Investors Lie Low as Fed Due to Talk Strategy

Stocks ended mixed but mostly lower Monday as cautious investors moved aside ahead of the Federal Reserve’s first strategy meeting of 1999, which starts today.

In other markets, the dollar continued its rise against the euro, while the 30-year Treasury bond yield jumped on continued strong economic data.

Latin American markets rallied as Brazil’s currency rebounded.

On Wall Street, the Dow Jones industrial average closed down 13.13 points at 9,345.70, after trading as high as 9,430.

In the broad market, declining issues led advances 1,665 to 1,386 on moderate volume of 799 million shares on the New York Stock Exchange.

The technology-laced Nasdaq composite index inched up 4.20 points to close at 2,510.09, its third consecutive record high--despite a drubbing for many highflying Internet stocks.

Despite expectations that the Fed won’t make any change in interest rates at this meeting, “People are a little leery every time the Fed meets,” said Ken Ducey, an analyst for BT Brokerage.

There was more evidence Monday that the economy was still in good shape. The nation’s manufacturers said their business in January picked up from December’s pace as a export orders improved.

The bond market viewed Monday’s data bearishly, betting that interest rates may rise sooner than later. The benchmark 30-year T-bond yield jumped to 5.18% from 5.08% on Friday, the biggest move in almost three months.

In currency trading, the dollar rose again versus the euro, still riding high on hopes for the U.S. economy’s brisk expansion while the outlook for growth in Europe begins to wilt. It took just $1.13 to buy one euro on Monday, down from $1.134 on Friday.

But the dollar fell sharply against the Japanese yen, closing at 115.08 yen, down 1.35.

In foreign trading, Brazil’s battered currency regained about 10% of its value Monday as panic eased over possible shock measures to the economy in the real’s first major rebound since last month’s devaluation crisis. The real closed at 1.91 to the dollar, up from 2.10 on Friday.

That helped send Brazil’s main stock index up 8.8% and Argentina’s key index up 5.5%. Mexico’s market rose 1.8%.

Among Monday’s highlights:

* Some major tech stocks continued to rise, with Hewlett-Packard up $3.56 to $81.94 after Merrill Lynch raised its near-term rating on the stock to “accumulate” from “neutral,” saying 1999 earnings could rise 16%. Also, Dell Computer surged $8 to a record $108.

But many Internet stocks were lower, with Yahoo down $18.69 to $335.56, Ubid tumbling $10.94 to $70.56 and Inktomi down $6.38 to $65.50.

* Internet-related brokerages, however, were up sharply on optimism about online trading’s future. Ameritrade soared $24.75 to close at $105 and E-Trade jumped $7.25 to $62.44. Smaller firms also were caught up in gains, with J.B. Oxford leaping $2.97 to $5.56.

* General Motors jumped $3.63 to close at $93.38 on rising optimism about this year’s earnings.

* Aetna tumbled $3.88 to $86.25 after it reported earnings, and after President Clinton unveiled a federal budget plan that would raise taxes on deferred profit of Aetna’s life insurance business, along with those of other insurers.

Market Roundup, C12