Midday Report: Nasdaq Up Ahead of Greenspan Announcement

Nasdaq stocks drifted in a narrow range at slightly higher levels Tuesday, ahead of an expected afternoon announcement on interest rates from the U.S. Federal Reserve.

At midday, the Nasdaq Composite Index was up 15.87 at 1,967.05. The Dow Jones Industrial Average was up 47.18 at 10,006.29, and the Standard & Poor's 500 stock index was up 8.32 at 1,179.13.

Federal Reserve policymakers are meeting in Washington Tuesday afternoon to decide what kind of interest-rate move would best revive the economy. A lowering of at least 50 basis points in the central bank's target overnight lending rate is widely expected, with some Fed watchers looking for a 75 basis-point cut.

The meeting ends at 2:15 p.m. EST, and is likely to be followed by a public announcement of the Fed's decision.

Lower interest rates would, at least in theory, make it easier for companies to finance investment, leading to better profits for technology firms, which are suffering as a slowing economy stalls demand for their products.

A series of rate cuts earlier this year, however, has so far done little to bolster corporate profits.

Warnings Mount

Meanwhile, profit warnings from technology companies continue to trickle in. Solectron (NYSE: SLR), a contract manufacturer of electronics, was down US$2.12 at $19.37 after lowering its outlook for the year and announcing a plan to cut 10 percent of its workforce.

Likewise, Three-Five Systems (NYSE: TFS) was down $3.05 at $12.60 after saying results for the quarter ending this month will be worse than previously thought because of "weak and uncertain demand in the cellular handset industry." Three-Five designs and manufactures display modules and technology for cell phones and other wireless devices.

Amazon Up, eBay Down

The E-Commerce Times Index was down 0.05 percent at midday. Among index members, Amazon.com (Nasdaq: AMZN), Barnesandnoble.com (Nasdaq: BNBN) and Egghead.com (Nasdaq: EGGS) were higher, while Drugstore.com (Nasdaq: DSCM), Travelocity (Nasdaq: TVLY) and eBay (Nasdaq: EBAY) traded lower.

Amazon was bolstered by a report that it is in talks with electronics retailer Best Buy (Nasdaq: BBBY) about a possible e-commerce alliance. Officials at the companies declined to comment on the report.