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MicroStrategy ( MSTR ) rises on Nasdaq 100 inclusion

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Crypto stocks rally

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Honeywell ( HON ) explores separation of aerospace business

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Indexes: Dow off 0.01%, S&P 500 up 0.4%, Nasdaq up 0.9%

(Updates with morning trade)

By Lisa Pauline Mattackal and Purvi Agarwal

Dec 16 (Reuters) -

The S&P 500 and the Nasdaq rose on Monday, as investors

looked ahead to an anticipated Federal Reserve interest rate cut

later in the week as well as several key data releases for clues

on monetary policy next year.

The Fed's final rate decision of the year is due on

Wednesday, with traders pricing in an over 99% chance of a 25

basis point rate reduction, as per CME's FedWatch.

Most megacap and growth stocks traded higher, with

Google-parent Alphabet up 3.8% and Amazon.com ( AMZN )

rising 1.3%, boosting communication services and

consumer discretionary sectors about 1.5% each.

Both the Nasdaq 100 and the Nasdaq Composite

touched fresh record highs, while the small-cap Russell

2000 jumped 0.8%.

"The Nasdaq 100 has hit a fresh record high, and

small-caps are in demand, as the final year-end chase gets

underway, this is the 'Santa rally' almost right on cue," said

Chris Beauchamp, chief market analyst at online trading platform

IG.

Ahead of the Fed decision, investors awaited Tuesday's

retail sales data and other key releases scheduled throughout

the week.

With a rate cut all but priced in, investors' primary

focus will be on policymakers' outlook for next year as bets

moderate on the pace of rate cuts amid strong economic growth

and persistent inflation.

"The S&P's year-to-date 26.86% gain far exceeds the average

10.05% annual gain since 1995 ... this jampacked week of

important economic figures along with the FOMC meeting could be

the game changer," said Mark Malek, CIO at Siebert Financial.

Stocks have overall had a bumper run in 2024 as gains in

artificial intelligence-related companies, the start of the

Fed's rate cutting cycle and expected pro-business policies from

Donald Trump's incoming administration have lifted equities.

S&P Global's December flash PMI showed manufacturing

activity stood at 48.3, while services activity was at 58.5,

above estimates of 55.7.

At 12:13 p.m. the Dow Jones Industrial Average fell

5.04 points, or 0.01%, to 43,823.02, the S&P 500 gained

24.04 points, or 0.40%, to 6,075.13 and the Nasdaq Composite

gained 181.44 points, or 0.91%, to 20,108.16.

Yields on the benchmark 10-year Treasury

briefly eased from an over three-week high before creeping back

above 4.4%.

Honeywell International ( HON ) gained 3.3% after the

industrial conglomerate said it was exploring a separation of

its aerospace business.

Tesla leapt 5.4% after Wedbush Securities

raised its price target on the stock to a Wall Street high of

$515.

Crypotocurrency stocks rose as bitcoin jumped above

$106,000 after Trump suggested he plans to create a U.S. bitcoin

strategic reserve, and bitcoin buyer MicroStrategy ( MSTR ) was set to

join the Nasdaq 100 index.

MicroStrategy ( MSTR ) jumped 5%, while bitcoin miner MARA

Holdings ( MARA ) gained 8.8%.

Super Micro Computer ( SMCI ), among those set to be

removed from the Nasdaq 100, dropped 6.9%.

Advancing issues outnumbered decliners by a 1.13-to-1

ratio on the NYSE and a 1.34-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and 14 new lows,

while the Nasdaq Composite recorded 85 new highs and 141 new

lows.