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Dow holds on to gains
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December 22, 1998: 3:13 p.m. ET
Stocks settle firmly in positive ground as Fed keeps interest rates steady
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NEW YORK (CNNfn) - After spending much of the day flip-flopping between positive and negative territory, the Dow Jones industrial average settled on the plus side Tuesday afternoon as Federal Reserve policy makers held key interest rates steady.
The Federal Open Market Committee opted to leave short-term rates unchanged, a sign the Fed believes the previous rate cuts this year provide enough fuel to keep the U.S. economy on track.
Shortly before 3:00 p.m. ET, the Dow was up 46.34 points at 9,035.19. Despite those gains, declines outpaced advances 1,801 to 1,176 on trading volume of 560 million shares on the New York Stock Exchange.
The Nasdaq Composite fell 19.19 to 2,118.84. as investors treated themselves to pre-holiday profit taking from large-cap technology stocks that posted 52-week highs Monday. The S&P 500 index slipped 0.35 to 1,203.19.
(Click here for a look at today's CNNfn market movers.)
The Fed's decision had no effect on U.S. bonds, which remained sharply lower in thin trading after a sell-off in the Japanese bond market. The benchmark 30-year Treasury fell 1-1/32 points in price for a yield of 5.12 percent.
The dollar was up slightly against the German mark and sharply higher against the yen as Japanese authorities said they will reduce their bond-buying activities.
Insurance deal prospects
In individual issues, health insurance giant Cigna Corp. (CI) added 2-5/8 to 79-15/16 after company officials confirmed it is in talks involving a possible sale of its property and casualty businesses to Bermuda-based Ace Ltd. The companies expect the deal to exceed $3 billion.
Brokerage firm AmeriTrade Holding Corp. (AMTD) shot up 11-1/2 to 32-1/2 after raising its first-quarter earnings outlook to the 9- to 11-cents-a-share range from its previous estimates of 6 cents to 7 cents.
Leading the declines was Dow component Goodyear Tire & Rubber Co. (GT), which slipped 11/16 to 51-5/8 after Morgan Stanley cut its rating for the tire company to "neutral" from "strong buy."
Specialty chemicals maker W.R. Grace & Co. (GRA) lost 1-1/2 to 14-11/16 after the Securities and Exchange Commission sued the company for financial fraud in its health care unit, alleging Grace falsely reported its 1991-1995 financial results.
Case Corp. (CSE) dipped 13/16 to 19-5/8 after the farm-equipment maker said it increased the number of job cuts by the end of 1999 to 3,400 as part of a broad restructuring plan in the face of slow sales and diminished profit.
In the technology sector, computer maker Micron Electronics Inc. (MUEI) dropped 3-3/16 to 18-3/16 after reporting first-quarter earnings a penny ahead of Wall Street forecasts. The company's sales, however, fell from last-year's results. Micron also said it will take a $3.2-million second-quarter charge to close its direct-sales operations in Nikkei, Japan.
Finally, Apple Computer Inc. (AAPL) rose 2-1/16 to 37-1/8, boosted by a report from market research firm PC Data citing Apple's iMac as the best-selling computer in November. 
-- by staff writer John Frederick Moore
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