Dow rises 34
as market waits for Fed

NEW YORK -- Stocks rose modestly today in cautious trading before tomorrow's pivotal Federal Reserve meeting on inflation and interest rate policy.

The Dow Jones industrial average gained 34.21 points to close at 7,228.88, after recovering steadily from a 22-point morning deficit.

Most broad-market indicators also turned high after struggling in the morning.

Advancers led decliners by nearly a 4-to-3 margin on the New York Stock Exchange, with 1,404 up, 1,072 down and 871 unchanged. NYSE volume totaled 345.13 million shares vs. 485.78 million Friday.

The Standard & Poor's 500-stock list rose 3.52 to 833.27, and the NYSE composite index climbed 1.70 to 434.14. The Nasdaq index rose 0.50 to 1,341.23, and the American Stock Exchange composite gained 0.76 to 587.48.

Trading was predictably quiet, with few investors making big bets in advance of tomorrow's Federal Reserve strategy meeting.

In afternoon trading, the price of the Treasury's main 30-year bond was up 1/32 point, or 32.25 cents per $1,000 in face value, while its yield held steady at 6.90 percent, the same as late Friday. Prices and yields move in opposite directions.

On Friday, stocks pulled back sharply, slicing nearly 140 points off the Dow, as some surprisingly robust economic readings forced investors to reconsider their recent optimism that the Fed won't boost the central bank's lending rates to ease inflationary pressures. In late March, Fed policymakers moved to slow consumer demand by raising a key short-term lending rate.

The rate hike spurred a sharp selloff in the markets amid fears the Fed might act even more aggressively, hurting company profits. But stocks and bonds quickly rebounded amid a stream of economic data suggesting the economy's vigorous pace may be slowing enough to control inflationary pressures without the Fed's intervention.