NEW YORK – Stocks climbed on Monday, led by technology stocks, as Wall Street looked for another Federal Reserve interest-rate cut to spur a rebound in corporate earnings and jump-start the sluggish economy.
The Nasdaq composite finished at a level unseen since Aug. 31 with a gain of 47.92 points, or 2.74 percent, to end at 1,793.65. The Dow Jones industrial average climbed 117.49 points, or 1.26 percent, to 9,441.03. The Standard & Poor's 500 rose 15.64 points, or 1.44 percent, to 1,102.84.
"You have a bit of a confluence of potentially positive events," said Rick Meckler, president of investment firm LibertyView, which oversees $1 billion, referring to the Fed meeting and Cisco's results. "The market has decided the Fed is on its side, and I think every step they take, the ultimate spin has always been positive."
The Federal Reserve is widely expected to cut interest rates for a 10th time this year at its meeting on Tuesday, to help jump-start the lagging economy. Lower interest rates cut borrowing costs and can spur business development.
Equities got an additional boost from the Treasury's decision last week to stop selling 30-year bonds, sending cash flowing out of bonds and into stocks, traders said.
The technology sector led the drive higher amid hopes for a solid report from bellwether Cisco. The No. 1 maker of gear that powers the Internet after the close reported operating earnings fell about 75 percent, but the results still beat Wall Street expectations.
``People seem to be optimistic about the Cisco earnings coming out tonight, meaning they're hoping they'll hit the number and don't lower guidance again,'' said John Forelli, portfolio manager at Independence Investment LLC. ``If you get ... the status quo, I think that's good news.''
Cisco rose 64 cents to $17.90 in the regular session, and traded at $18.50 after its results. Cisco rival Juniper Networks rose $3.10 to $22.58, while network computer maker Sun rose 62 cents to $12.06.
Data storage company EMC Corp. made strong gains as bargain-hunting investors bet that it is in a position to return to growth when the economy recovers, taking their cues from a story in influential business weekly Barron's on Sunday, analysts said. EMC jumped $1.41 to $14.50.
Baxter International Inc. tumbled $2.67 to $46.33 after it said a processing fluid used to make filters to treat kidney dialysis patients may have played a role in the deaths of at least 51 people. Baxter plans to permanently discontinue the product and will take a charge of up to $150 million to cover costs related to the cancellation.
The U.S. Treasury's unexpected decision last week to end sales of 30-year bonds underpinned the market, analysts said, since it helps lower long-term borrowing costs and benefits the housing sector by keeping mortgage costs down.
In a Reuters poll on Friday, 15 of the 24 dealers of U.S. securities surveyed said the Fed will reduce the fed funds rate -- a benchmark for short-term rates -- to 2 percent. The remaining nine predicted a smaller quarter-point cut.
The policy-making committees of the Bank of England and the European Central Bank also hold meetings this week.
Grim economic news came from the National Association of Purchasing Management on Monday, which reported its gauge of services-sector activity plunged to 40.6 in October, cementing fears the economy fell even deeper into recession following the assaults on New York and Washington.
Microsoft Corp. was still in focus after the software giant and the U.S. Justice Department reached a settlement agreement last week. Its stock rose $1.87 to $63.27.
Divisions emerged among the state attorneys general, however, with some key states drawing closer to signing on to a settlement struck with the U.S. Justice Department and others remaining strongly opposed, sources said.
Embattled energy trader Enron Corp. fell 10 cents to $11.17 after Fitch cut its debt ratings and warned it may cut them again if the company does not reduce its debt.
One soft spot was the oil sector, as crude oil prices continued their dizzying six-week fall despite signs from the OPEC exporting cartel that they would make deeper cuts in supply to meet shrinking demand.
Oil services giant Exxon Mobil fell 37 cents to $39.39. The S&P oil index fell 0.4 percent, and the American Stock Exchange's oil index ticked up just 0.1 percent.
Advancing issues led decliners nearly 2 to 1 on the New York Stock Exchange. Volume came to 1.18 billion issues, compared with 1.12 billion Friday.
The Russell 2000 index, which gauges the performance of smaller company stocks, rose 4.47 to 437.54.
Stocks were higher overseas, too. Japan's Nikkei stock average advanced 0.6 percent. In Europe, Germany's DAX index gained 3.8 percent, Britain's FT-SE 100 climbed 1.6 percent, and France's CAC-40 rose 2.7 percent.
Reuters and the Associated Press contributed to this report.
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