NEW YORK — Stocks staged a late afternoon rally Monday, driven by positive corporate news and growing confidence the Federal Reserve will leave interest rates alone this month.

Technology shares, which had been stuck on a virtual seesaw earlier in the session, charged upward with the help of a strong rebound in semiconductor shares.

With many Wall Streeters away on summer vacation and investors awaiting Wednesday's U.S. Consumer Price Index for more confirmation of the Fed's next move, the modest afternoon rally advanced at a slow pace.

"There are a lot of people on the sidelines waiting to see how this week plays out. We've got a CPI number coming out Wednesday, and we are knocking on the door of a Fed meeting,'' said Art Hogan, chief market analyst at Jefferies & Co.

The Dow Jones industrial average shot up 112 points, or 1.02 perent, to 11,140. On Friday, the Dow climbed 119 points and closed above 11,000, its highest close since April 25.

The Fed holds its next policy-setting meeting next Tuesday. The central bank, which has hiked interest rates six times since last June, is widely expected to leave interest rates unchanged this time around.

The technology-stacked Nasdaq Composite Index, meanwhile, rose 42 points, or 1.12 percent, to 3,831.

The broader Standard & Poor's 500 Index advanced 13 points, or 0.94 percent, at 1,485.

J.P. Morgan & Co. Inc. was leading the Dow higher, rallying 3 to 146-7/8. The stock was caught up in a rush for shares of brokerages, which have benefited in recent sessions from the outlook for strong profits after a batch of stock offering deals and mergers.

Dell Computer Corp, the Nasdaq's most active share, fell 15/16 to 36-3/4 after analysts forecast a less robust second half for the world's No. 2 personal computer maker.

But shares of computer chip makers gave the Nasdaq a jolt of energy as they bounced back from recent declines. The Philadephia Stock Exchange's semiconductor index rallied 6.17 percent.

Retailers were also propping up the 30-stock Dow index. Home Depot, the world's largest home improvement retailer, rose 2-7/8 to 58-13/16, while Wal-Mart Stores Inc. , the world's No. retailer, was up 5/8 at 52-3/16.

Earlier in the session, another home-improvement retailer Lowe's Cos. Inc., posted a 21 percent increase in its second-quarter income. Lowe's, not a Dow component, was up 3-3/16 to 46-15/16.

Overall, retailers were higher with the Standard and Poor's retail index up 2.11 percent.

Hewlett-Packard was also helping the Dow higher, gaining 3-1/2 to 113-1/2. The personal computer giant reports its third-quarter earnings on Wednesday.

Biotechnology company PathoGenesis Corp, was also a stand-out on the technology-heavy gauge. It gained 5-3/16 to 37-15/16 after Chiron Corp agreed to buy the company for $700 million, expanding its franchises in biopharmaceuticals, vaccines and blood testing. Chiron was off 2-5/8 at 46.

On the New York Stock Exchange, Micron Technology Inc. rose 4-5/16 to 80 after analysts upgraded the world's second largest chip maker.

"Things are probably going to remain in a trading range with the Fed meeting about a week away,'' said Tony Dwyer, chief market strategist at Kirlin Holdings. "The market is going to just mark time.''

Monday's economic news was mostly encouraging. U.S. business inventories piled up at a stronger-than-expected 0.9 percent in June. Economists had forecast a 0.5 percent pickup.

A rise in inventories can indicate either a weakening in demand, which could mean that goods are accumulating on producers' shelves, or stockpiling by businesses in anticipation of more vigorous sales.