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Stocks Rise on Eve of Expected Fed Rate Hike

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Reuters

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Mar 24, 1997, 3:00:00 AM3/24/97

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<A HREF='http://www.clari.net/'>ClariNet</A> <CLARI-ITEM TYPE>story</CLARI-ITEM> <CLARI-ITEM SLUGWORD>BUSINESS-STOCKS</CLARI-ITEM> from <CLARI-ITEM FROM>Reuters</CLARI-ITEM> 
<H1><CLARI-ITEM HEADLINE>Stocks Rise on Eve of Expected Fed Rate Hike</CLARI-ITEM></H1>
<CLARI-ITEM COPYRIGHT>Copyright 1997 by Reuters</CLARI-ITEM> / <CLARI-ITEM DATE>Mon, 24 Mar 1997 16:01:09 PST</CLARI-ITEM>
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 NEW YORK (Reuter) - Blue-chip stocks soared Monday as Wall
Street bet that the market already had taken into account a
small increase in interest rates expected at Tuesday's meeting
of Federal Reserve policy-makers.
 The Dow Jones industrial average closed up 100.46 points at
6,905.25, recovering from a four-session string of losses that
wiped 150 points off the blue-chip index. It was the biggest
gain for the Dow since Feb. 12, when it rose more than 103
points.
 But in the broader market, declining issues led advances
1,320 to 1,169 on moderately active New York Stock Exchange
volume of 442 million shares.
 Despite the blue-chip rally, technology stocks continued to
be hit by selling, led by a downturn in software giant Microsoft
Corp.
 The Nasdaq composite index, a barometer of technology
stocks, lost 11.43 points to 1,242.64, and is now down more than
10 percent from its Jan. 22 high of 1,388.
 The overall market appeared to have already discounted a
quarter percentage point increase in short-term interest rates
from the central bank's Federal Open Market Committee.
 The Fed policy-makers meet at 9 a.m. Eastern time (1400 GMT)
Tuesday and following recent practice, the result of the meeting
should be known around 2:15 p.m.
 In the bond market, the key 30-year Treasury bond rose more
than half a point, and its yield fell to 6.92 percent from
Friday's close of 6.97 percent. Bond prices and yields move in
opposite directions.
 Trading was hectic at the end of the session as investors
prepared for the long-awaited Fed meeting.
 Hints from Fed Chairman Alan Greenspan and some recent
economic data have convinced Wall Street that a small increase
in short-term interest rates is in the offing.
 ``Investors feel that the rate hike is already built into
current prices,'' said Bruce Bittles, market strategist at J.C.
Bradford. ``They're just coming out and buying stocks, betting
that the market is going to rally even if (the Fed) does raise
rates.''
 Any rate hike would be the first by the Fed since February
1995.
 Technology shares were further bloodied by worries that the
group will not be able to meet lofty expections for earnings
growth.
 Investors' mood soured on reports that Microsoft's Windows
95 update, code-named Memphis, probably would not be released in
1997 as previously anticipated.
 Microsoft ended down 3 7/8 to 90 1/8 in heavy Nasdaq trading,
recovering from a session low of 87 1/2.
 Other big-name technology stocks were caught in the
downdraft. Cisco Systems Inc. shed 2 1/8 to 47 1/8 and Texas
Instruments Inc. gave up 2 3/8 to 75.
 ``A stumble for Microsoft is a stumble for the overall tech
market,'' said Peter Coolidge, senior equity trader at Brean
Murray & Co.
 Investors also pounded a handful of stocks in companies
warning their quarterly profits would not meet expectations.
 ``The trigger fingers are awfully itchy these days,'' said
Charlie Crane, chief market strategist at Key Asset Management.
 Idexx Laboratories Inc. sank 20-5/16 to 11-11/6, a loss of
more than 63 percent, after the biotechnology company said it
expected its first quarter earnings to fall significanlty below
analysts' estimates.
 Sonic Corp. plunged 35 percent, losing 7 1/8 to 13 1/4, after the
drive-in restaurant company said its second-quarter earnings
would fall short of analysts' estimates because of
slower-than-expected growth in store openings.
 Champion Enterprises Inc., which builds manufactured homes
and medium-duty buses, fell 3 3/8 to 14 3/4 after it warned its first
quarter results would fall short of Wall Street forecasts.
 Medic Computer System Inc., a developer of physician
practice management systems, fell 14 7/8 to 13 1/8 on a profit
warning.
 Bucking the trend, Cabletron Systems Inc. gained 7/8 to 29 1/2
after the company reported fiscal fourth quarter earnings that
were in line with expectations.
 The Standard & Poor's composite index of 500 stocks rose
6.79 points to 790.89. The American Stock Exchange index was off
3.28 at 587.94.
 The NYSE Composite index of all listed common stocks rose
3.20 to 416.00. The average share was up 32 cents.
 The Wilshire Associates Equity Index -- the market value of
NYSE, American and Nasdaq issues -- was 7,501.444 up 33.372 or
0.45 percent.
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Reuters

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Mar 25, 1997, 3:00:00 AM3/25/97

<A HREF='http://www.clari.net/'>ClariNet</A> <CLARI-ITEM TYPE>story</CLARI-ITEM> <CLARI-ITEM SLUGWORD>BUSINESS-STOCKS</CLARI-ITEM> from <CLARI-ITEM FROM>Reuters</CLARI-ITEM> 
<H1><CLARI-ITEM HEADLINE>Stocks Rise on Eve of Expected Fed Rate Hike</CLARI-ITEM></H1>

<CLARI-ITEM COPYRIGHT>Copyright 1997 by Reuters</CLARI-ITEM> / <CLARI-ITEM DATE>Tue, 25 Mar 1997 3:54:10 PST</CLARI-ITEM>
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 NEW YORK (Reuter) - Blue-chip stocks soared as Wall Street

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