Stocks pushed higher after the Federal Reserve
made it official that it did not change interest rates in its
two-day policy meeting, which wound down Wednesday afternoon.
At 3 p.m. on Wall Street, the Dow Jones industrial average was
up up 122.81 at 9,396.93. After recovering from a wobbly morning,
the Dow was up 98 points when the announcement came at 2:15 EST
that Fed governors had left short-term interest rates unchanged.
The Dow dipped a bit immediately following the announcement, as
some investors "sold on the news," but soon resumed climbing.
Stock investors were on Fed watch all morning. Although they
didn't really expect it, there was a chance that the Fed would
respond to recently robust economic data by raising rates, which
would be bad for stocks because it would raise corporate borrowing
But, "our view is that they really have nothing to worry
about," Alan Skrainka, chief market strategist at Edward Jones of
St. Louis, said in late morning. "This is one of the easiest
decisions the Fed has had to make. Even if they change the bias
toward tightening, we just remind people that that happened last
year before they lowered interest rates twice."
Technology issues were again leaders to the upside, pushing
broad-market indexes, where technology names are heavily
represented, higher. The Standard & Poor's 500 index was up 13.03
at 1,275.02, and the Nasdaq composite index was up 19.03 at
Advancing issues led decliners by 10 to 9 on the New York Stock
Exchange, where volume came to 701.63 million shares, up slightly
from Tuesday's pace.
Cisco Systems shares were down 1 1/16 at 110 13/16. The company
reported earnings late Tuesday that were one penny above analysts'
expectations, but Chief Executive John Chambers warned this morning
that there is some concern about how the Year 2000 computer issue
will affect high-tech spending later in 1999.
But many computer-related stocks were higher, with America
Online up 5 3/16 on the New York Stock Exchange.
Meanwhile, shares of Dow component Goodyear Tire and Rubber were
up 1 5/8 at 52. The company announced an alliance with Japan's
Sumitomo Rubber Industries Ltd. and fourth-quarter earnings that
matched analysts' expectations. The company also separately
announced a worldwide cost-cutting effort that will eliminate up to