Blue-chip stocks posted strong gains Tuesday ahead of an expected cut in short-term interest rates as the Dow Jones industrial average rallied up 179 points to 10,881.20. The Nasdaq composite closed virtually unchanged at 2,838.35.
As the Federal Reserve Board’s Open Market Committee hunkered down for the first day of its highly anticipated meeting, technology investors adopted a wait-and-see strategy.
“There's no sense of urgency to get really aggressive ahead of the fed. There's a real overall cautionary approach right now,” said Charles Payne, market analyst at Wall Street Strategies. “Most of the solid, long-term money is on the sidelines.”
While the markets awaited news from the Federal Reserve meeting, a key gauge of U.S. consumer confidence plunged in January to its lowest level in more than four years, bolstering the case for aggressive interest-rate cuts to ward off a recession.
Cisco Systems (CSCO) moved up 75 cents to $38. Lucent Technologies (LU) rose 58 cents to $18.57 and Nortel Networks (NT) closed up 15 cents to $39.
Microsoft (MSFT) shaved off $1.13 to $63.38. Oracle (ORCL) trimmed 13 cents to $30.31 and Sun Microsystems (SUNW) closed off $1.50 to $32.06.
EarthLink (ELNK) clipped 6 cents to close at $8.44 after it reported fourth-quarter earnings that topped estimates Tuesday. The Internet service provider also outlined its expectations for revenue and earnings in 2001.
eGain Communications Corp. (Nasdaq: EGAN) tacked on 84 cents to $5.75 Tuesday after the company reported a narrower-than-expected second quarter loss and said it would reach cash breakeven ahead of schedule.
Amazon.com (AMZN) lost $1.19 to $18.94 ahead of its earnings report. America Online (AOL) and Yahoo (YHOO) closed off 69 cents and 19 cents a share, respectively, while eBay (EBAY) gained 88 cents to close at $53.19. CMGI (CMGI) added 38 cents to $6.84.
The executive shakeup continued at Gateway (NYSE: GTW), off 68 cents to $20.98, following the departure of the company's chief executive officer and other key executives.
Apple Computer (AAPL) inched up 6 cents to $21.75. Dell (DELL) clipped 31 cents to $28.13 and Compaq Computer (CPQ) finished up 80 cents to $24.35.
Legato Systems Inc. (Nasdaq: LGTO) gained $1.81 to $18.06 after a strong fourth-quarter report that nailed earnings estimates and vaulted past revenue expectations.
Shares of Expedia (Nasdaq: EXPE) surged 81 cents to $17.56 after the company beat estimates for its second quarter. Analysts cheered the results.
Terra Lycos (Nasdaq: TRLY), up $1 to $16.63, said it bought online financial community firm Raging Bull from AltaVista Co., which is majority-owned by CMGI, in an all-cash deal.