Fed Decision Fuels Dow’s Surge

Stocks jumped back toward record levels Tuesday, led by technology and financial shares, after the inflation-leery Federal Reserve decided not to slow the economy with higher interest rates.

The Dow Jones industrial average erased a 76-point morning deficit and rose 74.58 to 7,303.46, about 30 points shy of its all-time high set last Thursday.

Broader market measures also turned higher after Tuesday’s anxiously awaited Fed meeting produced no change in monetary policy.

The debate over whether the economy’s vigorous pace was easing enough to keep inflationary pressures in check had raged since late March, when Fed officials boosted one of the central bank’s key short-term lending rates for the first time in two years, spurring a steep market sell-off.

“They decided that there was no urgency at this point to raise rates, but I don’t think it settles the question,” said Douglas Porter, senior economist at Nesbitt Burns Securities of Chicago.

Advancing issues outnumbered decliners by a 4-to-3 margin on the New York Stock Exchange, where volume was a modest 447.17 million shares as of 4 p.m., up from Monday’s 345.14 million, which was the lowest tally of the year.

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

NYSE

Ford Motor, up 1-1/8 at 37-1/2.

Merrill Lynch reinstated coverage of the No. 2 automaker with an “intermediate-term accumulate rating” and a “long-term neutral rating,” the Dow Jones News Service reported.

The Home Depot, up 1 at 60-3/4.

The Atlanta-based home improvement chain reported a 33 percent improvement in profits for its first quarter ended May 4.

Dayton-Hudson, up 2 at 49.

The Minneapolis-based retailer’s first-quarter earnings more than doubled, beating Wall Street forecasts.

NASDAQ

Ticketmaster Group, up 1-3/4 at 14-1/2.

Home Shopping Network parent HSN agreed to buy a 47.5 percent stake in Ticketmaster from Microsoft co-founder Paul Allen for HSN stock valued at $209 million.

Frontier Airlines, up 21/32 at 3-11/16.

The low-fare carrier is discussing a merger with Western Pacific airlines, according to reports in the Colorado Springs Gazette and Commercial Aviation Report, an industry newsletter. The board of Western Pacific airlines is scheduled to meet today.