Wall Street end higher ahead of Fed meeting
(AP)Updated: 2007-01-30 08:57
NEW YORK - Stocks barely budged Monday, ending narrowly mixed after yields on the 30-year Treasury note briefly hit 5 percent and investors grew skittish a day ahead of the Federal Reserve's first meeting of the year.
After a volatile week in which stocks lost ground, merger and acquisition news gave a boost to stocks for much of the session before the 30-year yield moved higher. Merrill Lynch & Co. agreed to acquire wealth manager First Republic Bank for $1.8 billion in cash and stock and Citigroup Inc. struck an agreement to buy British insurer Prudential PLC's Egg Banking PLC online bank for about $1.13 billion.
Many on Wall Street were girding for a busy week of economic and earnings news as they tried to determine whether an indecisive market can resume its advance from the second half of 2006. A two-day Fed meeting begins Tuesday, after which investors will receive the central bank's latest read on the economy and interest rates, and a torrent of fourth-quarter earnings reports is due. The Fed has left short-term interest rates unchanged at its last four meetings.
"The market really can't find any direction," said Todd Leone, managing director of equity trading at Cowen & Co., describing recent sessions as "rudderless" ahead of the Fed meeting. He said investors appeared unnerved after the yields on the 30-year Treasury note moved higher.
The Dow Jones industrial average rose 3.76, or 0.03 percent, to 12,490.78.
Broader stock indicators were mixed. The Standard & Poor's 500 index was down 1.56, or 0.11 percent, at 1,420.62, and the Nasdaq composite index was up 5.60, or 0.23 percent, at 2,441.09.
Yields on the 30-year Treasury note hit 5 percent and then slipped back as
investors wrestled with questions over the direction of interest rates. The Fed
sets short-term interest rates — the rates banks charge each other for overnight
loans — but the central bank's pronouncements can affect all interest rates.
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