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The Federal Reserve's half-point cut in the federal funds rate, announced late Wednesday morning, sent stocks from stalwart GE to struggling Lucent surging.
The Nasdaq Composite rose 8.12 percent, or 156.22 points, to 2079.44. The Dow Jones Industrial Average surged 3.91 percent, or 399.10 points, to 10615.83. The S&P 500 rose 3.89 percent to 1238.16. The Industry Standard 100 outpaced the Nasdaq, up 10.36 percent to 405.22.
Both of the major indexes closed at their highest level since March 9. The Nasdaq, the benchmark for technology shares, dropped blow the key 2000 level on March 12, when network equipment giant Cisco Systems announced layoffs. Interestingly enough, an earnings warning by Cisco on Monday afternoon had little affect on the market despite the fact that Cisco said it was seeing excessive weakness in international markets.
The Dow saw its third-highest point gain ever and the Nasdaq had its fourth-largest percentage gain. The S&P 500 hopped out of official bear territory defined as a 20 percent drop from a recent high. The Nasdaq's record percentage gain was on Jan 3, the day of the Fed's last intermeeting surprise. Nasdaq volume on that day was a record 3 billion. Wednesday’s volume got close at 2.9 billion. Market internals were scalding. On the Nasdaq, advancing volume led decliners by more than 11 to 1. On the NYSE, advancing volume beat declining by almost 4 to 1.
It just didn't make sense for the Fed to wait until May to make a move. Obviously, todays move had a great effect on the markets. To Date this year, the Fed has cut the interest rate a full 2 points.
Stocks up today included the struggling Lucent, AOL/Time Warner which surprised with better than expected earnings, and Intel whom hasn't had the greatest year. Some other stocks like ones pending delisting, had no hope at all, and many others have been pulled from trading pending their delisting like Snowball.
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