Restarting the big rally
Major gauges step higher as investors set aside worries about bond yields, Fed meeting - for now.
NEW YORK (CNNMoney.com) -- Stocks gained Monday afternoon, resuming the recent advance, as investors shrugged off any morning malaise regarding higher bond yields and concerns about the upcoming Federal Reserve policy meeting.
The Nasdaq composite (up 9.35 to 2,244.94, Charts) added around 0.4 percent roughly 2-1/2 hours into the session.
The broader Standard & Poor's 500 (up 3.82 to 1,323.69, Charts) index added about 0.3 percent.
The Dow Jones industrial average (up 18.09 to 11,578.86, Charts) added a few points, after ending Friday's session about 160 points from its record close of 11,722.98, hit Jan. 14, 2000.
The major gauges climbed for five out of six sessions in a row through Friday - on relief about falling oil prices and other signs of mild inflation.
After taking a breather Monday morning, investors tried to resume the advance, heading into midday, and the market seems to be in something of a "sweet spot," said James Awad, president at Awad Asset Management.
"At the moment, investors believe the Fed is right," Awad said. "They believe we are headed for a slowdown, not a recession, the housing market is headed for a soft landing, corporate profits will be strong, consumer spending will hold up and inflation will moderate."
That optimism is what's fueling stock gains right now, he added, and is likely to fuel an uptrend for the time being, until economic news or the Fed itself should change the outlook.
Still, Monday's gains were tempered by anticipation about Wednesday's Fed meeting.
The central bank is widely expected to hold rates steady at 5.25 percent, as it did August, after two years of rate hikes. But investors are primed for what the bankers might say in the statement about the economy and inflation.
Ahead of that, investors took in a government report showing that the nation's current account deficit widened more than expected.
Treasury prices slumped on the report, sending the benchmark 10-year note yield to 4.83 percent from 4.79 percent late Friday. Treasury prices and yields move in opposite directions.
In corporate news, Intel (up $0.19 to $19.70, Charts) and researchers at the University of California Santa Barbara said they've made a breakthrough in creating lasers on computer chips. The development could cut costs and improve the speed of communication networks and computers.
Intel shares rose less than 1 percent.
Applied Materials (up $0.54 to $17.74, Charts) gained 2.7 percent in active Nasdaq trading after the maker of chipmaking equipment said it recently bought back $2.5 billion in stock under an accelerated buyback plan. The company also said its board OK'd a new buyback plan for up to $5 billion in stock over the next three years.
Freescale Semiconductor (up $2.14 to $39.30, Charts) said after the market closed Friday that it agreed to be bought for $17.6 billion in cash by a private equity group led by Blackstone Group. Shares gained almost 6 percent Monday in active New York Stock Exchange trade.
Also in deals news, Symbol Technologies (up $1.65 to $14.36, Charts) is looking to sell itself and Motorola is a likely buyer, according to a weekend report in the Wall Street Journal. Shares of Symbol, a maker of of bar code and inventory scanning technology, jumped 13 percent Monday. Motorola (up $0.49 to $25.34, Charts) shares inched higher.
First Data (down $3.17 to $41.48, Charts) said late Friday that a restatement of its results boosted net income by about 6 percent over the last 3-1/2 years. Shares of the electronic payment services provider slipped 6 percent in active New York Stock Exchange trade Monday.
Automakers GM and Ford Motor briefly discussed an alliance before dropping the idea, trade journal Automotive News reported Monday. Both companies are trying to turnaround their businesses amid massive losses in North America.
Rising oil prices gave a lift to oil stocks, boosting the Amex Oil (up 18.40 to 1,065.86, Charts) index by 1.5 percent.
Market breadth turned positive. On the New York Stock Exchange, winners beat losers by eight to seven on volume of 630 million shares. On the Nasdaq, advancers edged decliners five to four as 930 million shares changed hands.
U.S. light crude oil for October delivery rose 57 cents to $63.90 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery rose $4.50 to $587.50 an ounce.
In currency trading, the dollar rose against the yen and fell versus the euro.