Stocks moved higher on Wall Street today as the Federal Reserve issued a widely expected interest rate rise and investors welcomed the prospect of a merger in the software industry.

Telephone company Sprint Corp is in advanced negotiations to buy Nextel Communications for more than $36 billion in a mostly stock deal that would create the No 3 US wireless telephone company, sources familiar with the situation said yesterday.

Shares prices were lower in early trade on a raft of lower revenue guidance from companies including Wal-Mart and Sprint Corp, with weak economic data and the threat of a conflict with Iraq further shaking investor confidence, dealers said.