Late Rally Boosts Dow Jones To 100-Point Gain

The Dow Jones industrial average rose by 100 points Monday, wiping out more than half the losses that piled up during two weeks of guessing that the Federal Reserve would raise interest rates Tuesday.

The Dow swung from a 21-point deficit to a gain of 100.46, closing at 6,905.25. It was the best showing in seven sessions for the blue-chip barometer, which retreated nearly 2 percent last week.

Broader stock measures finished mixed on Monday, but most were little changed for much of the session as investors braced for Tuesday’s key strategy meeting at the Fed. An afternoon rally in the bond market quickly changed the day’s hesitant tone, however.

As bond prices rose, the yield on the 30-year Treasury bond fell to 6.92 percent, spurring some buying interest in the stock market.

Concerns about inflation, which makes fixedincome investments less attractive, had pushed the long-bond yield above 7 percent several times last week. Although inflation has remained fairly tame, many observers believe the central bank will nudge interest rates higher to slow the economy.

Some of the stocks that moved substantially or traded heavily Monday:

NYSE

Kennametal, down 4-3/4 at 36-1/4.

The maker of metalworking tools expects to report disappointing results for its third quarter ending March 30. Kennametal, based in Latrobe, Pa., blamed the disappointing forecast on continued weak sales in Germany.

Champion Enterprises, down 3-3/8 at 14-3/4.

The maker of manufactured housing expects to report first-quarter earnings below analyst forecasts.

NASDAQ

Microsoft, down 3-7/8 at 90-1/8.

Dell Computer, down 3/4 at 65.

The encore to the popular Windows 95 operating system may hit the market after the Christmas selling season, later than many analysts expected. Microsoft has begun telling personal-computer makers that they won’t get the software in time to load it on machines for holiday sales.

MDL Information Systems, up 14 at 31-1/4.

Reed Elsevier, the Anglo-Dutch publishing giant, agreed to buy MDL for $32 a share, or about $320 million, in cash. MDL provides software and database services that help drug and chemical companies access scientific information.

AMEX

Thermo Cardiosystems, down 2-5/8 at 21-1/8.

The maker of implantable ventricular-assistance systems expects to see sales remain similar to year-ago levels until the FDA grants commercial approval for its Heartmate product. Thermo Cardiosystems said it recently delivered the majority of the data required by the FDA for commercial consideration.