Dow up, but fears remain

THE Dow industrials headed towards a third day of gains yesterday afternoon on strength in aerospace and consumer companies, but worries about the day's congressional elections and an expected Federal Reserve interest rate cut today kept the broader market skittish.

Around 1.30 pm ET, the Dow Jones industrial average, up 37.11 to 8608.71, maintained modest gains, while the Nasdaq composite, down 13.82 to 1382.72, and the Standard & Poor's 500 index, down 0.42 to 907.93, were a little weaker. Stocks had traded on both sides of breakeven throughout the morning. “I think the market is holding up fine, with expectations that the Federal Reserve will ease,” said John Davidson, president and CEO of Partners ReAsset Management. “That expectation may be giving a boost right now. If they end up doing nothing tomorrow, we may see some selling.”

The Fed is widely expected to cut interest rates when its policy-makers meet today. Fed funds futures are currently pricing in a quarter-point cut, which would bring the Fed's target for its key overnight bank lending rate to 1.5%.