Stocks Advance; Dow Up 91.45
NEW YORK (AP) _ Rising bond prices drew stocks higher today as investors awaited the outcome of the Federal Reserve’s meeting on interest rates.
With less than 30 minutes before the Fed’s expected 2:15 p.m. announcement of its decision, the Dow Jones industrial average was up 91.45 at 10,852.20.
Broader stock indicators were also higher. The Standard & Poor’s 500 index was up 16.34 at 1,410.73, and the Nasdaq composite index was up 36.01 at 3,255.55.
Many analysts had expected trading this morning to mirror Monday’s session, when stocks shifted in a narrow range and finished little changed. Many investors planned to stay on the sidelines until the Fed’s announcement on whether it will raise short-term interest rates.
A rate increase today would be the third of 1999, taking back three cuts initiated last year to help end a global financial crisis. The Fed raised rates in June and in August in an effort to slow the nation’s torrid economic growth, and in recent weeks, data has suggested the central bank may have succeeded.
This morning, bond prices, which are highly sensitive to inflation and interest rates, edged higher. That brought the yield on the benchmark 30-year Treasury bond as low as 6.01 percent, the lowest level since Sept. 24. The 30-year Treasury yielded 6.02 percent late Monday.
``There’s a lot of energy in the market,″ said Alan Ackerman, senior vice president at Fahnestock & Co. in New York. ``There will be no sudden death to stocks, whether the Fed raises rates or leaves them on hold.″
The market may have received a measure of support from the Fed’s report today that showed industrial production at the nation’s factories, utilities and mines surged in October. Industrial production rose a bigger-than-expected 0.7 percent, the largest jump since a 0.7 percent increase in March.
Cyclical stocks, which fare well during periods of economic growth, were mostly higher today. Caterpillar rose 1 11/16 to 57 1/4, and 3M rose 1 7/8 to 99 5/16.
Advancing issues outnumbered decliners by a 3-to-2 margin on the New York Stock Exchange, where volume was ahead of Monday’s quiet pace.
The Russell 2000 index of smaller companies rose 2.79 to 455.76.