Wall Street advances in anticipation of Fed cut
June 24, 2001
NEW YORK (AP) – Stocks advanced early Monday in anticipation of a Federal Reserve interest rate cut expected this week.
The gains were moderate, though, reflecting the market’s fragility and investors’ shaken confidence in light of recent corporate warnings and layoff announcement.
In early trading on Wall Street, the Dow Jones industrial average was up 22.61 at 10,627.20.
Broader stock indicators also rose. The Standard & Poor’s 500 index gained 4.21 to 1,229.56, and the Nasdaq composite index was up 20.13 at 2,054.97.
The Fed is widely expected to cut interest rates for a sixth time this year when it meets Tuesday and Wednesday.
Previous rate cuts have sent stocks soaring, but most of the gains have been short-lived. Analysts expect much the same this time, but say the news will still be welcomed by investors tired of companies’ reducing their earnings projections and cutting jobs.
Wall Street has been plagued by such bad news for nearly a month now ahead of second-quarter earnings season.
Monday’s gains came from stocks across the spectrum, but particularly in technology. That sector, which has taken a beating in recent weeks, got a lift from stocks including IBM, which rose $1.31 to $114.81, and Intel, up 81 cents at $28.42.
Other issues were more mixed. Wal-Mart rose 32 cents to $50.30, while American Express, part of the financial sector that usually benefits from rate cuts, fell 12 cents to $40.63.
“I think that in the technology companies we’re probably getting close to a bottom,” said Robert Harrington, co-head of listed block trading at UBS Warburg. “We’re getting lower interest rates. Now all we have to do is wait for earnings to improve.”
Also Monday, Washington Mutual said it was buying Dime Bancorp for $5.2 billion in a cash and stock deal that gives the nation’s largest thrift a foothold in the Northeast and expands its huge mortgage business. Washington Mutual fell 71 cents to $38.19, while Dime gained $1.42 to $38.30.
Advancing issues led decliners more than 3 to 2 on the New York Stock Exchange. Volume came to 117.56 million shares, compared with 151.64 million at the same point Monday.
The Russell 2000 index advanced 1.52 to 490.17.