Closing Market Report
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Investors await Fed's next word
By Christopher Wang
Associated Press
NEW YORK » Stocks finished a quiet session little changed yesterday as investors' anticipation of the Federal Reserve's decision on interest rates muted their reaction to lower oil prices and a trio of acquisitions.
With no new reports to offer clues about the economy, investors traded cautiously ahead of the Fed's latest move on interest rates when policymakers meet tomorrow. Last Friday, signs of moderating job growth fueled hopes that a cooling economy would prompt the central bank to consider pausing its rate tightening.
"I think you'll see a lot of waffling" ahead of the Fed meeting, said Rick Pendergraft, an equity trader at Schaeffer's Investment Research. "Everyone is pretty much expecting a quarter percentage point lift this time, but it's up in the air for the June meeting."
Meanwhile, the market showed some excitement overWachovia's $25 billion takeover ofGolden West Financial Corp. andThermo's $10.6 billion offer for Fisher Scientific International Inc. Berkshire Hathaway Inc. also made its first acquisition of an overseas company.
The Dow Jones industrial average rose 6.80, or 0.06 percent, to 11,584.54, its highest close in more than six years. The Dow is 138 points from its all-time high of 11,722.98, reached on Jan. 14, 2000.
Broader stock indicators stood near their highs from February 2001. The Standard & Poor's 500 index fell 1.10, or 0.08 percent, to 1,324.66, and the Nasdaq composite index gained 2.42, or 0.1 percent, to 2,344.99.
The interest rate debate weighed on the dollar and bonds, with the yield on the 10-year Treasury note ticking up to 5.12 percent from 5.11 percent late Friday. The U.S. dollar plunged against the Japanese yen and was slightly lower versus European currencies.
Analysts say Wall Street's nervousness about the Fed's next move on interest rates is restraining stocks even though the Dow is within reach of its all-time high. While most believe the central bank will raise the nation's key lending rate to 5 percent tomorrow, investors will be picking apart the Fed's policy statement for signs of whether more hikes are coming.
Still, investors have been impressed by the economy's strength despite surging energy costs and the Fed's mission to stifle inflation by gradually raising short-term interest rates. Enthusiasm over solid corporate earnings growth -- companies in the S&P 500 index have averaged double-digit gains for 15 consecutive quarters -- have carried stocks sharply higher so far this year.