MARKET CLOSE: Dow hits all-time high ahead of Fed meeting

Investors snapped up blue-chip and technology stocks at a frenetic pace Monday, sending the Dow Jones industrial average up 199 points to a record high of 11,299.76. The Nasdaq composite picked up 71 points to 2,719.57.

"Today the buyers stepped on the gas," said Alan Ackerman, a senior vice president and market strategist at Fahnestock and Co. "The tone is good. Buying begat buying. This is impressive action indeed."

The Federal Reserve Board's Open Market Committee will meet Tuesday to decide the future of short-term interest rates. With the market already expecting a one-quarter percent increase, investors decided to grab some bargains ahead of this foregone conclusion.

If, by chance, the Fed doesn't adjust interest rates, the market stands to make strong gains for the rest of the week.

Sun Microsystems Inc. (SUNW) added 9/16 to 74 13/16 after it announced plans for a stock-for-stock merger worth about $540 million with Forte Software Inc. (FRTE). Forte closed up 4 1/8 to 21 1/8.

Microsoft Corp. (MSFT) shot up 3 1/16 to 86 7/16 and Oracle Corp. (ORCL) rose 9/16 to 37 9/16.

Internet stocks were popular again Monday as America Online Inc. (AOL) shot up 3 3/16 to 98 3/8 and Yahoo! Inc. (YHOO) rose 7 1/8 to 152 1/8. Excite@Home Corp. (ATHM) fought up 2 1/4 to 39 15/16 while Infoseek Corp. (SEEK) and Lycos Inc. (LCOS) closed up 9/16 and 13/16 a share, respectively.

Amazon.com Inc. (AMZN) picked up 4 15/16 to 118 3/8.

Among widely held PC stocks, Dell Computer Corp. (DELL) finished up 2 9/16 to 45 13/16; Gateway Inc. (GTW) tacked on 3 3/16 to 93 11/16; Apple Computer Inc. (AAPL) marched up 1 9/16 to 60 3/4 and Compaq Computer Corp. (CPQ) closed off 5/16 to 24 1/16.

Intel Corp. (INTC) gained 3 to 82 15/16. Advanced Micro Devices Inc. (AMD) inched up 7/8 to 19 1/8 and International Business Machines Corp. (IBM) ended up 2 11/16 to 124 7/16.

Stamps.com (STMP) rose 4 3/8 to 35 after it said it has a deal with Microsoft to offer its Internet postage service through the Microsoft Office Update Web site.

PSINet Inc. (PSIX) closed up 5/16 to 45 7/8 said it has agreed to buy Transaction Network Services, Inc. (NYSE: TNI), which closed up 9 to 43 1/4, in a deal valued near $720 million.

Cisco Systems Inc. (CSCO) tacked on 1 5/8 to 65 3/4. 3Com Corp. (COMS) inched up 1/4 to 23 13/16 and Lucent Technologies Inc. (LU) closed up 1 9/16 to 65 3/16.