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Dow climbs to new high
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August 23, 1999: 4:59 p.m. ET
Blue chips, broader market surge on expectations rate hike will be limited
By staff writer Malina Poshtova Zang
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NEW YORK (CNNfn) - A strong rally lifted U.S. stock markets and led the Dow industrials to a record close Monday as investors braced for an expected interest rate increase by the Federal Reserve Tuesday and bet the rate hike would likely be the last for the year.
The Dow Jones industrial average surged 199.15 points, or 1.79 percent, to 11,299.76, moving above its previous closing record of 11,209.84 on July 16. Market breadth on the New York Stock Exchange was positive, with gainers leading losers 1,715 to 1,257 on trading volume of 680 million shares.
The Nasdaq composite index rallied 71.24 points, or 2.69 percent, to 2,719.57, and the S&P 500 index rose 23.61, or 1.77 percent, to 1,360.22.
The bond market lingered around unchanged levels in quiet trading, held in check by the Fed's pending policy meeting. Although most investors appeared to have accepted the idea that a short-term interest rate increase of a quarter of a percentage point is imminent, many opted to remain cautious until they know more about the Fed's longer-term intentions.
The benchmark 30-year Treasury note rose 2/32 of a point in price, leaving the yield unchanged from Friday's 5.98 percent.
The dollar rose against the euro and also posted modest gains against the yen.
No fear of rate hike
In the stock market, financial and technology issues -- both heavily influenced by movements in monetary policy -- appeared to have adjusted to the strong possibility of a rate hike, with both sectors heading higher and helping support the broader market.
Shares of the Dow's three financial components -- American Express (AXP), Citigroup (C) and J.P. Morgan (JPM) -- all advanced sharply. American Express gained 3-1/2 to 146-3/8, Citigroup rose 2-1/4 to 48-9/16 and J.P. Morgan added 6-13/16 to 139-3/4.
Among the technology members of the blue chip index, IBM (IBM) gained 2-11/16 to 124-7/16, and Hewlett Packard (HWP), after spending the day in the minus column, recovered to close1/8 higher at 105.
Elsewhere in the technology universe, Microsoft (MSFT) climbed 3-1/16 to 86-7/16, Intel (INTC) rose 3 to 82-15/16, and Cisco Systems (CSCO) moved 1-5/8 higher to 65-3/4.
Internet companies, which depend heavily on borrowing for expansion, also saw their shares move higher. Amazon.com (AMZN) rose 4-15/16 to 118-3/8, America Online (AOL) advanced 3-1/2 to 98-11/16, and Yahoo! (YHOO) finished up 7-1/8 to 152-1/8.
Mergers liven up the session
Monday also brought a heavy dose of merger news on Wall Street, with pending unions taking new turns and new deals being announced.
In the base metals sector, where consolidation has been rampant in recent weeks, Phelps Dodge (PD) announced Sunday that it would lobby shareholders of both Asarco (AR) and Cyprus Amax (CYM) to oppose their pending union. Phelps Dodge, whose unsolicited bid for its two copper-producing rivals was rejected Friday, is likely to go hostile in its bid for Asarco and Cyprus Amax.
Shares of Asarco edged up 1/16 to 22-1/2, Cyprus Amax inched up 1/4 to 17-5/8 and Phelps Dodge rose 15/16 to 60-1/16.
Meanwhile in the utilities sector, news that Carolina Power & Light (CPL) is buying Florida Progress (FPC) for $5.3 billion in cash and stock lifted shares of Florida Progress 2-3/16 to 46-13/16. Carolina Power stock fell 2-1/8 to 36-7/8.
(Click here for a look at today's CNNfn market movers.)
(Click here for a look at today's CNNfn technology stocks report.) 
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