Stocks Push Higher As Investors Remain Upbeat After Fed Rate Cut

By Joe Bel Bruno Associated Press

NEW YORK — Wall Street traded higher Monday with investors upbeat about the Federal Reserve rate cut while they await further hints about the economy’s direction in data to be released this week.

Reports that begin rolling out Tuesday with existing home sales data for August and the Richmond Fed’s regional manufacturing survey will help drive stocks. Many investors hope readings on durable goods and consumer spending will give the Fed room to cut rates still further.

However, lower rates — and the potential for more cuts — continued to weigh against the U.S. dollar. The U.S. currency dropped to a 15-year low against six other major currencies.

There are no economic reports due Monday. However, Dallas Fed President Richard Fisher said a downturn in inflation gives policymakers “some wiggle room” to further cut interest rates. Speeches from Fed Chairman Ben Bernanke and Chicago Fed governor Charles Evans are on tap for later during the session.

In late-morning trading, the Dow Jones industrials rose 37.96, or 0.27 percent, to 13,858.15.

Broader indicators were also higher, with the Standard & Poor’s 500 index fell 2.08, or 0.14 percent, to 1,527.84, while the Nasdaq composite index rose 16.77, or 0.63 percent, at 2,687.99.

Bonds edged lower, with the yield on the benchmark 10-year Treasury note rising to 4.64 percent from 4.63 percent late Friday. Treasuries have rallied since last week’s rate cut.

The dollar fell against major currencies, while gold prices dipped.

Oil prices fell as a tropical depression in the Gulf of Mexico dissipated without causing damage to key oil and gas infrastructure. A barrel of light sweet crude dropped 79 cents to $80.83 on the New York Mercantile Exchange.

In corporate news, General Motors Corp. faced a morning deadline in contract talks as United Auto Workers have threatened to strike if a new contract isn’t reached. Talks continued with a union strike deadline that expired at 11 a.m EDT. GM shares rose $1, or 2.9 percent, to $35.93.

Ford Motor Co. shares rose 25 cents, or 3.1 percent, to $8.48 after Chief Executive Alan Mullaly said the auto maker is in talks with potential buyers of the company’s Jaguar and Land Rover Brands. The company also began operations of its newest joint-venture factory in China, where it will produce both the Ford and Mazda brands.

Limits on Fannie Mae’s and Freddie Mac’s investment portfolios could be lifted in February if they begin filing timely and audited financial statements, a top regulator told The Wall Street Journal. Under the plan, the Office of Federal Housing Enterprise Oversight would allow the two government-backed mortgage providers to be given more flexibility and to expand.

Fannie Mae shares fell 29 cents to $62.43.

Dell Inc. rose 36 cents to $28.12 as it said it will launch a retail presence in China by selling computers through the country’s biggest chain of electronics stores. The deal extends Dell’s strategy of expanding beyond its traditional Internet-and-phone sales model into retail to better compete with rivals.

Xerox Corp. rose 7 cents to $17.09 after it launched a system promising to slash the cost of color printing for high-volume users willing to pay more for machines.

The Russell 2000 index of smaller companies fell 0.56, or 0.07 percent, 812.55.

Advancing issues beat out decliners by a 6 to 5 basis, where volume came to 157.1 million shares on the New York Stock Exchange.

In European trading, Britain’s FTSE 100 rose 0.26 percent, Germany’s DAX index fell 0.22 percent, and France’s CAC-40 shed 0.03 percent.

In Asia earlier, Japan’s Nikkei index fell 0.62 percent and Hong Kong’s Hang Seng Index rose 2.74 percent.

(c) 2007 Deseret News (Salt Lake City). Provided by ProQuest Information and Learning. All rights Reserved.