Midday Report: Techs Send Nasdaq Higher as Fed Meets

Technology stocks drifted higher Tuesday, sending the Nasdaq Composite Indexup 0.3 percent by midday, as investors awaited an afternoon announcement oninterest rates from the U.S. Federal Reserve.

The Fed’s policy-setting Open Market Committee is meeting in Washington, D.C. todiscuss interest rates and the economy. Economists and investors expect theFed to announce a half-point cut in the key interest rate to 4 percent, thelowest in seven years, to help the economy get moving again.

Investors will also be watching the Fed’s announcement for clues about the direction of rates in the monthsahead. The Fed has guided rates lower four times so far this year amid signs ofeconomic weakness. Some recent data — including figures on retail sales andconsumer sentiment — show that the rate cuts may have provided the neededboost.

With signs of strong consumer spending, some say the Fed may chooseto leave rates alone after today’s expected cut.

Trading Light

Overall, stocks traded at mixed levels ahead of the Fedannouncement. The Nasdaq Composite Index was up 6.90 at 2,088.82, led by Cisco Systems (Nasdaq: CSCO), which gained 37 U.S. cents to reach $18.94.

Others on the Nasdaq most-active listincluded Oracle (Nasdaq: ORCL), up 16 cents at $16.20, and Intel (Nasdaq:INTC), down 34 cents at $27.07.

The Dow Jones Industrial Average was down 22.97 at 10,854.36,and the Standard & Poor’s 500 stock index was down 1.06 at 1,247.86.

E-Commerce Bump

The E-Commerce TimesIndex was up 2.3 percent at midday, with 13 of the 15 member stockshigher.

Travelocity (Nasdaq: TVLY) was up $1.11 at $30.12, while real estate network Homestore.com (Nasdaq: HOMS) was up 66 cents at $29.35.

Internet brokerage firm E*Trade (NYSE: ET) was ahead 13 cents at $8.88.

Computer Sciences Falls

Computer Sciences Corporation (NYSE: CSC) was down $1.89 at $35.71 after reportingquarterly results that matched its lowered expectations. The company, whichprovides information technology consulting and systems integration services,said results were hurt by a weak economy.

Companies like Computer Sciences could benefit if interest rates continue tohead lower, however, because borrowing costs for companies would become cheaper, leadingmany to boost their technology spending.

Lucent Gets a Boost

Lucent Technologies (NYSE: LU), meanwhile, rose 8 cents to $9.79, followingnews of a pair of equipment contracts. Lucent said that in a “multimillion-dollar” agreement, Global Crossinghas signed on as the first customer for Lucent’s WaveStar LambdaRouter communications switch.

Reports also said Lucent was among companies sharing in a $1.5 billionequipment purchase from China Unicom, which is building a mobilecommunications network. Other companies reportedly participating includeEricsson (Nasdaq: ERICY), down 18 cents at $6.08, and Motorola (NYSE: MOT), down 74cents at $15.

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