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Stocks Modestly Higher in Thin Trading

The market is awaiting the end of the FOMC meeting.

Jamie Farr: "The sun. Godot. A girl like you." $20,000 Pyramid contestant: "Pass." Dick Clark (to contestant): "How about, the outcome of the Federal Open Market Committee meeting?" Contestant: "Things that you wait for?" Farr (to contestant): "Duh. I'm sorry, that was so obvious.


Although traders are again mainly biding their time ahead of the expected 2:15 p.m. EDT report of the results of the FOMC meeting, a solidly positive tenor of trading has developed this morning. Much of whatever optimism that exited this morning in stocks was credited to the bond market's gain.

The price of the 30-year Treasury bond was lately up 15/32 to 91 14/32, its yield falling to 5.86%. Given the fixed-income market is more directly impacted by the

Fed 's

decree today -- whatever that may be -- equity traders were taking solace in the bond's positivism.


Dow Jones Industrial Average

was lately up 62 to 10,915, thanks as well to a huge boost from




H-P was up 7% after last night reporting second-quarter earnings of 88 cents a share, 8 cents ahead of expectations and up 34% from the prior year. Additionally, and perhaps more importantly, executives of the PC giant made bullish comments in the aftermath of the earnings report, as

reported in a

story last night.


Morgan Stanley Dean Witter

upped its price target on H-P while

Merrill Lynch


Credit Suisse First Boston

separately raised earnings estimates.

"H-P finally had a quarter where revenue, expenses, and orders lined up positively. Momentum is building," Merrill analyst Steve Milunovich wrote in a research note this morning. "Revenue growth of 3% wasn't terrific, but order growth of 10% was impressive. We are raising our EPS estimates by a nickel to $3.50 in

fiscal year 1999 and by a dime to $4.00 in

fiscal 2000."

Looking ahead to an expected announcement today by H-P about its e-service business, Milunovich wrote: "Putting meat on the Internet strategy bones is needed to take the story to the next level."

While H-P raced ahead and


(IBM) - Get International Business Machines (IBM) Report

was up as well, tech stocks in general were trading without much oomph. The

Nasdaq Composite Index

was up 4 to 2566 while Internet Sector

index was up fractionally at 642.


S&P 500

, however, was up 5 to 1344 enjoying a boost from retailers and financials along with the aforementioned tech giants.

Among retailers,



was up 7% after announcing plans to buy back up to $1 billion of its outstanding common stock. Also,

J.C. Penny

(JCP) - Get J. C. Penney Company, Inc. Report

was up 14% after posting first-quarter profits of 61 cents a share, down from 64 cents a year ago but well ahead of the 16-analyst estimate of 53 cents.


upped its rating on the retailer to buy from attractive. The

S&P Retailing Index

was up 2%.

Energy stocks were a big drag on the S&P 500, falling along with crude prices, lately down 52 cents to $17.42 a barrel. The

American Stock Exchange Oil & Gas Index

was down 1% while the

Philadelphia Stock Exchange Oil Service Index

was off 2%.

The Russell 2000 was up 2 to 443 as the majority of stocks were winners thus far, but the dominate feature of trading continues to be the absence of trading (volume, that is).


New York Stock Exchange

trading, advancers were leading declining stocks 1,460 to 1,214 on 260 million shares. In

Nasdaq Stock Market

TheStreet Recommends

activity, gainers were leading 1,773 to 1,556 on 334 million shares.

10:58 a.m.: Stocks Cling to Positive Bias

Despite its


jitters, the market kept up its firm tone through midmorning trading.

Volume, however, was incredible light. Though they probably won't get a chance to do a thing from 2:15 p.m. EDT, when the Fed meeting ends, to the close, traders had plenty of time to get up and stretch their legs.

"We're seeing some strength in tech issues and some weakness in oil services," said Jim Herrick, managing director of trading at

Robert W. Baird

. "But other than that, everybody is just waiting for what comes out of the Fed meeting."

And even that strength in tech, and that weakness in oil services, was pretty muted. The

Morgan Stanley High Tech 35

was up only 7 to 1052. The

Philadelphia Stock Exchange Oil Services Index

was down only 1 to 71.


Dow Jones Industrial Average

was up 73 to 10,926.


, up 6, or 7%, to 94 3/4, accounted for 41 of those Dow points. The

S&P 500

was up 4 to 1344 and the

Nasdaq Composite

was down fractionally at 2561. Internet Index

was down 6 to 635, and the

Russell 2000

was up 2 to 444.


Justin Lahart

9:54 a.m.: FOMC Meeting Puts Damper on Stock Trading

Major market indices were a touch higher as the market awaits the results of today's

Federal Open Market Committee


While the vast majority of analysts expect the Fed to leave short-term interest rates unchanged, there is uncertainty over whether or not the Fed will adopt a tightening bias.


Dow Jones Industrial Average

was up 30 to 10,884.


S&P 500

was up 1 to 1340. The

Nasdaq Composite Index

was up 3 to 2565. The

Russell 2000

was up 1 to 443. Internet Sector

index was down 3 to 638.

The 30-year Treasury bond was up 11/32 to 91 11/32, yielding 5.87%.

Most Up at Open -- NYSE

Charles Schwab (SCH) , up 2 13/16 to 116 3/4

: Schwab said it will go ahead with its 2-for-1 stock split after obtaining approval from shareholders.

Most Up at Open -- Nasdaq

Varlen (VRLN) , up 9 5/16 to 35 1/4

: Privately held

Amsted Industries

, a rail, truck and auto parts maker, launched a hostile bid for Varlen.

Most Down at Open -- NYSE

Royal Dutch Petroleum (RD) , down 1 7/16 to 55


Most Down at Open -- Nasdaq

Com21 (CMTO) , down 5 3/16 to 25 1/16



Brian Louis