Timid buyers pick the market as Wall Street waits for an interest rate cut.
June 25, 2003: 10:15 AM EDT
NEW YORK (CNN/Money) - U.S. stock markets showed modest strength Wednesday morning but trading was subdued by caution ahead of the Federal Reserve's anticipated interest rate announcement in the afternoon.
At around 10:00 a.m. ET, the Dow Jones industrial average (up 42.64 to 9152.49, Charts), the Nasdaq composite (up 17.76 to 1623.37, Charts) and the S&P 500 index (up 6.63 to 990.08, Charts) all sported advances of a few points each, but trading volume was light as investors wondered not whether the Fed would cut, but by how much.
The central bank's announcement, due at around 2:15 p.m. ET, is widely expected to reveal a lower fed funds rate, the rate banks use for overnight loans to each other. The size of the cut, however, is where Wall Street is split. Some economists are betting on a quarter of a percentage point, while others are calling for a half and both sides are eager to find out what the Fed's accompanying statement will say about how the bank sees the economy.
Ahead of the announcement, investors took in a pre-market report on durable goods orders and the latest readings on housing about half an hour after trading started.
The government said durable goods orders fell 0.3 percent in May, from a revised 2.4 percent decline in April. Economists had expected a rise. New and existing home sales for May both showed strong growth, confirming that the booming housing market continues to hold up.
Breadth in the stock market was decidedly positive. Seven stocks rose on the New York Stock Exchange for every three that fell, with volume reaching 160 million shares. On the Nasdaq, where 219 million shares changed hands, six stocks advanced for every four that declined.
Bonds climbed on the back of the weak durable goods orders report, with the 10-year Treasury note yielding 3.22 percent as its price advanced 1/4 of a point. The dollar was slightly lower against the euro and the yen.
Stock markets in Europe were narrowly mixed. Asian markets also closed mixed overnight.
Light sweet crude oil on the NYMEX rose 25 cents to $29.03 a barrel. Gold rose $2.40 to $349.10, also on the NYMEX.
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