Raise Interest

The Federal Reserve's policy-makers voted yesterday to leave short-term interest rates unchanged, and the Fed suggested that it did not expect to alter that stance for some time. In a statement, the Fed said its Open-Market Committee voted unanimously to leave the benchmark federal funds rate on overnight loans between banks at 1.75 percent, the lowest in more than four decades. The central bank's decision was expected because of concerns about the strength of the economic recovery. Reaction to the news in financial markets was muted.

With new hope that the Federal Reserve won't raise interest rates next month, investors sent the Dow Jones industrial average soaring more than 235 points yesterday after the government reported that hourly wages and new jobs grew slower than expected in August.However, some economists believe high stock prices will still prompt the Fed to boost rates for the third time since June, as it continues its effort to curb inflation."I actually think that, were it not for the stock market, the Fed would probably be done raising rates for the year," said Kathleen Camilli, chief economist for Tucker Anthony in New York City.

Technology stocks were clobbered yesterday, but blue-chip companies rallied on the eve of an important Federal Reserve meeting at which the board is expected to raise interest rates for the first time in more than two years.The Dow Jones industrial average jumped 100.46 points to close at 6,905.25. The 30-stock index of large companies' stocks nearly regained the 130 points it lost last week amid fears that the Fed will boost interest rates today.Industry experts expect Federal Reserve Chairman Alan Greenspan to nudge short-term rates up by at least a quarter point -- from 5.25 percent to 5.5 percent -- to keep a lid on inflation and take some of the steam out of the stock market.

Day after day, nutritionist and dietitian Jayne Hurley watched her health-conscious colleagues at the Center for Science in the Public Interest eat lunch. One day it occurred to her: Were the kung pao chicken and stir-fried vegetables good for them after all?"People here probably wouldn't dream of going to McDonald's for lunch, but ordering-in Chinese food is an almost everyday occurrence," said Ms. Hurley from the Washington office of CSPI, a nonprofit consumer health advocacy organization.

Investors who have publicly acknowledged interest in becoming partners with Joe De Francis in the ownership of Laurel and Pimlico race courses expressed heightened interest in the project yesterday after the announcement on Monday that De Francis had reached a settlement with his estranged partners, Tom and Bob Manfuso.Toledo, Ohio, harness operator Arnold Stansley said yesterday he feels "confident" that the deals he has been discussing with De Francis -- participation as a minority partner in Laurel/Pimlico and a joint venture in plans for a Virginia track -- "will work out. I have a few loose ends to clear up and some people yet to touch base with.

BURLINGTON, Vt. - A few months ago, an Internet whiz named Matthew Gross was working on a political Web site in Utah when he came across information about Howard Dean, an obscure former governor of Vermont who was making noises about running for president. The 31-year-old Mr. Gross quit his job, got into his car and drove across the country to the Dean national campaign headquarters here. Unannounced, he popped his head into the office of the campaign manager, Joe Trippi, mentioned the Utah Web site, which was familiar to Mr. Trippi, and was immediately hired on the spot.

JACKSON HOLE, Wyo. -- The Federal Reserve's main policy-making committee voted in July to maintain its bias toward raising short-term interest rates, even though some members urged it to drop that bias because economic growth was so weak.As Federal Reserve officials and private economists gathered in this Rocky Mountain resort for an annual conference, the economists were divided over whether the Fed's policy-making committee had maintained the bias when it met Tuesday.The Fed panel meets eight times a year but its deliberations are not disclosed until after the next meeting.

WASHINGTON -- The sluggish U.S. economy ended the second quarter on an upbeat note as manufacturing surged in June, and sales of new single-family homes staged a stronger-than-expected rebound in May, reports showed yesterday.Bonds fell on the news -- pushing interest rates higher -- because it suggests that the Federal Reserve may need to boost borrowing costs later in the year to guard against a rise in inflation if the economy continues to rebound."These numbers are fairly jarring," said Peter Kretzmer, an economist at NationsBank Corp.

MILFORD, N.H. -- "I'm sort of a Democrat, but I'm thinking of voting for McCain," Bernice Staley says, "because he really says what he thinks."Then, pausing as she loads children and groceries into her car, she adds: "But then again, I'm for choice [on abortion rights], so maybe I'll vote for Bradley. I like him, too."Her friend Nancy, an independent who doesn't want her last name used, is similarly conflicted."I like both of them," she says, "but I think Bradley has a better chance. Everybody says Gore is a good man, but he's too close to Clinton for me."

WASHINGTON -- Sen. Fred Thompson may have to call upon every theatrical trick he ever picked up in his movie career as he opens the long-delayed hearings on campaign fund-raising abuses this week.The Tennessee Republican faces a climate of partisan sniping so bitter it nearly derailed the hearings, an expectation that there will be no real surprises and -- perhaps most of all -- a public already inured to politicians' questionable money-grubbing ways.Still, in hearings that begin tomorrow and are scheduled to last through the end of the year, Thompson -- who honed his prosecutorial skills as Republican counsel to the Senate Watergate committee, and his dramatic flair in a score of Hollywood films -- will try to "tell the story" of what happened in the 1996 campaign.