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Dow ebullient ahead of Fed
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November 16, 1998: 5:40 p.m. ET
Index crosses 9,000 mark for first time since July 30, ahead of key Fed meeting
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NEW YORK (CNNfn) - Blue-chip stocks closed near a four-month high Monday, as investors wagered that the Federal Reserve would cut interest rates.
The Dow Jones industrial average ended up 91.66 points at 9011.25, its first close above 9,000 since July 30. On the New York Stock Exchange, 1,621 issues advanced and 1,406 issues declined, on trading volume of 616 million shares.
The Nasdaq Composite enjoyed a late spurt as well, gaining 13.69 points to 1861.68. The S&P 500 index rose 10.14 points to 1135.86.
The Federal Open Market Committee, the Fed's policy making arm, will meet Tuesday to discuss whether to cut short-term interest rates. Many analysts have pared back their hopes for a rate cut as stock and bond markets have stabilized over the past several weeks.
A last-minute dash of hope, however, led banking stocks higher on Wall Street. Crude oil prices fell as a weekend crisis between the United States and Iraq defused, a development that lifted airline stocks but hurt oil-related issues.
Gary Kaminsky, managing director at SG Cowen, said that Wall Street is now resilient enough to withstand no move from the Fed, as many investors still have cash to invest in the market. (291K WAV) or (291K AIFF).
Bonds were lower, as investors poured back into stocks and away from the safe haven that Treasury issues offer in times of economic and political turmoil. The benchmark 30-year Treasury bond fell 24/32 of a point in price for a yield of 5.29 percent.
The dollar fell against the Japanese yen and the German mark, as the suspicion about a rate cut drained off the attraction of dollar-based investments.
Banks get a boost
Banks and brokerages looked favorably on the suggestions that interest rates might come down Tuesday.
Among the gainers were three Dow components: Citigroup (CCI), finishing up 3/4 to 44-1/8, J.P. Morgan (JPM) rising 1-5/8 to 103-1/2 and American Express (AXP) up 2-3/8 to 96-15/16.
And top-performing brokerages were Morgan Stanley Dean Witter (MWD), up 2-13/16 to 64-1/16, Legg Mason (LM) gaining 1-15/16 to 26-3/16 and PaineWebber Group (PWJ) climbing 1-1/8 to 36-9/16.
In the high-tech sector, the Internet search engine provider Lycos (LCOS) shot up 8-5/8 to 59-5/8 after Merrill Lynch raised its rating on the stock.
(Click here for a look at the CNNfn market movers.)
(Click here for a look at the CNNfn tech stock report.)
-- by staff writer Jamey Keaten
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