per cent to 22.22 dollars on the NYSE and also helped the Dow after the world's biggest auto maker reached an agreement with its union on a plan for early retirement for workers.

But shares of Microsoft, the world's largest software maker, fell 2.4 per cent to 27.06 dollars on Nasdaq a day after it delayed the consumer launch of its Windows Vista operating system.

Microsoft's decision gave investors a reason to sell some shares of top PC maker Dell Inc., down 0.2 per cent at 30.20 dollars on Nasdaq; No. 2 personal computer maker Hewlett-Packard Co., down 0.8 per cent at 33.27 dollars on the NYSE, and graphic chip maker Nvidia Corp., down 4 per cent at 48.77 dollars on Nasdaq.

Reuters PG BD2327