Dow Jones 10946 +300
Nasdaq 2617 +325
S&P 500 1348 +64
Sky was the limit for the tech stocks after investors heard the news that the Fed decided to lower the interest rates by 50 points between meetings…The Nasdaq which had its biggest loss ever last year marked its best ever one-day gain in both percentage and point terms… another record was volume on the Nasdaq market … more than 3.16 billion shares changed hands…
The Nasdaq Composite rallied 324 points(14.2%) to 2,616 while the Nasdaq 100 Index surged 399 points(18.8%) to 2,528….
The Fed reduced the Fed funds rate to 6% from 6.50% and the discount rate by 25 basis points to 5.75%.
In their statement the Fed said, "These actions were taken in light of further weakening of sales and production, and in the context of lower consumer confidence, tight conditions in some segments of financial markets, and high energy prices sapping household and business purchasing power. Moreover, inflation pressures remain contained…”
"We believe the Fed did this to send a clear message that they are committed to maintaining relatively stable and liquid capital markets and stable economic growth," said Merrill Lynch's chief U.S. investment strategist Christine Callies.
Callis also said that historically, within three months after an initial rate cut the S&P 500 has generally traded up around 10%, within six months the index has generally advanced 19% and by 12 months it has generally returned 23.6%….
"The rule goes: Never fight the Fed, and the Fed was up until a couple of weeks ago maintaining a tightening bias. Now they've eased, and eased aggressively," said Todd Clark, head of listed trading at WR Hambrecht. "What the market is seeing is that the Fed is not going to let the economy fall into a recession."
This of course turned most things the other way round…The techs that had nearly got used to posting serious loss almost everyday posted tremendous, double-digit gains, Internet and networking issues being the leaders. Those names that we got fed up with hearing their loss day by day, such as Cisco Systems; Sun Micro; Microsoft; Oracle; Applied Materials; JDS Uniphase, etc. all posted double-digit % gains…
Well the question so far was about the concerns that the economic slow down might turn into a recession which in turn would cause a deeper crash in the stock markets…today it became obvious that investors think that the Fed is not going to let this happen… Will they be able to? I think that’s a good and sensible question to ask…BUT not now..now lets enjoy and make the most of the RALLY…
I am just glad that for a change I am writing a cheerful post about the Nasdaq…have a sweet sleep!!!!
rizgar
(quotations from ftmarketwatch, WSJ, CBS.MarketWatch)
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Nasdaq 2617 +325
S&P 500 1348 +64
Sky was the limit for the tech stocks after investors heard the news that the Fed decided to lower the interest rates by 50 points between meetings…The Nasdaq which had its biggest loss ever last year marked its best ever one-day gain in both percentage and point terms… another record was volume on the Nasdaq market … more than 3.16 billion shares changed hands…
The Nasdaq Composite rallied 324 points(14.2%) to 2,616 while the Nasdaq 100 Index surged 399 points(18.8%) to 2,528….
The Fed reduced the Fed funds rate to 6% from 6.50% and the discount rate by 25 basis points to 5.75%.
In their statement the Fed said, "These actions were taken in light of further weakening of sales and production, and in the context of lower consumer confidence, tight conditions in some segments of financial markets, and high energy prices sapping household and business purchasing power. Moreover, inflation pressures remain contained…”
"We believe the Fed did this to send a clear message that they are committed to maintaining relatively stable and liquid capital markets and stable economic growth," said Merrill Lynch's chief U.S. investment strategist Christine Callies.
Callis also said that historically, within three months after an initial rate cut the S&P 500 has generally traded up around 10%, within six months the index has generally advanced 19% and by 12 months it has generally returned 23.6%….
"The rule goes: Never fight the Fed, and the Fed was up until a couple of weeks ago maintaining a tightening bias. Now they've eased, and eased aggressively," said Todd Clark, head of listed trading at WR Hambrecht. "What the market is seeing is that the Fed is not going to let the economy fall into a recession."
This of course turned most things the other way round…The techs that had nearly got used to posting serious loss almost everyday posted tremendous, double-digit gains, Internet and networking issues being the leaders. Those names that we got fed up with hearing their loss day by day, such as Cisco Systems; Sun Micro; Microsoft; Oracle; Applied Materials; JDS Uniphase, etc. all posted double-digit % gains…
Well the question so far was about the concerns that the economic slow down might turn into a recession which in turn would cause a deeper crash in the stock markets…today it became obvious that investors think that the Fed is not going to let this happen… Will they be able to? I think that’s a good and sensible question to ask…BUT not now..now lets enjoy and make the most of the RALLY…
I am just glad that for a change I am writing a cheerful post about the Nasdaq…have a sweet sleep!!!!
rizgar
(quotations from ftmarketwatch, WSJ, CBS.MarketWatch)
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