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U.S. stocks tread water
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November 15, 1999: 5:31 p.m. ET
Investors await outcome of Fed policy meeting for direction
By Staff Writer Jill Bebar
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NEW YORK (CNNfn) - U.S. stocks ended flat Monday after slumbering throughout the session. Uncertainty about whether the Federal Reserve will hike interest rates at its monetary-policy meeting Tuesday kept many investors sidelined.
The Dow Jones industrial average fell 8.57 points to 10,760.75. On the New York Stock Exchange, advances outnumbered declines 1,629 to 1,401 as trading volume reached 794 million shares.
The Nasdaq composite slipped 1.61 points to 3,219.54, and the S&P 500 index dipped 1.65 points to 1,394.39.
The bond market also ended virtually flat as participants expressed caution ahead of the Fed meeting. The bellwether 30-year Treasury bond lost 1/32 of a point in price, its yield unchanged at 6.02 percent from late Friday.
The dollar fell sharply against the yen and rose against the euro.
Caution ahead of Fed meeting
Analysts said there is about an even chance as to whether the Fed will increase short-term interest rates, and they expect trading flows to be choppy going into the meeting as many investors will sit on the sidelines.
The Federal Open Market Committee increased interest rates June 30 and Aug. 24 by a quarter of a percentage point each time. At the last meeting on Oct. 5, officials kept rates unchanged but shifted to a tightening bias. The change in bias means the central bank is ready to hike rates should it see any signs of inflation picking up in the economy.
As Y2K issues loom, many market participants feel the Fed will not hike rates at its Dec. 21 policy meeting - leaving Tuesday's meeting as the last chance this year for the Fed to tighten rates.
"If there are any leanings one way or another, one is towards tightening. Another quarter-point hike can't be ruled out. This represents an opportune time for the Fed to tighten," said Kevin Flanagan, economist at Morgan Stanley Dean Witter.
Meanwhile, Fed Chairman Alan Greenspan spoke about banking reform Monday to the American Council of Life Insurance in Washington D.C. The Fed chief did not mention monetary policy.
Technology shares manage gains
Despite uncertainty about the Fed, some technology shares posted gains. Among the Nasdaq top gainers, Red Hat (RHAT), the leading U.S. distributor of the Linux computer operating system, rose 3-9/16 to 105-3/8 after the company said Monday it is buying Cygnus Solutions for $674 million in stock. Cygnus, which is privately-held, makes Linux programming tools.
Some other winners include Ameritrade (AMTD), jumping 4-1/2, or nearly 21 percent, to 26-7/16. The online brokerage firm said Monday it will form a new online investment bank with two other online stockbrokers, T.D. Waterhouse Group (TWE) and Charles Schwab (SCH). T.D. Waterhouse also rose sharply, advancing 2-1/2, or more than 15 percent, at 19-1/8. Charles Schwab, in wobbly trade, edged up 3/8 to 43-1/4.
Ameritrade also benefited from BancBoston Robertson Stephens, which increased its eBrokerage transaction-growth projections to 15-20 percent from 10 percent, citing "sizzling" trading volumes on the Nasdaq.
Elsewhere in Internet commerce, Priceline.com , (PCLN), rose 3-5/16 to 59-15/16 after the online auction house announced a deal Monday with Ford Motor Co. (F). The companies soon will begin test-marketing allowing shoppers to use Priceline.com to purchase Ford vehicles. Ford added 1-1/4 to 54-5/8.
In corporate news, shares of Oak Industries Inc. (OAK) surged 19, or more than 38 percent, to 68-3/4. Corning Inc. (GLW), the fiber-optic cable producer, said Sunday it will buy Oak for $1.8 billion in stock. Oak makes and sells communications parts, including fiber-optic controls. However, Corning gave back early gains, falling 3-1/4 to 87-1/8.
Also noteworthy, big-name oil shares were little changed despite a sharp increase in crude-oil prices. In New York, Dec. crude-oil futures last traded near $25.17, a 34-month high.
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