- The Washington Times - Tuesday, November 6, 2001

NEW YORK (AP) Investors bet heavily yesterday that the Federal Reserve Board would lower interest rates again this week, and the anticipation of more help for the economy sent stocks spurting higher.
Wall Street also spent the day awaiting earnings from Cisco Systems and was not disappointed. The tech bellwether reported better-than-expected results after the market closed, pleasing investors eager for signs of a business recovery.
"Cisco is a high-profile stock and one that a lot of people own," said Todd Clark, co-head of trading at WR Hambrecht. "So its results are going to be viewed as an important indication of the state of the technology economy."
The Dow Jones Industrial Average closed up 117.49, or nearly 1.3 percent, at 9,441.03 its third straight winning session.
Broader stock indicators fared even better thanks to heavy technology buying. The Nasdaq Composite Index rose 47.92, or 2.7 percent, to 1,793.65, while the Standard & Poor's 500 index gained 15.64, or 1.4 percent, to 1,102.84. The Russell 2000 index rose 4.47 to 437.54.
Investors were optimistic that today's Fed meeting would bring the 10th interest-rate cut of the year. The Fed has been lowering rates since January in hopes of stimulating the economy, and the September 11 terrorist attacks have given the central bank new incentive to further relax its monetary policy.
With October consumer confidence at its lowest level in 71/2 years, many analysts now say the monetary stimulus provided by the Fed, in conjunction with any tax relief or other government packages, is key to an economic and business turnaround. Although there are no guarantees the Fed indeed will lower rates today, the hope on Wall Street is that the bank will feel compelled to act.
Cisco rose 97 cents to $18.87 in late trading, adding to a 64-cent regular session gain, after reporting first-quarter results that were 2 cents per share ahead of expectations. Revenues also were better than expected. In a conference call following its earnings announcement, Cisco management said second-quarter revenues would be flat to slightly higher than the first quarter, but gave few details.
Nonetheless, the news appeared to inspire more buying in tech stocks that already rallied in regular trading yesterday. Cisco rival Juniper Networks rose 62 cents to $23.20 in the late session, compounding a $3.10, or 15 percent, gain earlier in the day. Microsoft rose 55 cents to $63.82 in after-hours trading, following a $1.87, or 3 percent, advance earlier.
In regular trading in blue chips, Home Depot advanced $1.23 to $41.55, while General Motors gained $1.53, or 3.6 percent, to $43.78. Financial stocks, which benefit from interest rate cuts, also advanced.
"People are buying today with the expectation that it will be the second quarter of next year before the turnaround starts to take place," said Matt Brown, head of equity management at Wilmington Trust.

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