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MARKET PREVIEW: Wall Street awaits Fed

All eyes will be on Alan Greenspan's briefcase Tuesday as the Federal Reserve meets to discuss its response to the slowing U.S. economy. Trading in Asia was mixed, the major European markets all gained ground and the Dow is set to open higher.


Investors will be eagerly awaiting the today's announcement from the Fed, regarding its stance on the slowing economy. While there is no general consensus, most believe that the Fed will issue a statement that the risk of recession at least matches concerns about the risk of future inflation.

Others predict the Fed may adopt a more proactive stance and actually cut interest rates for the first time since November 1998. Other analysts say they expect the Fed to maintain its neutral bias at today's meeting, while leaving a possible rate cut for the new year.

Optical networking giant Ciena Corp. (NASDAQ: CIEN) said it would buy privately-held Cyras Systems, Inc. for 27 million shares of Ciena common stock, valuing the deal at $2.6 billion based on yesterday's closing price.

According to a memo from Microsoft (Nasdaq: MSFT) CEO Steve Balmer, the company plans to cut costs in the coming fiscal year, while boosting salaries to some of its employees to make sure they don't defect to competitors.

Expect the following technology stocks to be among Tuesday's most actively traded issues: info USA (Nasdaq: IUSA), Jabil Circuit (NYSE: JBL), Manugistics (Nasdaq: MANU) and Solectron (NYSE: SLR).

The Nasdaq fell on Monday, slipping 28.75 to 2,624.52 while the Dow Jones industrial average posted a triple-digit gain, rising 210.46 to 10,645.42.

At the Bell

The Dow Jones industrial average is expected to open up 34 points. The Standard & Poor's 500 futures index gained 4.3 to 1350.80, slightly above fair value, at 7:21 a.m. EST in 24-hour electronic trading.

The Inter@ctive Week @Net Index dropped 17 to 316.56.


The major Asian markets were mixed. Hong Kong's Hang Seng jumped 163.51 to 15,188.04. The Nikkei 225 and Singapore's Strait Times both lost ground, falling 351.53 to 14,132.37 and 8.87 to 1,960.86, respectively.


European markets were in positive territory. London's FTSE 100 gained 38.8 to 6,285.30, the CAC 40 in Paris was up 72.57 to 5,960.06 and the DAX in Frankfurt rose 84.51 to 6,474.86 at 7:13 a.m. EST.

Reuters contributed to this report.