Blue-Chip Stocks Close at 4,801.80, Setting Record : Markets: Growth of retail sales is lower than expected, bringing hope that Fed will again lower interest rates.

Blue-chip stocks closed at a record high for the third consecutive day and bonds rallied Thursday as the latest batch of economic data reinforced hopes that the Federal Reserve would lower interest rates again.

The Dow Jones industrial average climbed 36.28 points to 4,801.80, beating Wednesday’s record of 4,765.52 and closing above 4,800 for the first time.

Advancing issues had an 11-to-8 lead on decliners on the New York Stock Exchange. Big Board volume was heavy, with a revised 382.87 million shares changing hands as of 4 p.m., up from 381.42 million on Wednesday.

Blue chip issues outdistanced the broader market, which was held back by another poor performance in computer-related shares.

The Nasdaq composite index dropped 0.44 points to 1,066.96, shy of its record high closing of 1,067.40 set on Wednesday. The American Stock Exchange’s market value index fell 0.36 points to 552.77, below its record high of 553.58 set on Tuesday.

But Standard & Poor’s 500 composite index closed at a record high for the eighth consecutive session, up 4.84 points to 583.61. And the NYSE composite index climbed 2.37 points to 312.75, logging its fifth consecutive record high.

“The real catalyst for today’s continuation of the rally was the bond market rally,” said Todd Clark, managing director at Rodman & Renshaw Capital Group Inc. “The (30-year Treasury) bond is below 6.5% for the first time since early July. That’s caused some interesting things to occur in equity land.”

The yield of the benchmark 30-year Treasury bond fell to 6.46% from 6.52% on Wednesday.

Bonds shot higher after the Commerce Department said retail sales rose 0.6% in August, less than the 0.7% growth expected by analysts. July sales fell 0.4%, revised downward from an earlier estimate of down 0.1%.

In another report, the Labor Department said first-time claims for jobless benefits shot up by 21,000 last week to the highest level in nearly two months, exceeding analysts’ expectations.

Bond investors concluded the data was weak enough to allow the Federal Reserve to lower interest rates again when its policy committee convenes Sept. 26. Lower rates tend to increase the value of outstanding bonds.

In Thursday’s auction of 52-week Treasury bills, meanwhile, interest rates fell to the lowest level in more than a year.

The average discount rate was 5.21%, down from 5.55% at the last auction Aug. 10.

It was the lowest rate since 52-week bills averaged 5.20% on July 21, 1994.

The bills will carry an equivalent coupon interest rate of 5.52% with each $10,000 in face value selling for $9,473.20.

Sales totaled $18.36 billion out of bids of $57.72 billion.

In late New York trading, the dollar ended at 102.50 yen, down from 102.75 yen Wednesday. Among Thursday’s highlights:

* Shares of J.P. Morgan, a Dow industrial index component, surged 2 1/8 to 78 1/4. Shares of Quick & Reilly, the discount brokerage, advanced 2 3/8 to 41 5/8. CNA Financial, an insurance holding company, added 3 7/8 to 102 1/4.

* The Dow Jones utility average, viewed by many as a leading indicator, rose 2.50 points, or 1.22%, to 206.89. Its components were led higher by Con Edison, which rose 3/4 to 29.

* Top gainers among consumer stocks included Procter & Gamble, up 1 3/8 to 74 5/8; McDonald’s, up 1 1/4 to 39 5/8; and PepsiCo, up 1/2 to 49 1/4.

* IBM lost ground for a second day, dropping 1 1/4 to 93 3/8 in leading volume on the Big Board.

In commodities trading, oil prices soared to three-month highs.

October crude oil rose 31 cents to $18.85 a barrel, the highest level for a spot contract since mid-June at the New York Mercantile Exchange.

* SLOW ECONOMY: Retail sales rose a sluggish 0.6% in August. D2