Stocks staged a late afternoon
rally Monday, driven by positive corporate news and growing
confidence the Federal Reserve will leave interest rates alone
Technology shares, which had been stuck on a virtual seesaw
earlier in the session, charged upward with the help of a
strong rebound in semiconductor shares.
With many Wall Streeters away on summer vacation and
investors awaiting Wednesday's U.S. Consumer Price Index for
more confirmation of the Fed's next move, the modest afternoon
rally advanced at a slow pace.
"There are a lot of people on the sidelines waiting to see
how this week plays out. We've got a CPI number coming out
Wednesday, and we are knocking on the door of a Fed meeting,''
said Art Hogan, chief market analyst at Jefferies & Co.
The Dow Jones industrial average shot up 112
points, or 1.02 perent, to 11,140. On Friday, the Dow climbed
119 points and closed above 11,000, its highest close since
The Fed holds its next policy-setting meeting next
Tuesday. The central bank, which has hiked interest rates six
times since last June, is widely expected to leave interest
rates unchanged this time around.
The technology-stacked Nasdaq Composite Index,
meanwhile, rose 42 points, or 1.12 percent, to 3,831.
The broader Standard & Poor's 500 Index advanced 13
points, or 0.94 percent, at 1,485.
J.P. Morgan & Co. Inc. was leading the Dow higher,
rallying 3 to 146-7/8. The stock was caught up in a rush for
shares of brokerages, which have benefited in recent sessions
from the outlook for strong profits after a batch of stock
offering deals and mergers.
Dell Computer Corp, the Nasdaq's most active
share, fell 15/16 to 36-3/4 after analysts forecast a less
robust second half for the world's No. 2 personal computer
But shares of computer chip makers gave the Nasdaq a jolt
of energy as they bounced back from recent declines. The
Philadephia Stock Exchange's semiconductor index
rallied 6.17 percent.
Retailers were also propping up the 30-stock Dow index.
Home Depot, the world's largest home improvement
retailer, rose 2-7/8 to 58-13/16, while Wal-Mart Stores Inc.
, the world's No. retailer, was up 5/8 at 52-3/16.
Earlier in the session, another home-improvement retailer
Lowe's Cos. Inc., posted a 21 percent increase in its
second-quarter income. Lowe's, not a Dow component, was up
3-3/16 to 46-15/16.
Overall, retailers were higher with the Standard and Poor's
retail index up 2.11 percent.
Hewlett-Packard was also helping the Dow higher,
gaining 3-1/2 to 113-1/2. The personal computer giant reports
its third-quarter earnings on Wednesday.
Biotechnology company PathoGenesis Corp, was also
a stand-out on the technology-heavy gauge. It gained 5-3/16 to
37-15/16 after Chiron Corp agreed to buy the company
for $700 million, expanding its franchises in
biopharmaceuticals, vaccines and blood testing. Chiron was off
2-5/8 at 46.
On the New York Stock Exchange, Micron Technology Inc.
rose 4-5/16 to 80 after analysts upgraded the world's
second largest chip maker.
"Things are probably going to remain in a trading range
with the Fed meeting about a week away,'' said Tony Dwyer, chief
market strategist at Kirlin Holdings. "The market is going to
just mark time.''
Monday's economic news was mostly encouraging. U.S.
business inventories piled up at a stronger-than-expected 0.9
percent in June. Economists had forecast a 0.5 percent pickup.
A rise in inventories can indicate either a weakening in
demand, which could mean that goods are accumulating on
producers' shelves, or stockpiling by businesses in
anticipation of more vigorous sales.