Dow gains 128
Associated PressNEW YORK - Stocks rose sharply today, led by telecommunications and transportation issues, as news of big corporate mergers gave interest-rate weary investors something to be excited about.
The Dow Jones industrial average was up 128.23 to close at 10,401.23.
The Standard & Poor's 500 index was up 21.79 at 1,304.60, and the Nasdaq composite index was 59.12 higher at 2,795.97.
Advancers led decliners by an 8-to-7 margin on the New York Stock Exchange, with 1,755 up, 1,244 down and 519 unchanged on the New York Stock Exchange. NYSE volume totaled 799.52 million shares vs. 895.24 million in Friday's session. The NYSE composite index rise 8.11 to 600.59; the American Stock Exchange composite gained 3.08 to 426.61; and the Russell 2000 index of smaller companies rose 3.08 at 426.61.
"With the pounding that the market took in early and late September, it got pretty oversold, so it was set up for a reflex bounce or a short-term rally," said Richard McCabe, chief market analyst at Merrill Lynch & Co.
But, he predicted, the rally will be short-lived. "We haven't gotten to the bottom yet."
U.S. Treasury bond prices rose as investors bet the Federal Reserve won't raise interest rates when policy-makers meet tomorrow. The 30-year bond gained 19/32 point, or $4.69 per $1,000 face value; the yield fell 4 basis points to 6.09 percent. Yields on three-month bills, among the most sensitive to rate expectations, declined 3 points to 4.82 percent. Bonds also got a boost from a stronger dollar, which posted its biggest gain against the yen in a week.