Stocks rose Monday as investors welcomed a stronger-than-expected pending home sales report and prepared for Tuesday's expected interest-rate cut from the Federal Reserve (Fed). The Fed's policy committee is widely expected to reduce a key short-term lending rate by a quarter-percentage point, to 4.25 percent, after cutting interest rates at the last two meetings. Some analysts are seeking a cut of a half-percentage point, but such bets were diminished by last week's strong November jobs report. In economic news, investors welcomed the pending home sales index, which showed a rise of 0.6 percent, compared to forecasts that sales would fall 1 percent. Light sweet crude oil for January delivery fell 42 cents to settle at $87.86 a barrel on the New York Mercantile Exchange. In corporate news, UBS issued a profit warning, said it will write off about $10 billion related to the credit-market crisis, and will borrow about $11.5 billion from outside investors. Troubled bond issuer MBIA said Monday that it will receive a $1 billion investment from a private-equity firm. Its shares jumped 20 percent. The Dow Jones industrial average rose 101.45, or 0.7 percent, to 13,727.03. Twenty-one of the index's 30 components rose, led by McDonald's, which reported a sales jump for November. Other gainers included J.P. Morgan Caterpillar, Citigroup, General Motors, Boeing, and Alcoa. The broader Standard & Poor's 500 index rose 11.30, or 0.75 percent, to 1,515.96. The technology-heavy Nasdaq composite index rose 12.79, or 0.5 percent, to 2,718.95. The New York Stock Exchange composite index rose 80.84 to 10,104.42. The American Stock Exchange composite index rose 24.83 to 2,426.84. And the Russell 2000 index rose 5.68 to 791.20.
