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Wednesday October 28 1:18 PM EDT
U.S. Stocks Rally On Buying By Mutual Funds
By Jennifer Westhoven
NEW YORK (Reuters) - Stocks moved higher Wednesday as mutual fund managers plowed money back into the market before the end of the month on hopes that Brazil was not on the verge of a currency collapse.
Around 1 p.m. EST, the Dow Jones industrial average was up 45.83 points at 8,411.87.
But in the broader market, declines led advances by a small margin on active volume of 373 million shares on the New York Stock Exchange.
The technology-heavy Nasdaq composite index was up 15.15 points at 1,732.78.
The rally was propelled by gains in well-known technology stocks that have been strong performers this year, such as Dell Computer Corp. (Nasdaq:DELL - news), Intel Corp. (Nasdaq:INTC - news) and Microsoft Corp. (Nasdaq:MSFT - news)
Analysts said the market mood had calmed after Brazil unveiled a fiscal plan and repeated that it will not change its foreign exchange policy, stifling talk that it might allow the Brazilian real to fall against the dollar.
''We got word of the Brazilian package and it was in line with expectations,'' said Scott Bleier, chief market strategist at Prime Charter Ltd.
Also boosting stocks was end-of-the-month buying by mutual fund managers, analysts said.
''The path of least resistance is still up for the rest of this month, at least,'' said Bleier.
But analysts were cautious about whether the gains had any staying power, noting that despite the positive performance of the stock averages, small-name stocks, which have been big gainers recently, were trading lower.
The small-cap Russell 2000 Index was down 1.08 points at 370.42.
Dell was up two at 64-1/2 in heavy Nasdaq trading, Microsoft rose 1-1/16 to 106-1/2, Intel rose 1-14/15 to 89-3/16 and Cisco Systems Inc. (Nasdaq:CSCO - news) added 2-1/8 to 62-7/8.
Earnings continued to flood the market.
America Online Inc. (NYSE:AOL - news) was up 1-5/8 to 121-5/8 after it posted quarterly earnings that beat Wall Street expectations.
Intermedia Communications Inc. (Nasdaq:ICIX - news) was slammed, falling 8-1/8 or 32 percent, to 17-1/8 on a larger-than-expected loss.
Interstate/Johnson Lane Inc. (NYSE:IJL - news) dropped, losing 6-5/16 to 30-3/4 after it agreed to merge with Wachovia Corp. (NYSE:WB - news), the nation's 18th largest bank. Wachovia rose 2-11/16 to 85-11/16
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