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Rate relief lifts stocks
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August 23, 1999: 11:43 a.m. ET
Investors accept idea of likely interest rate increase and go shopping for shares
By staff writer Malina Poshtova Zang
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NEW YORK (CNNfn) - A strong rally continued to lift U.S. stock markets at midday Monday, as investors, resigned to the idea that the Federal Reserve likely will raise interest rates Tuesday, used the opportunity to build on Friday's gains and buy stocks cheapened after weeks of selling.
Shortly before 11:30 a.m. ET, the Dow Jones industrial average was 108.60 points higher at 11,209.21. Market breadth on the New York Stock Exchange was positive, with gainers leading losers 1,560 to 1,046 on trading volume of 233 million shares.
The Nasdaq composite index gained 41.80 points, or 1.6 percent, to 2,690.13, and the S&P 500 index rose 13.25 to 1,349.86.
The bond market lingered around unchanged levels in quiet trading, held in check by the Fed's pending policy meeting. Although most investors appeared to have accepted the idea that a short-term interest rate increase of a quarter of a percentage point is imminent, many opted to remain cautious until they know more about the Fed's longer-term intentions.
The benchmark 30-year Treasury note was 4/32 of a point lower in price for a yield of 5.99 percent, barely up from Friday's 5.98 percent.
The dollar rose against the euro and also posted modest gains against the yen.
No fear of rate hike
In the stock market, financial and technology issues -- both heavily influenced by movements in monetary policy -- appeared to have adjusted to the strong possibility of a rate hike, with both sectors heading higher and helping support the broader market.
Shares of the Dow's three financial components, American Express (AXP), Citigroup (C) and J.P. Morgan (JPM) all advanced.
Among the technology members of the blue chip index, IBM (IBM) gained 2-1/8 to 123-7/8, but Hewlett Packard (HWP) lost 1-3/8 to 103-1/2.
Elsewhere in the technology universe, Microsoft (MSFT) climbed 1-7/8 to 85-1/4, Intel (INTC) rose 1-7/8 to 81-13/16, and Cisco Systems (CSCO) moved 9/16 higher to 64-11/16.
Internet companies, which depend heavily on borrowing for expansion, also saw their shares move higher. Amazon.com (AMZN) rose 6-5/16 to 119-3/4, America Online (AOL) advanced 2-3/4 to 97-15/16, and Yahoo! (YHOO) was up 6-1/2 to 151-1/2.
Mergers liven up the session
Monday also brought a heavy dose of merger news on Wall Street, with pending unions taking new turns and new deals being announced.
In the base metals sector, where consolidation has been rampant in recent weeks, Phelps Dodge (PD) announced Sunday that it would lobby shareholders of both Asarco (AR) and Cyprus Amax (CYM) to oppose their pending union. Phelps Dodge, whose unsolicited bid for its two copper-producing rivals was rejected Friday, is likely to go hostile in its bid for Asarco and Cyprus Amax.
Shares of Asarco eased 1/16 to 22-3/8, Cyprus Amax inched up 3/16 to 17-9/16 and Phelps Dodge rose 1-1/16 to 60-3/16.
Meanwhile in the utilities sector, news that Carolina Power & Light (CPC) is buying Florida Progress (FPC) for $5.3 billion in cash and stock lifted shares of Florida Progress 2-3/16 to 46-13/16. Carolina Power & Light saw its stock fall 2-11/16 to 36-5/16. 
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