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Dow Jumps 85 in Early Trading

August 23, 1999

NEW YORK (AP) _ Stocks opened higher today, with technology shares showing surprising strength a day before the Federal Reserve announces whether it will raise interest rates.

In the first hour of trading on Wall Street, the Dow Jones industrial average was up 85.17 at 11,185.78.

Broader stock indicators were also higher. The Standard & Poor’s 500 index was up 10.55 at 1,347.16, and the Nasdaq composite index was up 32.11 at 2,680.44.

The Fed’s Open Market Committee meets Tuesday, and most economists predict the central bank will raise short-term interest rates a quarter-percentage point. Since higher interest rates can cut into corporate profits, stocks have faltered since the Fed first raised the possibility of a rate increase in July.

In recent sessions, however, stocks have edged back toward record highs as the market absorbed the likelihood of higher rates. This morning, the Dow was within 25 points of its July 16 record close of 11,209.84.

Internet stocks were buoying the Nasdaq. Amazon.com was up 5 9/16 to 119, and Yahoo rose 5 to 150. Many of those stocks have been driven down by concerns over interest rates as their high prices and often meager earnings drove investors in search of more guaranteed investments.

United Water Resources rose 2 to 33 1/16 after French utility Suez Lyonnaise des Eaux, launched a $35-per-share bid to acquire full ownership of the company.

Advancing issues outnumbered decliners by a 2-to-1 margin on the New York Stock Exchange, where volume came to 84.96 million shares, behind Friday’s pace.

Overseas, Japan’s Nikkei stock average rose 0.75 percent. In afternoon trading, Germany’s DAX index was up 0.8 percent, Britain’s FT-SE 100 was up 1.4 percent, and France’s CAC-40 was up 0.6 percent.

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