NEW YORK, Jan. 14 (UPI) -- U.S. stock indexes maintained their rally at midday Monday on rising hopes for an interest rate cut by the Federal Reserve.

The Dow Jones industrial average was up 100.72 points, 0.8 percent, to 12,707.02 points in early afternoon trading. The Nasdaq composite index was up 0.8 percent, or 19.74 points, to 2,459.68. The Standard & Poor's 500 gained 6.89 points, 0.5 percent, to 1,407.91.

Part of the rally was attributed to IBM's fourth-quarter results that zoomed past analysts' expectations. Big Blue's preliminary results indicated its earnings from continuing operations were up 24 percent and revenue climbed 10 percent.

Traders also interpreted Fed Chairman Ben Bernanke's recent remarks about "substantive" action by central bank policymakers to mean a steep interest-rate cut. The Federal Open Market Committee meets Jan. 29-30.

On the New York Stock Exchange, 1,847 stocks were up and 1,211 were down in early afternoon trading.

The 10-year U.S. Treasury note was up 3/32, yielding 3.783 percent.

The euro exchanged at $1.4874 from $1.4778 late Friday. The dollar traded at 108.10 yen from 108.99 yen.

The U.K. FTSE 100 index closed up 0.2 percent to 6,215.70.

Japanese stock markets were closed Monday for a holiday.

Countrywide buyout has little impact now

CALABASAS, Calif., Jan. 14 (UPI) -- Bank of America's planned purchase of troubled Countrywide Financial (NYSE:CFC) won't impact immediately U.S. consumers with Countrywide loans.

In fact customers of both institutions won't see many changes before 2009, when the companies begin to meld some of their operations, USA Today reported Monday.

Countrywide, which said last week 7 percent of its borrowers were in default, is participating in a national program to refinance or freeze interest rates for some borrowers carrying subprime adjustable rate loans. The Bank of America-Countrywide merger wouldn't immediately affect homeowners who have mortgages from either lender.

Over time, however," it's going to mean less choice" for consumers, Guy Cecalla, publisher of Inside Mortgage Finance, told USA Today. "No one is going to want to hear that. Countrywide was really out there in terms of having a breadth of mortgage products."

Last year, Countrywide, based in Calabasas, Calif., laid off 20 percent of its work force as the real estate market tanked in the worst downturn since World War II.

GM investing in ethanol maker

DETROIT, Jan. 14 (UPI) -- Detroit automaker General Motors (NYSE:BGM) says it is investing in a company that claims it can mass-produce ethanol for $1 a gallon or less by 2010.

While GM won't disclose its investment, Bill Roe, chief executive of 18-month-old ethanol maker Coskata, said it's enough to make Coskata a "speed to market play," USA Today reported Monday. The tie-in was announced during previews of the North American International Auto show.

Coskata's process uses lab-developed bacteria and an existing gasification technology to make 99.7 percent pure ethanol and water. Current ethanol production uses corn.

Coskata's process can use garbage, old tires and other waste, but Roe said wood waste probably would be the first used because it's easy to handle, inexpensive and available.

However E85 -- auto fuel that is an 85 percent ethanol blend -- has raised questions about health and financial costs. A Stanford University study said E85-fueled vehicles increase ozone levels and an upward shift in the number of vehicles that can use E85 could boost U.S. respiratory deaths.

GM disputes the report, saying it joined environmental, pro-ethanol and health organizations to seek a working group to reach consensus on ethanol's health effects.

Zagat publications available for sale

NEW YORK, Jan. 14 (UPI) -- Zagat, the international restaurant guide company that started as a two-page typed list of New York restaurant reviews, is for sale.

Goldman Sachs has been hired to find a buyer for the company that sold 5.5 million guides last year in more than 100 countries and sports a Web site with 1.5 million registered users, The New York Times reported Monday.

The sale should attract broad interest but a price tag is uncertain, observers said. People briefed on the company's finances suggest it could be valued at more than $200 million, the Times said.

Zagat's slim guides expanded from restaurant critiques to reviews of hotels, night life and golf courses and more. Zagat's guide to restaurants in Paris outsells France's vaunted Michelin series.