Stocks rose sharply today after the Federal Reserve left interest rates unchanged and suggested there may be no need to raise rates in the coming months.
At 3 p.m., the Dow Jones industrial average was up 55.66 at 11,199.93. The Fed's decision propelled the Dow out of a modest slump that began Monday and lasted throughout the morning. The Standard & Poor's 500 index was up 13.66 at 1,431.75, and the Nasdaq composite index rose 91.74 to 3,875.61.
Stock investors were mildly surprised by the Fed's announcement, which followed the Open Market Committee's last meeting of 1999. Most economists believed the Fed would push aside concerns that the economy is growing too quickly and leave short-term interest rates unchanged until some time in 2000.
But many investors expected the Fed to adopt a tightening bias, which would signal a willingness to raise rates at some point in the future.
Bond prices, which are generally more sensitive to inflationary pressures, received only a fleeting boost from the Fed's announcement. The yield on the 30-year Treasury bond dipped as low as 6.39 percent, then bobbed back to 6.45 from 6.44 percent late Monday.
The yield on the long bond is near its highest level since October 1997.
Beyond the interest-rate debate, technology stocks once again led the market. Doubleclick, a Web advertising company, rose 12 1 1/1 6 to 214 1/1 6 after announcing it will split its stock 2 for 1.
CMGI shot up 23 1/2 to 245 1 1/1 6 after Merrill Lynch analyst Henry Blodget launched coverage of the company and said its shares should reach 300 within 12 to 18 months.
Juno Online Services rose for a second consecutive session after announcing it would launch a free Internet access service. Juno shares rose 77 percent Monday, and gained more than 100 percent today, rising 36 1/2 to 65 1/2 .
Qualcomm rose 22 7/1 6 to 489 1/2 , as fund managers bought stocks that have gained the most this year before reporting results to investors. Qualcomm, up 1760 percent year to date and the best-performing stock in the Standard & Poor's 500 Index, was also boosted by optimism that Motorola Inc. or Nokia Oyj will buy its wireless-phone unit, helping to boost earnings.