Stocks rise amid hopes for Fed boost

Gymboree agrees to a $1.8 billion buyout. LDK Solar's shares rally on a sunny sales forecast. The Fed's policymaking arm will release minutes from its most recent meeting on Tuesday.

By TheStreet Staff Oct 11, 2010 7:59AM

TheStreetBy Melinda Peer, TheStreet

 

Updated at 1:35 p.m. ET

 

Stocks were rising Monday as investors pondered whether the Federal Reserve will take steps to boost the economy and anticipated key earnings reports later this week.

 

At 1:35 p.m. ET, the Dow Jones Industrial Average ($INDU) was up 11 points, or 0.1%, at 11,017. The S&P 500 ($INX) was up by 1.8 points, or 0.2%, at 1,167. The Nasdaq ($COMPX) was rising by 9.3 points, or 0.4%, to 2,411.

  

JPMorgan (JPM) was leading the Dow, rising 1.3% to $39.82.  The company will report third-quarter results Wednesday. Google (GOOG) and General Electric (GE) will also report quarterly results this week. 3M (MMM) and Home Depot (HD) were among the benchmark's laggards.

 

With no economic reports scheduled for today, traders are anticipating Tuesday's release of the minutes from the Federal Open Market Committee's September meeting. Investors will look for signs that quantitative easing measures might be coming.

 

"It's a low probability of a 'shock and awe' announcement because of the hawks' resistance. This approach requires a bigger balance sheet, leaving the Fed with less flexibility in a scenario where the economic data improve and/or the dollar reacts negatively to the news," a group of Deutsche Bank (DB) analysts said in a research note. "The more likely scenario, we think, is buy-as-you-go, a more targeted approach."

 

On Friday, the Dow closed above 11,000 for the first time since May 3. Stocks jumped after a disappointing September jobs report stoked speculation that the Federal Reserve will take steps to boost the economy.

In company news, Gymboree (GYMB) shares were climbing 23% to $64.99 after Bain Capital agreed to buy the children's clothing retailer for $1.8 billion.  

 

Morgan Stanley (MS) is leading an initial public offering for online video-content company Hulu. The prospectus is expected to be filed with the Securities and Exchange Commission.

 

Microsoft (MSFT) is introducing a line of phones that will run its Windows 7 operating system. The shares were up 0.2% to $24.62.

 

LDK Solar (LDK) raised its third-quarter sales forecast to a range of $610 million to $640 million and said it expects to ship 550 to 570 megawatts of wafers. LDK shares were rising 8.7% to $10.65.

 

Chesapeake Energy (CHK) shares were up 2.4% to $23.61 after China's CNOOC (CEO) said it would buy a one-third interest in oil and gas fields in South Texas that Chesapeake leases. CNOOC's American depositary receipts were adding 2.4% at $214.63.

 

Shares of BP (BP) were losing 1.3% to $41.36 after the stock was downgraded to "hold" from "buy" at RBS, while shares of EMC (EMC) were gaining 2.1% to $20.28 on a Deutsche Bank (DB) upgrade to "buy" from "hold."

 

Hong Kong's Hang Seng jumped 1.2%. Japan's Nikkei was closed for a holiday. The FTSE in London and the DAX in Frankfurt were rising 0.3%.

 

An International Monetary Fund meeting over the weekend failed to yield a solution regarding how to handle global currency discrepancies.

 

The dollar was gaining value against a basket of currencies, with the dollar index up by 0.2%. U.S. bond markets are closed for the Columbus Day holiday.

 

Crude oil for November delivery was shedding 27 cents at $82.42 a barrel. The December gold contract was gaining $8.60 to $1,353.90 an ounce.

 

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