Dow gains 160
as Fed meets

NEW YORK -- Blue-chip stocks rallied for a second straight session, surprising Wall Street with its momentum a day ahead of the Federal Reserve's interest rate announcement.

The Dow Jones industrial average rose 160.20 to close at 10,815.35, extending yesterday's 102.59-point gain. Volume was light throughout the session, magnifying price swings and suggesting that the rally, while broad-based, lacked conviction. The Standard & Poor's 500 rose 20.10 to 1,351.45, and the Nasdaq composite index rose 39.67 to 2,642.11.

Advancers beat decliners by a 5-to-3 margin on the New York Stock Exchange, with 1,825 up, 1,113 down and 585 unchanged. NYSE volume was 816.26 million shares vs. 645.31 million yesterday.

The NYSE composite index rose 9.10 to 637.99; the American Stock Exchange composite index gained 3.38 to 777.48; while the Russell 2000 index of smaller companies rose 5.47 to 454.08.

"There was no overwhelming moon-shot," said Larry Wachtel, market analyst for Prudential Securities. "But some buyers are back, ready to be adventurous."

The 30-year Treasury bond, meanwhile, gained 15/32, or $4.69 per $1,000 face amount, to a price of 88 30/32. Its yield dropped 4 basis points to 6.06 percent.

Traders continued to tread lightly while they waited to see if the Fed's Open Market Committee will raise interest rates by an expected 0.25 percentage point, or if the policy makers take a more aggressive approach to contain the economy and inflation.