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Wall St. rises, rates don't
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June 28, 2000: 4:55 p.m. ET
Tech buyers emerge as Fed curbs rate increase; Dow, Nasdaq lifted
By Staff Writer Catherine Tymkiw
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NEW YORK (CNNfn) - Technology stocks were bought in abundance Wednesday as investors took comfort from news that the Federal Reserve left interest rates unchanged for now.
Also boosting investor confidence was the Fed's surprising comments that it may be nearing the end of its credit tightening cycle.
"They were less forceful in their rhetoric and that shows a little light at the end of the tunnel," said Art Hogan, chief market analyst at Jefferies & Co. "Clearly they're at a point where what they say is more important than what they do and that's playing itself out in the equity markets."
 The Nasdaq jumped 81.38 points, more than 2 percent, to 3,940.34. The Dow gained 23.33 to 10,527.79, and the broader S&P 500 rose 4.27 to 1,454.82.
The Nasdaq was led higher by WorldCom, gaining ground even as its takeover of Sprint was falling apart. The Dow was lifted by Hewlett-Packard after Lehman Brothers said the computer maker is on its list of stocks that could outperform the market.
 Market breadth was positive, with advancers beating decliners on the New York Stock Exchange 1,738 to 1,170, as more than 1.0 billion shares changed hands. On the Nasdaq, winners topped losers 2,343 to 1,603, as more than 1.6 billion shares were traded.
In currency markets, the dollar rose against the yen and the euro. Treasury securities fell.
Techs celebrate stable interest rate
Rising interest rate have a negative impact on corporate profitability. But if interest rates remain unchanged, analysts said, technology stocks -- especially those that show a strong revenue outlook -- could look less expensive to own.
"Growth stocks on the large cap front with perceived consistent earnings can be looked at as better values," said Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum.
WorldCom (WCOM: Research, Estimates) surged 4-7/8 to 44-9/16 after a news report indicated that it may be looking to get out of the long-distance telephone business in the wake of a Justice Department lawsuit to block the company's $129 billion buyout of Sprint.
 Other tech leaders rallied. Cisco Systems (CSCO: Research, Estimates) gained 1-5/16 to 63-9/16, and Sun Microsystems (SUNW: Research, Estimates) jumped 2-3/4 to close at 90-3/16.
Intel (INTC: Research, Estimates) helped both the Dow and the Nasdaq, gaining 1 to close at 132-3/8.
Also lifting the Dow, Hewlett-Packard (HWP: Research, Estimates) jumped 7-1/16 to 123-11/16 after Lehman Brothers put the firm on its list of 10 uncommon value stocks, meaning it would outperform the market and be a good long-term investment.
 Nine out of the 10 listed stocks surged, with the exception of Micron Technology (MU: Research, Estimates), which slid 1-7/8 to 88-1/8. Among the biggest gainers on Lehman's list, BEA Systems (BEAS: Research, Estimates) gained 7-1/32 to 45-31/32, and Juniper Networks (JNPR: Research, Estimates) surged 10 to 136-7/16.
Rounding out the list were Cendant (CD: Research, Estimates), Eli Lilly (LLY: Research, Estimates), Agilent Technologies (A: Research, Estimates), Nortel Networks (NT: Research, Estimates), Gemstar International (GNST: Research, Estimates), and Tellabs (TLAB: Research, Estimates).
Fed leaves rates alone for now
The Federal Open Market Committee, the Fed's monetary policy-making body, wound up its two-day meeting with no surprises. Interest rates remain unchanged but inflationary concerns still persist.
After six rate hikes during the past year, investors had been biding their time for confirmation that the Fed would leave rates alone. After the news, investor confidence paved the way for the tech rally to continue and analysts said people now will start looking at the economic data going forward to gauge what might happen when the Fed meets again in August.
"It was exactly what Wall Street thought," said Ehrenkrantz's Hyman. "The wording was exact -- no hike, sees inflation risk ahead, recent data shows moderating slowdown is still tentative and preliminary, and leaves open (a) rate hike in August."
Scotty George, chairman of Corinthian Partners Asset Management, agreed, telling CNNfn's Before Hours that the Fed's will likely wait until August to raise rates. (475K WAV) (475K AIFF).
 One analyst said investors should continue seeking stocks that show sustained strong growth. "I think investors should take a step back and look at the big picture," Alan Skrainka, chief market strategist at Edward Jones, told CNNfn's market coverage. "I think the (Fed) is doing its job and investors should do theirs -- avoid those companies that do not have a track record of growth." 
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