Monday's mid-afternoon trade: rate-cut hopes, commodity shares lift Wall Street

US stocks gained on Monday, on speculation the Federal Reserve will cut rates this week and as investors snapped up energy and material shares as commodities prices soared.
Wall Street widely expects the Fed to cut its benchmark fed funds rate by 0.25 percentage point to 4.5 percent as insurance against the risk that shocks from declining house prices and higher borrowing costs could tip the economy into recession.
The Fed's decision is expected on Wednesday afternoon at the end of a two-day meeting. Shares of Exxon Mobil and other energy companies led the Dow higher after US crude futures set a record above $93. Materials companies also surged, with aluminium producer Alcoa rising 2.5 percent to $40.33. A mining sector take-over in Europe added to demand for commodity shares.
"People are anticipating Wednesday's rate cut, and there is speculation that the Fed might cut by 50 basis points. The 25-basis-point cut is pretty much baked in," said Ryan Detrick, senior technical strategist, at Schaeffer's Investment Research in Cincinnati.
"The metals and the steel stocks are again defying gravity, as commodities shares rise and on some overseas merger news. Oil stocks also continue to lead the way higher." The Dow Jones industrial average was up 48.85 points, or 0.35 percent, at 13,855.55. The Standard & Poor's 500 Index was up 4.20 points, or 0.27 percent, at 1,539.48. The Nasdaq Composite Index was up 8.18 points, or 0.29 percent, at 2,812.37.
In earnings news, consumer electronics chain RadioShack said it swung to a quarterly profit from a loss a year ago. RadioShack's shares rose 6.5 percent to $20.89 on the New York Stock Exchange.
Dell Inc's shares rose 2 percent to $29.57 and ranked among the Nasdaq's biggest advancers after Goldman Sachs added the computer maker's stock to its "conviction buy" list.
Shares of Merrill Lynch & Co Inc rose nearly 2 percent to $67.42 as investors awaited word on the fate of the investment bank's chairman and chief executive, Stan O'Neal. News reports have said Merrill's board was likely to force O'Neal's departure, possibly as early as Monday. Exxon shares were up 1.8 percent at $93.87 on the NYSE. Chevron stock gained 1.7 percent to $93.25. The oil index rose 1 percent.