The stock market's rally wobbled a bit, but continued after the

Federal Reserve announced its intention to leave interest rates unchanged at 6.5%, a move that surprised almost nobody.

In its

statement, the Fed said "the Committee believes the risks continue to be weighted mainly toward conditions that may generate heightened inflation pressures in the future," acknowledging tight labor markets and rising energy prices. This was the third meeting in a row in which the Fed left rates unchanged.

The equity market dipped a bit on this news - the

Dow Jones Industrial Average had been up about 147 points prior to the release, while the

Nasdaq Composite Index was up about 48 points.

Analysts were split as to whether the Federal Reserve would acknowledge that the current risks in the economy were balanced, or tilted toward higher inflation. But Dallas Fed President

Bob McTeer

, generally thought of as the Fed official most in favor of a less restrictive policy, commented recently that the risks were still tilted toward higher inflation.

Despite this advance warning, the market dipped a bit; such as it is with the forever-optimistic stock market, constantly awaiting the next time the Federal Reserve will slice interest rates.

The Dow was rising on the back of broad strength in a number of its components, but the most strength can be had from

3M

(MMM) - Get Report

, lately up 3.1% to $91.50, and

United Technologies

, up 5.5% to $72.06.

The Nasdaq was seeing buying interest, notably in big-cap technology names like

Cisco

(CSCO) - Get Report

, gaining 6.7% to $59.25, and

Intel

(INTC) - Get Report

, up 5.6% to $42.38.

It appears the market is getting a bit of a lift from

Goldman Sachs'

chief market strategist Abby Joseph Cohen, who said earlier today that technology stocks are poised for a comeback. However, Cohen's been beating that drum steadily for a number of months. So her reiteration of earlier comments doesn't quite carry the heft of her other market moving calls in the last few years.

The day's big gainers include technology bellwethers like

Micron Technology

(MU) - Get Report

, up 9.4% to $46.38% after the

Semiconductor Industry Association

said worldwide sales of semiconductors grew 53% to record levels in August.

That chip sales were strong in August was not in question; it's September people are concerned about, after Intel warned of a slowing revenues. Micron is expected to report earnings tomorrow.

Fiber optics and telecommunications equipment stocks were rebounding from yesterday's decline, including

SDL

(SDLI)

, gaining 6.3% to $311.25.

From the "serves 'em right" department, the wise guys at

DSET

(DSET)

, a telecommunications company, snuck out a third quarter earnings warning between 1 a.m. and 2 a.m. this morning. Investors still noticed -- the stock was slammed, dropping $14 to $5.94, a 70.2% decline.

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Sector Watch

Commodity-related indices were having a ball of it today. The

S&P Chemical Index

gained 5.3% and the

Philadelphia Forest & Paper Products Index

rose 5.2%.

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Treasuries were slightly lower after the

Federal Open Market Committee's decision on interest rates. Today's decision was no surprise. The benchmark 10-year

Treasury note lately was down 7/32 to 99 6/32, yielding 5.859%.

Today's economic data were more or less in line with expectations.

New home sales

(

definition |

chart |

source

) fell 3.0% to 893,000, while the

index of leading economic indicators

(

definition |

chart |

source

) fell 0.1%, its fifth consecutive negative or unchanged reading.

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