TECHNOLOGY shares drove Wall Street to new highs for the second session in a row despite a weak bond market, where long-term interest rates jumped to worrisome levels.

The technology-heavy Nasdaq market broke above the 1,400 mark for the first time, led by such as Intel, Microsoft and Dell Computer. IBM, meanwhile, was the Dow's biggest gainer.

Stocks started the day mostly lower as bond prices fell, boosting the yield on the 30-year Treasury bond a key influence on long-term borrowing costs above the unsettling 7 per cent level.

The Dow also drew a boost from AT&T, which rose after the Wall Street Journal reported it was discussing a merger with SBC Communications (see story above).

The Nasdaq composite index rose 19.49 to 1,409.21, and the American Stock Exchange composite index rose 0.50 to 598.44.