Stocks rose Monday on hopes that the Federal Reserve will deliver another big rate cut when its two-day meeting adjourns on Wednesday.
Expectations are for a quarter-point rate cut from the Fed to shore up the troubled credit markets that sent stocks tumbling over the summer, although a few traders are holding out hopes that the Fed will deliver another half-point rate cut as it did in September. Fed funds futures trading suggests that the chance of another big rate cut are remote, however.
The tech sector gained about 0.5% in Monday’s trading session even though two of its biggest engines as of late traded down. Microsoft shed 1.3% after Friday’s big gain on a stellar earnings report, while Yahoo fell 5.5% on disappointment over the Hong Kong IPO of Chinese e-commerce portal Alibaba.com, according to an AP report. Yahoo holds a 39% stake in Alibaba’s parent company.
BEA Systems was unchanged after Oracle’s takeover offer expired, leaving its future uncertain.
Dell added 1.7% after Goldman Sachs added the company to its “conviction buy” list, while HP shed 1.3% after being removed from the same list.
NII Holdings and Juniper Networks gained more than 5% each on upgrades. Nvidia lost 2.3% on a Lehman Brothers downgrade.
Motorola lost 1.5% on reports of a $1.4 billion debt sale.
The Nasdaq rose 13 to 2817, the S&P gained 5 to 1540, and the Dow gained 63 to 13,870. Volume declined to 3.12 billion shares on the NYSE, and 2.09 billion on the Nasdaq. Advancers led by a 19-13 margin on the NYSE, and 15-14 on the Nasdaq. Upside volume was 65% on the NYSE, and 64% on the Nasdaq. New highs-new lows were 291-85 on the NYSE, and 197-129 on the Nasdaq.