Stocks Rise Ahead of Fed Announcement

Stocks rose Wednesday morning ahead of the Federal Reserve's announcement on interest rates, expected to be released at 2:15 p.m.

The ISDEX gained 15 to 730. The Nasdaq rose 76 to 3935, the Dow added 40 to 10,545, and the S&P 500 tacked on 6 to 1456. Volume was ahead of Tuesday's pace, with 460 million shares changing hands on the NYSE and 725 million on the Nasdaq. Breadth was even on the NYSE, while advancers led decliners 20 to 15 on the Nasdaq. Analysts expect the Fed to leave short-term interest rates unchanged, but they will be watching the accompanying bias statement for hints on future direction. Anything other than no change in rates with a continued tightening bias would be viewed as a surprise. Palm and Cabletron Systems are set to announce earnings after the bell.

Shares of S1 Corp. was the latest Net stock to rebound from recent woes, leading the ISDEX higher with a gain of 4 5/8 to 24 9/16. CMGI rose 3 11/16 to 48 7/16. Amazon.com added 2 1/8 to 38 5/8 after CEO Jeff Bezos defended the company and said it will be able to fund operations from cash flow by the end of the year. Lehman Brothers bond analyst Ravi Suria said recently the company will run out of cash in the first quarter of 2001.

Internet infrastructure plays resumed their leadership. Juniper Networks rose 9 1/2 to 135 15/16 after being named one of Lehman Brothers' 10 annual Uncommon Values. Networking stocks figured prominently on the list, with Cisco , Nortel and Tellabs making the cut. Corning rose 5 15/16 to 258 15/16, SDL Inc. gained 7 7/8 to 285, and JDS Uniphase tacked on 4 3/4 to 123 3/4, stemming a sharp recent decline.

Companies continued to announce wireless Internet strategies. RealNetworks added 3 3/8 to 47 9/16 on news of an alliance with Nokia to provide Internet media technology for future mobile devices.

Phone.com recouped 1 1/4 to 69 1/4 on news that ALLTELL will license the company's UP Link Server to enable Internet access for wireless customers.

AskJeevse gained 1/16 to 16 7/8 on news that its natural-language answering service is now available to Palm users.

24/7 Media rose 1/2 to 13 5/8 after unveiling its 24/7 Media Wireless Network that enable advertisers to deliver ads via the company's wireless ad server.

Aether Systems continued to gain on news of its wireless alliance with Microsoft , adding 3 1/8 to 199 1/8. Merrill Lynch reiterated its Buy rating and $350 price target.

Kforce.com soared 1 11/16 to 6 15/16 after Goldman Sachs added the beaten-down company to its Recommend List, based on valuation. Goldman lowered FY 2000 earnings estimates to 43 cents a share from 50 cents, and lowered its price target from $20 to $15. Goldman expects a long-term growth rate of 22.5%.

Buy.com gained 1/8 to 5 5/32 despite a USB Piper Jaffray downgrade from Strong Buy to Buy. The firm said Buy.com may miss revenue estimates. The firm also downgraded and reduced estimates for Ameritrade , which gained 1/8 to 12 1/8.

Priceline.com gained 3/4 to 40 3/4 on news that the company will expand into Europe.

eToys added 1/2 to 5 9/16 on an ABN AMRO Outperform rating and $12 price target.

Webhire gained on news of a $16 million investment led by Korn/Ferry International and Softbank.

Some technical comments on the market: Only an hour to go until the Fed announcement. The market looks good today, but caution is still advised until we get a definitive break from this tight trading range. On