Stock gains speed up

Wall Street sees early gains as investors bet central bank will cut interest rates. UBS takes big writedown on subprime woes.

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What should the Federal Reserve do about interest rates at Tuesday's meeting?
  • Cut rates by a half percentage point
  • Cut rates by a quarter percentage point
  • Hold rates steady
  • Raise rates
  • Not sure

NEW YORK (CNNMoney.com) -- Stock gains accelerated Monday morning, as investors scooped up a variety of issues ahead of Tuesday's expected interest-rate cut from the Federal Reserve.

The Dow Jones industrial average (Charts) added 0.8 percent 90 minutes into the session. The broader S&P 500 (Charts) index added 0.8 percent and the tech-fueled Nasdaq (Charts) composite added 0.8 percent.

The Fed's policy committee, meeting Tuesday, is widely expected to cut the fed funds rate, a key short-term lending rate, by a quarter-percentage point, to 4.25 percent, after cutting rates at the last two meetings. Some Wall Streeters are looking for a cut of a half-percentage point, but such bets were diminished by last week's mostly upbeat November jobs report.

Ahead of that, investors took in the morning's pending home sales index, which showed a rise of 0.6 percent, versus forecasts that sales would fall 1 percent.

In corporate news, UBS (Charts) issued a profit warning, said it will write down about $10 billion related to the credit market crisis and will borrow about $11.5 billion from outside investors.

McDonald's (Charts, Fortune 500), a Dow component, reported November sales at its stores open a year or more rose 8.2 percent, well above estimates.

McDonald's was one of many Dow components rising, with 25 of the 30 blue-chip components higher. Other gainers included Alcoa (Charts, Fortune 500), Boeing (Charts, Fortune 500), General Motors (Charts, Fortune 500), Citigroup (Charts, Fortune 500), Caterpillar (Charts, Fortune 500) and JP Morgan (Charts, Fortune 500).

Market breadth was positive. On the New York Stock Exchange, winners topped losers 7 to 3 on volume of 350 million shares. On the Nasdaq, advancers beat decliners eight to five on volume of 620 million shares.

Treasury prices slipped, boosting the yield on the 10-year note to 4.14 percent from 4.10 percent late Friday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and the yen.

U.S. light crude oil for January delivery rose $1.07 to $89.35 a barrel on the New York Mercantile Exchange.

COMEX gold for February delivery rallied $14.70 to $814.90 an ounce. To top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.